Two former Northwestern Mutual advisors, two very different paths. Andy Schwartz and Kevin Spahn share what it takes to build, grow, merge, and create lasting enterprise value.

What separates a successful advisory practice from an enterprise with the ability to grow well beyond its founders?

Andy Schwartz and Kevin Spahn offer two different perspectives on that question. Both spent decades at Northwestern Mutual, but their paths eventually diverged. Andy left to help build what is now OnePoint BFG Wealth Partners, an $18B+ firm expected to surpass $20B by year-end. Kevin built one of Northwestern Mutual’s top practices before deciding to merge his business into OnePoint and become an equity partner.

Louis talks with Andy and Kevin about the decisions behind both journeys: creating a true firm rather than an aggregation of practices, transitioning advisors from 1099 to W-2, using outside capital without relinquishing control, rethinking succession, and determining when equity in a larger enterprise can offer greater opportunity than continuing to build alone.

Underlying it all is a factor that’s much harder to quantify: trust.

Andy Schwartz and Kevin Spahn have known each other for roughly 30 years. They met while both were building careers at Northwestern Mutual, where Andy became an important mentor to Kevin as Kevin transitioned from practicing law and estate planning into wealth management.

After roughly 30 years at Northwestern Mutual, Andy and his partners left in 2015 with approximately $3B in assets to launch independently. What began as Bleakley Financial eventually became OnePoint BFG Wealth Partners, an $18B+ enterprise that Andy expects will surpass $20B by the end of 2026.

That kind of growth required more than attracting assets. Andy describes the evolution from a predominantly 1099 structure into a firm where more than 85% of advisors and AUM are now W-2. The shift created a more cohesive enterprise, gave advisors access to equity, and ultimately positioned OnePoint to bring in minority capital from Joe Duran’s Rise Growth Partners.

Andy makes an important distinction about that relationship: OnePoint is “private equity invested,” not “private equity owned.” The structure gave the firm capital and expertise while allowing its partners to retain control.

Kevin faced a different decision. After more than 30 years at Northwestern Mutual, his practice had grown to 18 people and approximately $2B in assets. He was happy at the firm, but his clients had evolved, his business had become increasingly complex, and the internal succession plan he once envisioned carried risks he could no longer ignore.

He could have built an independent firm himself. Instead, he chose to merge with OnePoint.

The decision wasn’t driven by the largest possible check. Kevin saw the opportunity to become an equity partner in a larger enterprise, give his team and clients a more durable future, and leverage infrastructure he didn’t want to recreate himself.

For both men, the story ultimately comes back to the same principle: The right economics matter, but sustainable partnerships require trust, shared philosophy, and the belief that everyone involved can create more value together than separately.

> Download a transcript of this episode…

How did Andy and Kevin’s 30-year relationship ultimately lead to a transaction? (04:11)
Kevin explains how Andy helped him transition from attorney and estate planner into wealth management, beginning a professional relationship that would eventually make their partnership possible decades later.

Why did Andy leave Northwestern Mutual after roughly 30 years? (08:45)
Andy describes wanting greater flexibility, a multi-custodial platform, and more optionality for clients and the business—a decision that ultimately led to the creation of OnePoint BFG.

Why did Kevin decide his longtime Northwestern Mutual practice needed something different? (15:49)
Kevin explains how his clients, service needs, and business evolved over time, while concerns about his original internal succession plan led him to consider a different path.

What has driven OnePoint’s growth from approximately $3B to $18B+? (21:41)
Andy outlines the firm’s emphasis on client experience, advisor experience, organic growth, and carefully selected inorganic growth—and why helping advisors grow is fundamental to the model.

Why does Andy say OnePoint is a firm rather than an aggregator? (23:54)
The distinction comes down to alignment, shared responsibility, centralized resources, equity, and a partnership structure in which advisors are accountable to one another.

How did OnePoint convert a predominantly 1099 advisor base into a W-2 enterprise? (29:26)
Andy explains why capital and equity became necessary to build the next stage of the business and why trust was essential to bringing advisors into a more integrated structure.

Why did OnePoint choose minority private equity investment? (33:13)
Andy shares why Rise Growth Partners offered something previous potential buyers had not: a structure designed to benefit the broader advisor partnership while preserving control.

Why did Kevin merge with OnePoint rather than shop his practice broadly? (36:43)
For Kevin, maximizing price wasn’t the objective. His decision centered on trust in Andy, confidence in OnePoint’s infrastructure, and creating a strong future for clients and employees.

Why did Kevin choose equity in the larger firm instead of simply cashing out? (40:57)
Kevin explains why he believes participating in the future growth of a larger enterprise offers a compelling alternative to relying solely on the future growth of his own practice.

How should advisors evaluate the “golden handcuffs” that can make leaving difficult? (46:42)
Andy argues that the analysis needs to compare what an advisor gives up with the potential growth, economics, equity, and leverage available on the other side.

How much conformity does a true enterprise require? (49:06)
Andy explains why OnePoint sits somewhere between complete advisor autonomy and complete centralization, seeking enough consistency to create enterprise value without eliminating entrepreneurial flexibility.

What would Andy and Kevin tell their younger selves? (52:06)
Kevin emphasizes surrounding yourself with the best people possible, while Andy reflects on having the courage to make a difficult change after a successful 30-year run.

https://youtu.be/jkIoynpZj6Y

“The biggest mistake advisors make is they buy their own bullshit.”
— Andy Schwartz

“We’re not an aggregator, we’re a firm.”
— Andy Schwartz

“The biggest issue is trust. Either they trust you or they don’t.”
— Andy Schwartz

“I wasn’t looking to sell my business. I was looking to merge it.”
— Kevin Spahn

“You have to trust them. You have to see that they provide value. And you need to be on the same page philosophically.”
— Kevin Spahn

“Associate yourselves with the best people you can… It accelerates your trajectory in ways that you can’t do on your own.”
— Kevin Spahn

After approximately 30 years at Northwestern Mutual, Andy and his partners wanted greater flexibility, the ability to operate on a multi-custodial basis, and more optionality for clients and the business. They left in 2015 with approximately $3B in assets and launched the independent firm that ultimately became OnePoint BFG Wealth Partners.

At the time of the interview, Andy says OnePoint manages more than $18B and expects to exceed $20B by the end of 2026, even without additional organic growth.

Andy points to three priorities: client experience, advisor experience, and growth. The firm targets approximately 10% organic growth while also expanding through acquisitions and partnerships with advisors it believes fit the OnePoint model.

The firm wanted to evolve from a platform supporting individual practices into a more integrated enterprise. That required creating firm-level economics and equity that could be used to attract, retain, and align advisors. Today, Andy says more than 85% of OnePoint’s advisors and AUM are W-2.

Rise Growth Partners holds a minority, non-controlling interest in OnePoint. The investment provides capital, expertise, and strategic support while the operating partners retain majority ownership and control of the business.

Kevin says he remained happy at Northwestern Mutual, but his practice and clients had evolved. His work had shifted increasingly toward investments and complex high-net-worth planning, while he also began identifying risks in his intended internal succession plan.

OnePoint already had the infrastructure, people, and capabilities Kevin would have needed to build himself. The merger allowed him to focus on clients while becoming an equity partner in a larger enterprise he believed could grow faster than his standalone practice.

Kevin says his decision was driven primarily by trust. He had known Andy and other OnePoint partners for decades and believed the firm offered the right future for his clients and employees. His choice ultimately came down to staying at Northwestern Mutual or joining OnePoint.

Their discussion points to three fundamental considerations: trust, demonstrable value, and philosophical alignment. Economics matter, but both argue that a sustainable partnership depends on confidence in the people and business on the other side of the transaction.

After approximately 30 years at Northwestern Mutual, Andy and his partners wanted greater flexibility, the ability to operate on a multi-custodial basis, and more optionality for clients and the business. They left in 2015 with approximately $3B in assets and launched the independent firm that ultimately became OnePoint BFG Wealth Partners.

At the time of the interview, Andy says OnePoint manages more than $18B and expects to exceed $20B by the end of 2026, even without additional organic growth.

Andy points to three priorities: client experience, advisor experience, and growth. The firm targets approximately 10% organic growth while also expanding through acquisitions and partnerships with advisors it believes fit the OnePoint model.

The firm wanted to evolve from a platform supporting individual practices into a more integrated enterprise. That required creating firm-level economics and equity that could be used to attract, retain, and align advisors. Today, Andy says more than 85% of OnePoint’s advisors and AUM are W-2.

Rise Growth Partners holds a minority, non-controlling interest in OnePoint. The investment provides capital, expertise, and strategic support while the operating partners retain majority ownership and control of the business.

Kevin says he remained happy at Northwestern Mutual, but his practice and clients had evolved. His work had shifted increasingly toward investments and complex high-net-worth planning, while he also began identifying risks in his intended internal succession plan.

OnePoint already had the infrastructure, people, and capabilities Kevin would have needed to build himself. The merger allowed him to focus on clients while becoming an equity partner in a larger enterprise he believed could grow faster than his standalone practice.

Kevin says his decision was driven primarily by trust. He had known Andy and other OnePoint partners for decades and believed the firm offered the right future for his clients and employees. His choice ultimately came down to staying at Northwestern Mutual or joining OnePoint.

Their discussion points to three fundamental considerations: trust, demonstrable value, and philosophical alignment. Economics matter, but both argue that a sustainable partnership depends on confidence in the people and business on the other side of the transaction.

Rise and Reinvent: Joe Duran on Building and Rebuilding World-Class Firms

From Insurance Sales to $8B RIA: A Northwestern Mutual Breakaway Story

The 4th Annual Advisor Transition Report

Andy Schwartz
Co-Founder, Managing Partner, and Chief Executive Officer

Andy Schwartz is the Co-Founder, Managing Partner, and Chief Executive Officer of OnePoint BFG Wealth Partners, where he also serves as a Wealth Management Advisor. A CERTIFIED FINANCIAL PLANNER® with more than 40 years of experience, Andy has built his career around helping clients make confident, well-informed financial decisions at every stage of life. He works extensively with physicians and business owners on wealth building, retirement planning, and tax-efficient asset transfer across generations.

A 2026 finalist for Wealth Management Awards CEO of the Year (under $25B AUM), Andy brings the same discipline to leading the firm that he brings to client relationships: comprehensive planning, long-term thinking, and an unwavering commitment to independence and integrity.

Beyond his client work, Andy is deeply invested in the advisory profession itself. He co-hosts The Advisor’s Compass podcast, offering candid, practical guidance on the business and responsibilities of being an advisor. His mentorship philosophy is straightforward: pass the ladder back down.

His industry recognition spans more than a decade, including Top 1,200 Advisor by Barron’s (2018–2024), Top 250 Wealth Advisor and Best-In-State Wealth Advisor by Forbes (2018–2024), Top 400 Financial Advisor by the Financial Times (2018–2020), and Top 100 Independent Advisor (2020–2023). He was named Executive of the Year by NJBIZ in 2019 and was a finalist for the Invest in Others Lifetime Achievement Award for more than 20 years of service with NJ SEEDS.

Andy holds a B.S. in Finance and Marketing from Rowan University and is actively involved with Nourish NJ, the Navy SEAL Foundation, the Jewish Federation of Greater MetroWest NJ, and JSDD. Outside the office, he enjoys golf, reading, and time with his family at the beach.

Kevin Spahn
Partner and Wealth Advisor

Kevin Spahn is a Partner and Wealth Advisor at OnePoint BFG Wealth Partners, bringing more than three decades of experience in comprehensive financial planning to his clients and the firm.

Kevin’s path to wealth management is rooted in the law. After earning degrees from the University of Notre Dame and the University of Wisconsin, he began his career as a practicing attorney before making a deliberate pivot toward financial planning in 1993. He joined Northwestern Mutual, then founded Spahn Financial, building a practice centered on thoughtful, holistic planning for families and business owners. That practice joined OnePoint BFG Wealth Partners in 2025.

His approach has remained consistent throughout: help clients build and protect wealth not just for themselves, but for the generations that follow. Kevin works with clients on comprehensive financial plans that account for the full picture, understanding that the impact of good planning extends well beyond an individual portfolio to families, businesses, employees, and the broader community.

Kevin is based in the greater Chicago area.

NOTE: The views and opinions expressed by the guests on this podcast are their own and do not necessarily reflect the views and opinions of Diamond Consultants. Neither Diamond Consultants nor the guests on this podcast are compensated in any way for their participation.

Build, Grow & Transact: Making the Leap from Northwestern Mutual to a $20B Enterprise

A conversation between Louis Diamond, Andy Schwartz, CEO of OnePoint BFG Wealth Partners and Kevin Spahn, Founder of Spahn Financial (now OnePoint BFG).

Louis Diamond:

Welcome to the latest episode of our podcast series for financial advisors. Today’s episode is Build, Grow & Transact: Making the Leap from Northwestern Mutual to a $20B Enterprise. It’s a conversation with Andy Schwartz, CEO of OnePoint BFG Wealth Partners, and Kevin Spahn, founder of Spahn Financial, now OnePoint BFG. I’m Louis Diamond, and this is The Diamond Podcast for Financial Advisors.

Mindy Diamond:

At Diamond Consultants, we help elite advisors identify the right environment for their businesses to thrive, whether that’s at a wirehouse, boutique, or independent firm. With nearly three decades of experience, we’ve guided thousands of advisors and represented more than a quarter of a trillion dollars in assets transitioned. Each year, one in four advisors managing a billion dollars or more who change firms are our clients. Our process is education-driven and based on building relationships, starting as your strategic partner well before you’re even thinking of a move. To schedule a confidential conversation, call us at 908-879-1002.

Wondering why advisors change firms and where they’re headed? Are transition deals going up or down? Those very questions, and more, inspired us to create our annual Advisor Transition Report. It’s the award-winning data-driven resource designed for advisors that connects the dots between the motivations around movement and the firm’s appetite for top talent. Arm yourself with the knowledge you need to make smart decisions. Download your copy at diamond-consultants.com/transitionreport.

Louis Diamond:

There’s a big difference between building a successful practice and building an enterprise. I think Andy Schwartz and Kevin Spahn offer a unique perspective on that distinction from two very different sides. Both spent decades in the Northwestern Mutual system. Andy ultimately left to build what became OnePoint BFG Wealth Partners, taking the firm from roughly three billion to nearly 20 billion and transforming just about every aspect of the business along the way. Kevin built one of Northwestern Mutual’s top practices before reaching a different inflection point, deciding what he wanted the next phase of his career and business to look like. Rather than go independent on his own or simply monetize what he had built, he chose to become part of Andy’s growing enterprise.

That makes their story particularly relevant for our Build, Grow, and Transact series. Andy can speak to what it takes to build a firm capable of becoming an acquirer, from converting advisors from 1099s to W-2s, to creating equity opportunities, to bringing in outside capital while remaining very deliberate about being private equity-invested rather than private equity-owned. And Kevin brings the seller’s perspective, how you evaluate the economics, the trade-offs, and ultimately the people you’re trusting with the business you spent more than 30 years building. Because whether you’re building, buying, or considering a transaction of any kind, the numbers are only part of the equation. As you hear from both Andy and Kevin, trust may be the most important currency of all. So let’s get to it.

Andy and Kevin, thank you so much for both joining us today.

Andy Schwartz:

Great to see you again, Lewis. Thank you for having us.

Louis Diamond:

I’ve been excited about this interview for a bunch of reasons. One, our Build, Grow, Transact series has become a real staple of our show and we got lots to talk about there. But also, the friendship, the relationship that you two have had for over 30 years really stood out to me. So before we get into the nuts and bolts, talk about your relationship. How’d you guys meet, and how did your career stay so intertwined together when you’re in different geographies and at different firms, and have each been very successful in your own rights?

Andy Schwartz:

Sure. Kevin, do you want to start with that?

Kevin Spahn:

Sure. I started in this career in 1994 and met Andy sometime after that. He was a more advanced financial planner. I was an attorney, and then I transitioned into this business. So when I first joined Northwestern Mutual, which is my first broker dealer, I didn’t really have a background in investments. At the time, a lot of Northwestern Mutual reps were learning the investment business because they maybe originally started with Northwestern Mutual focusing more on insurance planning.

My background was more estate planning. At the time, if you think early ’90s, if you did estate planning, insurance often went hand in hand with that. The estate exemption in early 1990s was about $600,000. So if you pass more than $600,000 to your children, there was a 55% tax. One way around it was to put insurance in an irrevocable trust, help cover the tax that way. So it really was a popular common strategy back then, and it’s really what got me into the business.

But I quickly realized that I didn’t want my future to be insurance and estate planning. And there was a conflict if you acted as someone’s attorney and sold insurance. So I had to pick one way or the other. I decided long-term it would be better for me to move into the wealth management space. But with that little background in that, I had a lot of work to do. So took a lot of tests, became a certified financial planner.

But the person that helped me the most along the way was Andy. We became friends, we sat on committees together. That’s really how we met, I would say. So we worked side by side interacting with our home office and representing the field, bringing issues to the home office that we thought were beneficial to the field. As we did that together, I got to know Andy. And then separately, I learned from him how he built his business and how they would review clients’ portfolios and come up with solutions. So I really credit Andy with helping me more than anyone else to transition from attorney, financial planner doing more estate planning insurance to wealth management.

Louis Diamond:

Very cool. Hey, I would say, maybe I’m a little biased, that, Kevin, you picked the right path in hanging up the law shingle and coming into wealth management.

Kevin Spahn:

I tell a lot of people I’m a reformed attorney.

Andy Schwartz:

Great.

Louis Diamond:

Exactly. My dad would say the exact same thing. Very common at dinner tables in the Diamond households.

Andy Schwartz:

I was always grateful that I wasn’t smart enough to be an attorney.

Louis Diamond:

There we go.

Andy Schwartz:

That’s where my gratitude lies. Yeah.

Louis Diamond:

There we go.

Andy Schwartz:

Some would say he’s too smart.

Louis Diamond:

There we go. Andy, question for you. I mean, anyone who is at or was at Northwestern Mutual, I mean, you’re like Elvis to them. It’s absolutely crazy the amount of fanfare and brand recognition that you and your brother Scott have. But for those who maybe missed your first podcast appearance with us a number of years ago, or aren’t or weren’t within the Northwestern Mutual system, or haven’t been familiar with Bleakley and now OnePoint BFG, just give us the cliff notes, the origin story, how you got into the business, and how’d you get from here to there?

Andy Schwartz:

Yeah. So the origin is probably pretty common, probably by accident. Going into my senior year in college, I was working in a restaurant, had a falling out with my boss. I happened to be dating a woman who was living with a general agent with Fidelity Union Life. No one will have ever heard of Fidelity Union Life, but their secret sauce was they sold life insurance to college seniors on a note. So if you can get a $10 money order, because where I went to school, nobody had a checking account, then you could basically get a note signed and they would buy insurance. And then when they graduate, hopefully they’d pay for it. I started selling life insurance my senior year in college. And then my twin brother Scott, who is my partner, and has been for over 40 years, he took an interview with what was the nucleus of our present firm actually.

I just went up to Northern New Jersey in May of 1984 because I was an expert. I had been selling life insurance to college kids for six months, so I knew everything you had to know. We met with these guys, and we both ended up joining them. So that was a Northwestern Mutual district agency, and that was 1984. We got licensed right away. I got my CFP in ’86. We always knew that it was going to be about planning. So I think we had the right idea. We were a little ahead of the curve because there weren’t a lot of CFPs in ’86. We got securities license immediately. So before Northwestern had securities license, we got securities license with US Life actually.

And then it was really a volume business, a client-building business. We always tried to act as a firm and share resources. We were small, but like a lot of people, we started out selling A shares and B shares and C shares, doing financial planning, selling insurance, and then we made a lot of really good hires along the way. And then after 30 years at Northwestern Mutual, which was a great experience for me, and I have nothing but respect for the institution and certainly the advisors that are there, Kevin certainly was one of them, and I know he feels the same way, but we just wanted to have a little more flexibility. We went independent about 11, almost 12 years ago. We wanted to be able to be multi-custodial. We wanted to have a little bit more optionality for our clients and for ourselves.

We left Northwestern at three billion or so in assets, and that was in 2015. It’s in March of 2024, I get introduced to this guy with a crazy accent named Joe Duran. Funny, probably the only person in the industry that had no idea who Joe Duran was me. I’d never heard of Joe Duran. I don’t pay attention. I worry about our firm. I don’t worry about what’s going on outside. So I get introduced to Joe by a mutual friend, and we had an interesting conversation, and it took us probably about four or five months to figure out what we wanted to do. And then in August of ’24, myself and my three partners, we rolled in. And then in ’85, the rest of the firm rolled in. And we can talk a little bit more about that.

Today we’re 18-plus billion, growing quite a bit. We’ve been very lucky that we’ve made some very good decisions along the way. We’ve made some bad ones too. But most of the decisions had to do with the people that we hired, the people that we brought on to help us, because I think it’s really important. I always say that the biggest mistake advisors make is they buy their own bullshit, and I try not to, and I realize that I’m smart enough, but I’m certainly not the smartest guy. I’m rarely the smartest guy in the room. So what we try to do is hire lots and lots of really smart people. And we’ve done that. They’ve been loyal to us, we’ve been loyal to them. Yeah, so we’re blessed to have a really great team and lots of good partners. Yeah.

Louis Diamond:

Yeah, we’ll definitely get into more of the nuts and bolts of the decision to take on capital, partner with Joe Duran’s Rise, but that’s an amazing background. Andy, I have to give you credit because your style, and I think I’m sure there’s business benefits, but it comes from a good place, I’m sure. But the coaching and consulting and just assistance that I’ve heard you provide to so many past and current Northwestern Mutual advisors through sports camps is absolutely incredible. It’s very near and dear to my heart because we always try to lead with education and helping people. So I just wanted to call that out, that your reputation for just providing amazing guidance and coaching to advisors is unparalleled.

Andy Schwartz:

And it’s been the best part of our journey. We’ve been able to help so many people. We get way too much credit by the way. So everybody gives us way too much credit. But the way I look at it is, I’ve been able to leverage my life because I’ve been able to build a great life for myself and my family, but we’ve been able to leverage that, and that’s where the real gift is. So yeah, it’s been a joyful journey for us.

Louis Diamond:

Amazing. Kevin, question for you. You walked through your little bit unorthodox background to get into Northwestern. Can you talk about where your personal practice is today? And then I want to ask you about the decision to leave Northwestern and sell and team up with Andy and team.

Kevin Spahn:

Well, I have to go back to the beginning. What was attractive to me about this business is I went from a career which was confrontational adversarial. I was a trial attorney for six years, and every day I would fight with people over things I didn’t necessarily have a personal interest in and I didn’t really believe in always. But the adversarial confrontational nature wasn’t really my personality, and I would take it too personally. So sometimes I’d go home in a bad mood because I was fighting with somebody taking a deposition.

At night, after so many years as a trial attorney, I started going to people’s houses and doing wills and trusts. And that’s where the dynamic of working with a client or a potential client, feeling that you helped them and walking out of the meeting where they would appreciate what you did for them, and you build a relationship and actually all of a sudden have a friend, that dynamic was attractive to me. That’s really what got me to transition into the business.

So I think it was really helpful to me at the beginning of this career. As Andy said, we all grew our businesses one client at a time. There’s a lot of doors closed, phones hung up on. There’s many people that don’t want to talk to you. There’s many people that don’t call you back. There’s many people that you think you’re getting somewhere with and you don’t. And that’s difficult for people because people often, young reps take that as personal rejection.

I had the benefit of comparing what I was dealing with as a young financial planner to what I had dealt with as an attorney in litigation. I think it just was perspective that I knew I didn’t want to do that anymore. So the negatives to this business didn’t seem that bad to me. I loved the independence. I loved all the relationships that I was building. And that part of it is to this day my favorite part of the business.

When you ask about the present, what basically happens is you start out taking anybody and everybody as a potential client or as someone that you would be willing to work with. And then over time you work with more successful people. So where I’m at today is working with pretty successful people, but they’re all the same, meaning we like working with nice people. If people are nice, we work with them. I feel we can help anybody. Over the years, one client at a time.

The thing that I probably, if I could go back, would change is I think Andy and I are both good at meeting people and building trust and providing value, so that’s why they work with us. So I think that’s just something we’ve both been able to do. He’s much better than I am at building an organization. So I built an organization basically hiring people, that whenever we got too busy, I hired another person. Drawback in terms of that is, anybody that I interview I think is great, and I think they’d be great to join the organization. I like them all. In spite of that, I’ve also brought in many good people that I love.

At this point, my firm has 18 people. We’re a little subset of Andy’s larger firm. I think one of the most attractive things to me about joining Andy’s firm is what Andy mentioned before: the people. As opposed to me having to build this all out myself, going independent, Andy already did that. And he has the infrastructure that would allow me to just merge right into that and not have to go through the pain of figuring all that out, which I don’t even think I’m capable of, to be honest with you.

Louis Diamond:

You’re probably selling yourself short because the way I understood it, you had one of the top practices within the entire Northwestern Mutual systems, and it’s a firm filled with very successful advisors.

For you, Kevin, what was the driving force to leaving NM after all these years? What was bothering you or frustrating you that indicated to you that it was time to do something different?

Kevin Spahn:

To be honest with you, I was pretty happy at Northwestern Mutual. I love the company and the people. I still have many good friends there that I truly miss. The big thing for me, I don’t know if it was any one thing, to be honest with you, is Andy said there’s optionality, especially on the investment side. I think one of the things that happened to me is, when I first started, I was 31 years old, and most of the potential clients that I would meet and work with, they weren’t what I would call today great investment clients. They didn’t have a lot of money. They had great futures. They might’ve been earning significant income or on the way to earning significant income. So what did they need at that point in their life? They needed planning. They needed protection. They didn’t really need investment management because most of their investments were going into their 401(k).

But a lot of those clients that we would take on, and I think that’s the big advantage of Northwestern Mutual, you take on clients that a lot of the investor firms don’t want because they don’t have large investment portfolios. But at some point down the road, all of a sudden you wake up and they do have large investment portfolios. So you bring them in as clients that might buy life insurance from you or disability insurance or something like that. And then you help them, and you give them advice, and you build a relationship with them. Down the road, they make more and more money. They leave jobs, they roll 401(k)s, they have the ability to invest money, stock options, things like that. Next thing you’re doing more comprehensive planning that incorporates investments.

As that progresses even further, you work with larger and larger clients, much more significant net worth, more complexity, bigger tax issues. Some of the strategies and opportunities that we now have at this independent RIA are very attractive for these high-net-worth clients. Along the same lines, less of what I do at this point in my career is insurance, mostly because a lot of the people that I meet are older, they already bought insurance, they’re looking more for investment advice as opposed to insurance. So one of the things that most attracted me to Northwest Mutual was their strong insurance products, which helped me for many years. As time went on, I was doing less of that.

Louis Diamond:

Makes complete sense. So it was a changing of what clients wanted and just the circumstances of your clients where you said, “What got me here when I was 31 was insurance planning, and that’s what my clients needed. But as my practice has evolved, I’ve aged, my clients are older, have more money, the focus shifted from insurance to investments.” And then the distinction was, am I at the best place to run investments in addition to insurance planning, et cetera? It’s a very interesting dynamic. Just the shift in basically your legacy clients was what drove you to consider change.

Kevin Spahn:

That was a big factor. I think the second big factor was I had my own firm with 18 people. My succession plan was that at some point I would shift ownership of the firm to people that worked with me. So as they owned more of the firm, they would have revenue that was currently at the time being paid to me. In my mind, as it shifted to them, they would buy me out using revenue from the clients that we already had. And I realized that there were some issues with that. In our business, as you get older, in your client’s age, they start taking money out of their portfolios. So everyone understands that in our business, the younger average age client you have makes your book more valuable.

I was the biggest driver of new business at my firm, and I started to see that there were some problems with my succession plan. They included, if something happened to me during this succession, that would be a real problem for the people that were buying my business from me if I went that way. If something happened to some of my key people, that would’ve been a problem as well. So it was really attractive to me to… I wasn’t looking to sell my business, I was looking to merge it. So I merged it with Andy’s business.

I believe that Andy and what he’s put together and the actual idea of having partners. So I never really had partners, but now I do. Having partners that we’re all on the same page, we all have similar backgrounds, we all bring something different to the table, and we can learn and benefit from working with each other. But also, owning a little piece of a much larger firm was, number one, it put me in a better position in terms of the potential risk of something happening to me or one of my key people. But secondly, I just think it’s more likely to grow at a greater pace than my firm would’ve as I aged from my 60s to my 70s.

Louis Diamond:

Very interesting. It’s a great realization. I think it’s one that probably every firm owner grapples with at some point, is the romanticism or the ease, some would say, of an internal succession plan. Rewarding those who have helped you build the firm is something I think everyone is interested in. But once that’s put into practice, whether it’s because of capital or sky-high valuations or right people on the bus or risk, et cetera, nowadays oftentimes leads to a firm owner looking at a transaction, whether it’s a merger, a sale, a private equity, capital infusion as a means to solve for succession. So it’s a very interesting way you framed it.

Andy, I want to turn it over to you for a little bit. So you mentioned when you launched Bleakley Financial, which was the old name of your firm, out of Northwestern, you’re about three billion. I think I read that you’re about 10 billion or so when Joe Duran and Rise invested you in 2024. You just said you’re at 18 billion now in the middle of 2026. That is absolutely incredible and amazing.

Andy Schwartz:

We’ll be well over 20 by the end of the year without any additional organic growth.

Louis Diamond:

That’s absolutely incredible.

Andy Schwartz:

We’ve got a lot going on right now.

Louis Diamond:

What’s actually driven that? What’s been the playbook?

Andy Schwartz:

The three areas that are most important for us, and we had our town hall this morning, and we always talk about the things we focus on as a group, the first and most important is the client experience. I always say to people, if you are their advisor, then that means someone else isn’t. These people, they all deserve to be really well taken care of. They deserve the best service, they deserve the best advice. So that’s something we take really personally. So client experience first.

Then we also understand that we don’t just work for clients, we work for our advisors. So I have two jobs. I have, I don’t know, 500 clients I service with my team, and I work for Kevin and 36 other partners and all of our employees. Because again, I recognize that the decision Kevin made… We’re in the middle of a transition out with another advisor, and we pretty much talk to her every day, and I know how hard this is. A transition is so difficult. When you come from a good place, because any of the Northwestern advisor who joins, they’re coming from a good place, it’s not like they have to go anywhere, it’s difficult. So we have the massive responsibility that three or four or five or 10 years from now, that there better be hugs around that this was the best decision ever made or otherwise. That’s the kind of thing that keeps me up at night.

So we’ve got to take care of our client experience, we’ve got to take care of our advisor experience. And then obviously, we’ve got to grow the firm so the firm grows organically. So part of this whole idea of serving our advisors is we have to help our advisors grow. I talk to a lot of people on the acquisition side, and if I’m talking to an advisor, it doesn’t matter how big they are, we kind of think of it as a OnePoint way. There’s flexibility in the OnePoint way. But if I can’t help them grow, I don’t want them, because I say it all the time, I’m not the mafia. I’m not here to get a taste.

Louis, if you weren’t interested in joining us, if I thought that we could help you grow by doing that, then I want you bad. If I don’t think I can help you grow because we’re so different, or because you’re not going to adapt what we do, or there’s no leverage in it, or you’re already better than we are, I don’t want it. So for us, organic growth, number one, and I think you know the industries well enough, that’s got to be the key. We shoot for 10% organic growth. We’re at a little over 5% so far halfway through the year. So assuming we have the similar second half of the year, we’ll hit our 10. Last year we’re at 7.5%.

The second is the inorganic growth. If you truly build a platform, if you truly build a firm that advisors know that they’ll be supported, that they’ll be loved, and you’ll help them grow their businesses, it does make it easier for us. We’re not the highest bidder typically. We can’t. We respect our client’s capital, we respect their equity, so therefore we’re not going to go out there. We’re not an aggregator, we’re a firm. But I think that if we can get that message across, and I think we have, then advisors join us. So that’s been a big part of the growth. And then the market’s helped. Obviously, over the last two years, the market’s been helpful. So that’s how we’ve gone from 10 to 18 and on our way to 22 by year-end.

Louis Diamond:

This is absolutely incredible. Any advisor or firm owner would say organic growth is important, but just saying it’s important doesn’t mean it’s going to happen. So what are the ways in which you help your advisors or your own practice grow organically? What is it that OnePoint is doing for your advisors?

Andy Schwartz:

Starting with bringing on growth-oriented advisors. I mean, look, Kevin Spahn and I come from the same place. We learned how to sell. The great thing about coming out of whether they’re broker dealers or out of the different insurance BDs is, these are people that know how to sell. These are people that don’t think that selling is a bad word. A lot of times you go to the wirehouses and they’re not necessarily sales guys. They’re really smart. They think that they’re investment mavens and investment geniuses. I’m not interested in investment geniuses. I’m interested in people that want to take care of their clients, provide everything they can, clients first, do the proper planning, be good advisors, but they’re growth-oriented.

So as long as we’re talking with the right advisors. Again, if I’m talking to advisor and they might have a big practice, if they’re not growers, we’re not interested. There’s a sense of responsibility for all the partners because we are a true partnership. It’s not an aggregation. This is a firm. I’m responsible for Kevin. Kevin’s responsible to me. All of our partners are responsible to each other, because if we’re going to do a 10% organic growth target, and if some partner is negative 3%, we don’t put them through the spanking machine, but everybody is very aware of where everybody is and nobody wants to let their partners down.

I think either you’re a growth-oriented advisor or you’re a zoo-fed bear. There’s another expression that I got from another Rise Growth Partner or Rise Growth firm. We all kind of communicate and talk to each other. And I was talking about zoo-fed bears, and he said, we call them house cats that think they fight. So they’re house cats, but they have no claws. But I think if you’re careful about who you bring on as partners, and if they are workers, growers, they understand that their job in life is to serve the people. We talk about referrals, we do lots of training to help on referrals. We work on organic growth strategies from the firm, but a lot of it comes from the advisors themselves.

Louis Diamond:

Makes sense. So it sounds like, to boil it down, it’s being really selective and having a really clear sense of who’s the right fit for your firm. Not that there’s not amazing advisors out there, but just because you’re an amazing advisor, doesn’t mean you’re the right fit to join OnePoint.

Andy Schwartz:

I think the one big distinction and difference is other than the fact that we are minority-owned with private equity. So we own our business. I mean, I’m the CEO of the firm. I also have the biggest book in the firm. At least for right now, I mean, Kevin was transitioning, so I’m sure next year he’ll be the leading advisor. But I lead the firm, because as far as I’m concerned, you have to lead by example. We are completely aligned. I know exactly what Kevin does every day because I do the same thing. I’m not some attorney or accountant or private equity boss that’s saying, “Oh, I’ve got an idea for growth. We’ll just raise our fees by 5%.” Brilliant. Yeah, we are completely aligned, all of us. I think that makes us a little bit unique, and it really helps us, I think, in our growth trajectory.

Louis Diamond:

I would agree. The challenge that a lot of advisors-turned-firm-owners or turned-enterprise-builders have is the tug of war between the client work, which either is their ultimate passion and driving force, or it’s something they’re really good at minimum, versus being the owner, the operator, et cetera. I resonate very much, Andy, with the way you handle it. I do the same thing running a company, but also working with advisors. To me, I need to do both in order to do my job well. But that tug of war is tough. So I’m curious, your firm is very large now, you’re a steward of external capital, and you have a $3 billion book yourself. How do you do it? How do you balance the two?

Andy Schwartz:

Well, fortunately, my kids are grown, so I’m not coaching sports anymore. So I do have a little more time than most. Look, we have a great team. So the idea that I run the firm… I mean, I lead the firm, I don’t run the firm. We have great partners. We have great… Our manager team is fantastic. So I mean, they really run the firm. But this is where my passion is for now. So I don’t mind. Days are typically pretty long. I don’t play golf during the week. Mara and I don’t travel probably as much as we should. Vacations are always a little bit mixed. There’s always room for calls and meetings and whatever.

But to me, I mean, I’m grateful to be in this situation. I’m enjoying it. This is such a privilege to be the person that people recognize as the leader of this bunch, of this group. I mean, it is the honor of my life. So I don’t think of it so much as work. It’s my advocation. It does get busy. There are some times where I have to remind myself, “Just enjoy the ride.” I get a little overwhelmed, but I get lots of help and that makes it possible.

Louis Diamond:

Yep. If you’re not doing the job of the folks that you’re encouraging and leading to do, how do you have fodder to train them, to teach them, to empathize with that?

Andy Schwartz:

Exactly, you don’t have the credibility. I can ask them to do almost anything because they know I do it myself, and I think that helps.

Louis Diamond:

Yep. So moving more into the decision to bring on private equity capital, what I thought was probably the most interesting component of your announcement that you took on PE investment was that you completely restructured or reoriented your firm prior to Joe Duran coming in 2024. Correct me if I’m wrong, but Bleakley Financial Group was almost all 1099 contractors. So everyone owned their own books of business, paid Bleakley a fee or an override for certain services. But now, today, over 85% of your advisors and your AUM are W-2 employees, meaning you converted them from 1099 to acquiring them or merging with them. To me, that’s the dream. It’s had to have been very, very, very hard and challenging because there’s so many aggregator firms or platforms that support independent advisors, but the value that they’ve created is fairly minimal relative to one cohesive firm. So can you just talk about that decision, a very big and brave decision to go down the path of acquiring or merging with the practices rather than letting them continue to operate independently?

Andy Schwartz:

Well, look, we had to… It’s funny because we had been having conversations for years with consultants, and they kept telling us what we had to do. Again, we’re not that smart, so we just kept thinking, “No, we don’t have to do that.” But we were told 10 years earlier that the only way that this thing has any value to the world is you’ve got to have EBITDA for the firm. We talked to all the smart people, we ignored all of them. But what happened was we needed capital and we needed equity in order to bring people on, because people aren’t just joining us just because we can help them grow a bigger business.

So the reason we went in the direction we went initially was we just needed capital. We wanted to grow the firm, and the only way we were going to get to is… What’s the old saying? What got us here is not going to get us there. So we needed capital. But we also realized that I had to have something I could sell in the marketplace. And people want equity. So they want cash, but they also want equity, because we’re talking to entrepreneurs. Kevin owned his own firm. He has $2 billion of assets. He wasn’t interested in being someone’s employee, but he was interested in being able to get leverage and be a partner and share equity in a larger firm that had the chance to grow even more. So what the gift that Joe Duran, the Rise folks gave us was that gift of structure and understanding. So that was really helpful, and that’s been a big part of our success.

Louis Diamond:

Yeah, it’s an amazing journey. Again, I think you could probably write a book or a case study on how that happened. I’m sure there were some downfalls, some people that weren’t all that excited about it, but the results speak for itself.

Andy Schwartz:

I think people ask all the time because I do get phone calls. People are trying to do this, and they’re struggling. It took us 90 days to basically do it. People say, “I’ve been at this for two years.” And the biggest issue is trust. Either they trust you or they don’t. At the end of the day, I always went to the advisor here, we were a firm for 30-plus years prior, and these guys knew that we always did what we said we were going to do, and we always did. If your people trust you, then you can do it. If your people don’t trust you, it isn’t going to work.

Louis Diamond:

In other words, your firm added immense value to the advisors as well. Aside from trust, if you weren’t providing a service or services that they found a value that they couldn’t access on their own, it would’ve been 85/15 going the other way for sure.

Andy Schwartz:

Yeah, 100%. I know it’s not easy, but it wasn’t that hard for us.

Louis Diamond:

Good. It’s well-earned. So I believe you were Rise Growth Partners’ first investment.

Andy Schwartz:

We were.

Louis Diamond:

That’s cool. It’s exciting. You get to be someone’s first, but did it make you uncomfortable that you were the first investment or did you see that as a positive?

Andy Schwartz:

I actually saw it as a positive. Well, one, because I recognized immediately that Joe Duran and his team were way smarter than we were certainly, and certainly with what we were trying to do. And I figured that it’s almost like the first child. They were so excited to have somebody, and there was so much time and energy, so they just really doted on us. They were really able to help us. Now they’ve got four or five groups that they work with, and obviously we’ve been launched. So the younger babies are getting more time and attention, although we get everything that we need from them. But yeah, that never concerned me. I always thought that would be our advantage. It actually turned out that way.

Louis Diamond:

Interesting. In thinking through a sale or a minority sale, did you entertain other types of capital, whether it was a family office or a multitude of other private equity sponsors or selling the firm outright?

Andy Schwartz:

Yeah, we probably had four or five very, very serious conversations. Actually, some got pretty close to the end where we basically just made the decision not to do it. One was a much larger firm, good people. But the problem always was… I was always going to get rich out of the deal because it was going to be 100% sale, but there was really no lift or leverage from the advisors. So the principals, they were willing to pay me a big multiple and my partners a big multiple, and pay these guys basically an average multiple. So we had always told our guys, “Let’s stay together, and someday, this thing, whatever it’s going to turn into be, will benefit everyone.”

So with the Duran situation and the deal with Rise did, it gave everybody a chance to benefit from what we were doing. But what was good about all of those false starts was, it taught me a lot because I had… I know you’re involved in this, so you know better than I do, but we’d start conversations, somebody would reach out to me, I would be very specific about what I needed. They would say, “Yep, we can do that.” And then you get to the finish line, and it’s almost like, I started out, I wanted a tomahawk steak and a baked potato, and I ended up getting a two-day-old hamburger with some cold French fries. It’s like, I know I’m not that smart and I know you’re the PE guys, but for God’s sakes, we’re not stupid.

So it was funny because in January of ’24, I told my partners, “I don’t want to have any more of these conversations. It was a waste of time and energy. I’m sick of talking to these people. Let’s just put our heads down, and then let’s grow the firm a little bit more, and then we’ll see what the world looks like.” And then I get introduced to Duran.

Louis Diamond:

Perfect. Makes sense. Yeah, so you were well-educated on the market, the types of buyers, and I always say it’s almost more important to understand what you don’t want more than what you do want. The only way oftentimes to understand what you don’t want is to experience it and touch and feel it and really get into the weeds on it. I like too, Andy, I saw in an article, you said that “we’re private equity invested, we’re not private equity owned,” which is a very cool dynamic. I could imagine why that was important to you to retain majority control.

Kevin, I want to bring you back into the conversation. Thank you for being patient here. But I mean, I would imagine you had some real choices. I mean, you could have stayed at Northwestern and been very successful, gone through with your internal succession plan. You could have gone to an independent BD, monetized, figured out succession later. You could have sold the business to a strategic acquirer. You were big enough to take on an investor in some capacity on your own. So options wasn’t your problem. Maybe just walk us through. Did you consider any other pathways? And what were the pros and cons in your mind that led you to doing a transaction with Andy?

Kevin Spahn:

I’m a little different, I think, than most people in this industry. Even as you grow your business at a certain percentage, none of that stuff has ever really meant anything to me. All I know is I like what I do. So when I came into the business, because I like it, I enjoy it, I spend time doing it, I’ve tried to get better at it. But it comes naturally because it’s something that I don’t look at Monday mornings as, “Oh, no, it’s Monday morning.” I’m excited to go to work.

My entire career, once I left law, my business has just grown over the years naturally. But you said something before, Louis, and I think this applies to me. I love to work with the clients. I don’t like what I have to do in terms of running the firm. I never have. It’s never been my cup of tea, but you have to do it if you run a firm. So number one, the thought of all the due diligence that I would have to do to research all the firms out there, I wasn’t really all that interested in doing that.

At the end of the day, it comes down to this word trust. I trust Andy. I trust the other partners here too, because I’ve known not just Andy, but I’ve known Scott and many of the other partners for years. So I knew what I was getting myself into. At the end of the day, I knew what they built. I was very comfortable with it, and I was either going to stay at Northwestern Mutual or I was going to come here, but I wasn’t going to go anywhere else.

I will say, since I’ve gone, it’s been exactly like I thought. I thought I trusted Andy. And if something happened along the way with the transition, everything that he said has been true, thing that he promised is real. As you deal with more complexities with a bigger book and more and more employees, I knew that I was almost at the breaking point in terms of my own organization and to merge into this organization that, as I said before, he’s already built out. I don’t have to do it. And to benefit from these great people that he has as part of his organization, that’s all been a real blessing for me and my team. So I didn’t shop the marketplace really, but I knew what I was getting into, and it’s worked out clear as I thought it would.

Louis Diamond:

That’s amazing. I think that’s what most people would covet. But it is a decision in and of itself to not shop the marketplace. I mean, from representing buyers or prospective buyers, I know the pricing leverage or the negotiation leverage and the valuation lift that comes from having an open market, having multiple bids, et cetera. It sounds like that wasn’t the… Obviously you wanted to get fair value for your firm, but for you, it was more, it’s trust, “I’m either going to just stay at Northwestern, which is the devil I know or it’s what I’ve known where I’ve been successful, or I’m going to go to the individual that I trust and forget about all the other noise.”

Kevin Spahn:

Well, Andy says things, but I know they’re true because I’ve seen him at work. I’ve seen how he’s acted. I’ve seen how he interacts with people. But here’s an example. He cares about the people that are at his firm. He says that, but I know it’s true because I see it. I’m the same. I really care about the people in my firm. So as I think about, well, what about the future of two groups, my clients, but also the people that work in my firm? They’re going to be around long after I am. Well, I don’t want myself to retire someday, get a big check, because there’s all sorts of options to get a check. If I get a check and then my client’s scatter to the wind, and my employees don’t really have a future and they just have to go and find their own way, that wasn’t attractive at all to me.

So one of the things that I really appreciate about this opportunity is that there is a plan for both my clients and my employees or the younger team members at formerly Spahn Financial, where I feel very good about the fact that they have a solid, secure future in an industry that they’ve all grown to love without them having to go out and make their own way.

Louis Diamond:

Makes sense to me. We noted a couple of times in this interview, you talked about equity, partnership, both of you have. So Kevin, for you, what did it mean differently for you to become a partner and get equity in a larger firm rather than, we’ll say, the less risky move of just taking everything in cash? Why was that an important distinction for you?

Kevin Spahn:

For many years, when I left law and came into this business, I didn’t have any money at the time. I was just starting to make money as a lawyer. It takes a while. I started low. I got trial experience working for the government, so they didn’t pay much. That was three years. Then I was at a firm, and I was just starting to make more money. Then I made this big shift into a career that was all commissions. Well, even with what I thought was good early success, it took years till I really had any money in the bank or till I could actually tell my wife what we had in the bank because I really didn’t want her to know before promoting with her.

But I never was really worried about the future because I could see what it looked like. I also knew that I loved what I did every day, and I knew what it would lead to. It’s always been a part of my own career path that I got to the point somewhere along the way where I knew I had enough money. Somewhere along the way, I realized I could retire if I wanted to. Here’s the good news. I don’t want to. I like what I do. So it really wasn’t about the biggest check or anything like that. But when I go back to this analysis, well, how did I bring in business before? If you do a good job and the clients appreciate the work you do, they refer you to their friends. So that would happen. That’s how we grew our business.

But as I think about, “Well, I now have two grandchildren. I’d like to spend time with them. I have four children. They’re all going to get married and have kids,” I see over the next whatever, 10 or 15 years, I will want more flexibility. Andy and I both work pretty long hours right now. Won’t have the time for that. So what’ll happen? Well, at some point, I think the new business generation will slow down a little bit. And as I said before, as our clients age, some of the money starts coming out, that all affects the value of your book.

I feel pretty comfortable that the combination of what we’re doing and all my partners and then this firm that Andy’s built, I think that the growth will be pretty strong over the next 5, 10 years. So part of my thought process was I’m trusting in that and I’m buying into that. At the end of the day, I’m comfortable that the combination of what this is going to ultimately do for my clients and then my team, and then the value of my ownership compared to what I would’ve done on my own, the combination of it all is a really good solution for where I was a year ago.

Louis Diamond:

That sounds like it. I mean, I feel like the equity ownership dynamic, especially equity in a firm other than yourself, it’s either something that advisors get really charged up about because they see what you saw, Kevin. “I’m diversifying. It’s not just my growth, it’s everyone’s growth, that this asset, this equity has the ability to grow and scale quicker, more efficiently than just me.” At the same time, it’s probably the hardest decision for folks to step over the threshold and say, “I’ve been responsible for my growth, the value of my firm. If they’re independent already, I decide distributions, who to hire, et cetera. It’s for better or worse, it’s me and I’ve trusted myself.” So just getting comfortable with equity in someone else and taking your hands off the wheel a little bit is not something that everyone gets comfortable with. But it sounds like, for you, it was the absolute right decision for all the reasons you laid out.

Kevin Spahn:

You just laid it out perfectly. Years ago, I was going to bring in a junior partner. I was working with this guy, I was training him, teaching him, and he was planning on joining my firm as a junior partner. And then he started asking me what I paid everybody and why I paid these people that much money. I realized right then and there, the last thing I want to do is bring on someone who’s going to own 10% of my firm, and then they’re going to start complaining about what I pay everybody else. I didn’t want to have to make that decision with anybody.

It is a special person that I would ever be comfortable becoming a partner with. There are obviously many partners in this firm, but it comes down to the fact that my relationship with Andy as the managing partner and he has a lot of the influence in the firm. It really is trust. And I’ll say, my wife has known Andy a long time, and she trusts him as well. So for years, she would ask me, “What about Andy?” We would talk here and there about his firm, and she’s always been very comfortable with Andy and this potential move.

Louis Diamond:

There we go. Yeah, the actual decision dynamic was, your wife was comfortable.

Kevin Spahn:

Exactly. She was my secret weapon the whole time.

Louis Diamond:

There we go. Andy, I can guess the answer just from doing this conversation, but when you bought Kevin, I don’t know if it’s still true, but at the time, at least, he was your largest deal, and it was the first time you’re entering the Chicagoland area. What was it about Kevin and his practice that made you get to a yes?

Andy Schwartz:

Listen, I’ve talked to Kevin. I mean, Kevin and I stayed in touch. So for the 11 years, one of the few advisors that I maintained a real relationship with was Kevin. I never really thought he would join me, but I couldn’t help myself because Kevin was the best advisor in the system and the best person in the system. Truth is, I think Kevin did what he did as much as anything. If it was a good financial decision, he wanted to be able to give more money away someday. That’s how Kevin operates. So I’ve always been just a huge fan.

I would tease him. When I would joke with him, I would always ask him, “So when are we going to come partners?” And we’ve had our own inside joke, which we’re working on right now, right, Kev, which we’ll work on later this afternoon. So we’ve always had our deal. And then I got to tell you, it was probably, it’s still sometimes I wake up, and I can’t believe how fortunate that he actually did it. So yeah, forgetting about size, I mean, yeah, huge practice, our biggest acquisition, Chicago’s a great market, but I mean, it’s a one in a million. It was hard for him because the Northwestern Mutual didn’t want to lose him. So it was a very difficult decision because I think everybody felt the same way. So no, we’re blessed to have him. His team, he’s got a great team, made our firm better, and this is the best part of the journey for me.

Louis Diamond:

Amazing. Two more questions for you guys. I’m going to let you get on with your busy days. This would be for either or both of you. So for a Northwestern Mutual advisor, or let’s say any advisor within an insurance BD or who has some sort of proverbial golden handcuffs, whether it’s insurance renewals or pension or a very large unvested deferred compensation balance, really you can pick anything, many of these folks think they’re stuck. Might be unhappy. They might see promise elsewhere, but they can’t reconcile leaving something behind. Another example would be mutual fund trails through proprietary products or a bunch of alts where the trails aren’t going to carry over. What is it you’d want those individuals to understand about what’s actually possible or the mindset of leaving something behind to go run towards something else?

Andy Schwartz:

Well, I mean, look, the issue is… Look, there’s a number that can be too big to make sense to never leave. So people could be truly stuck. Renewals run out. And as you do less premium as you get older, the renewals get smaller. So renewals to me are a non-issue. I always like to talk to advisors of how much bigger. Our thing is we think we can grow your practice twice as fast and half the time. So if that’s true, and if you believe that’s true, then there’s math on that side, and you just compare the math to what you’re losing.

Everybody that we’ve brought on, everybody makes more money, and they’ve more than made up for what they give up. That doesn’t mean though that someone doesn’t have such a golden handcuff or some program that is so substantial. By the way, we do the math. I wouldn’t suggest they do it. If somebody were going to be upside down millions of dollars five years from now by joining me, I don’t want them to join me because they shouldn’t. They should do what’s best for them and their families. But we find that if we really look at the math, we really look at the growth, we look at the growth and the equity, we look at the leverage.

The difference is they do not work at firms. They work at institutions, and they’re good institutions, all of them. They’re good people, they’re good institutions, but they’re not firms. They have to build their own firm with an institution. It’s very costly. Their margins are much, much worse. We have great margins. Our partners have great margins of their P&Ls because they’re able to leverage an actual firm. So that’s a big difference. Whenever I talk to these people, I mean, you might build a firm within the institution, but you are not part of a firm. We are a firm. Everybody runs a P&L, they run a book inside a firm because we are a firm. I think that’s a big difference. Everybody’s going to make the decision for themselves.

Louis Diamond:

Interesting. Andy, I lied because you just sparked another question before my last one. Where do you plot OnePoint on the spectrum, let’s say, of conformity? So on the one hand, you have just someone’s operating completely independently, call shots, no outside capital. All the way to the very, very right would be, all investment portfolios are the same. Everyone’s the same brand. Advisors are basically relationship managers. Where would OnePoint be on the spectrum, and why is that decision important to you?

Andy Schwartz:

Yeah, I would say we’re probably somewhere in the middle. Everybody’s the same brand. That’s a deal breaker for us. Either you’re going to be a OnePoint partner or you’re not, or a OnePoint tenant or you’re not. Because I’m an advisor, I recognize that everybody comes to a firm or they come to a situation with legacy assets. They come with legacy assets that have taxes. They come with legacy relationships. So we’re not unrealistic, but we also recognize that centralized service is the key both for the value of the firm and the future and for the value and the way they operate within their businesses, grow their businesses.

So I would say that it’s a little bit of a struggle. It’s always anything that we do, there has to be a why. You don’t just say, “Okay, everybody is now in this program, and this is what we do.” You better have a why. If you’re going to force people into something, it better be really good because it’s got to be able to be better for them than for them not to be in that. So we have the CSA desk. We don’t force them, but 80% of our advisors are on the CSA desk. Same with the think tank. My guys, they all want to shoot for 100%. I said, “Great, we’ll shoot for 100%.” It will never be mandatory unless it is so good that it’s more cost-effective and it’s better than they can do on their own. When my team can prove that’s true, then we’ll become more restrictive. But until then, we serve these advisors for the idea that we would shove things down their throats. It’s not going to happen.

By the way, growth-oriented advisors are entrepreneurial. I don’t want zoo-fed bears. I want growth-oriented, entrepreneurial advisors. But at the same time, they can’t be the Wild West either. It’s because it detracts from value, and it makes it impossible to run a business. It makes it impossible to really leverage the opportunity. So I would say we’re probably somewhere in the middle.

Louis Diamond:

I would agree. It’s like a gentler form of one team, one dream, while still leaving some entrepreneurial freedoms in the hands of your high growth non-zoo-fed-bear advisors.

Andy Schwartz:

Yeah. Be realistic about what’s possible, what you’re asking them to do. I mean, these guys have to be able to do what’s best for their clients and selling all their assets and paying taxes, because this is the way we run a portfolio, is completely unacceptable. So all the constituents have to be considered.

Louis Diamond:

Perfect. Last question for each of you, parting thoughts. If you were speaking to yourself, so Kevin, back before you merged with Andy back 12-ish years ago, before you left Northwestern to launch Bleakley Financial, now called OnePoint, what is it that you would want to tell yourself? Or put another way, what would you tell the yous that are still captive to some sort of institution?

Andy Schwartz:

Kevin, why don’t you go first?

Kevin Spahn:

So what would I tell myself? I guess it goes back to what I said before. It’s all about, do you love what you do or not? I’ve always loved what I do. And I tell every potential new client that three things have to be present for you to work with me. Number one, you have to trust me. If you don’t trust me, it’s not going to work. You’re not going to stick with the plan. But if you do trust the advisor, that’s not necessarily enough. People trusted Bernie Madoff, but look where it got them. So you have to trust them. You have to see that they provide value. And if they don’t provide value, I don’t know why you would pay them.

And then the third one, which I almost call a get-out-of-jail-free card, is you have to be on the same page with them philosophically. You have to trust them, you have to provide value, and you need to be on the same page philosophically. So as I think back to myself 12 years ago, all I would realize is that I know things now that I didn’t know them. Part of the reason is that Andy talked about my team. I brought on some people in the last 12 years that I was basically following Andy’s lead. They know more than I do. We have several CFAs in our firm. I have a guy, his name’s Tim Funke. He was a portfolio manager at Northern Trust for 12 years before I hired him. When he left Northern Trust, he was working with families of 250 million or more liquid net worth. He’s great, and he’s been with me for 10 years. He’s a partner in our firm too. It has really helped me provide more value for my clients.

If I go back 12 years, I would just say associate yourselves with the best people you can, whether you bring them into your firm or this example of me joining with Andy’s firm. It accelerates your trajectory in ways that you can’t do on your own.

Louis Diamond:

Fantastic. Andy, same question for you.

Andy Schwartz:

Yeah. I would say, I like to go back 42 years and say, thank you, Andy, for the late nights chasing down $500 a year premiums, taking, I don’t know, Kev, is it fair to say five, six, seven years to break even net worth? I mean, to first dig out of the hole and then to actually… Because I don’t think I was telling Jodi that I had any money in the bank for at least six or seven years.

And then I would say, if I look back 12 years, I’m grateful that we had the courage to do it because sometimes… I would say my brother Scott was a big part of it because he really had more conviction. I was benefiting more from being in the Northwestern system with all the joint work. But I’m just grateful that we had the courage because it’s hard to do and that we did it, because I mean, it has worked out so well for us. I mean, not just financially, but I love the work we do. I love what we can provide for our clients. I love the flexibility. I like to say to people that I haven’t had a fight professionally in 12 years, and I used to have fights all the time. They were friendly fights. I mean, they were good people, and I know they did the best they could, but we were constantly fighting about what we couldn’t do. We were constantly… And I don’t do that anymore. That hasn’t been part of my life for so long, so I’ve become like a spoiled brat. I don’t have to fight with anybody.

Louis Diamond:

That’s amazing.

Andy Schwartz:

People always ask like, “Do you regret not doing it sooner?” And I would say probably not because it was a great run for us and great firm, a great institution, I met great people. And everything worked out really well. So would we have been bigger sooner? Maybe, but I have no regrets about that. That’s not really an issue for me.

Louis Diamond:

Absolutely amazing. This has been so much fun, guys. I love the dynamic and the personal relationship and all the trust that you’ve built. Andy, I can’t believe what you’ve accomplished. I mean, you were very successful and Northwestern famous when you’re on our show a couple of years ago. But just the level of growth, the conviction and what you’re doing, the way you’ve converted 1099s to W-2s and partners and just where you’re headed from here is really a treat. Honestly, I almost look at it as a case study for how to build an enterprise. And, Kevin, I really appreciate your candor for sharing behind the scenes of your decision to make the big decision to not just leave Northwestern, but also merge your firm and kind of take your hands off the wheel a little bit.

Andy Schwartz:

Well, my pleasure. It’s great to see you again, Louis, and happy to talk anytime.

Mindy Diamond:

As a financial advisor, you hold yourself to the highest standards of integrity, honesty, and credibility. You are successful because you take your professional responsibilities seriously and are dedicated to your clients. But are you living your best business life? Are your goals aligned with your firms or could a better option exist? Should I Stay or Should I Go? Is a book written with you in mind? It’s a self-guided journey that walks you through the key steps that we take with our advisor clients. This strategic thought process and roadmap to professional self-discovery is designed to help you ask the right questions and think critically and objectively, whether you’re considering change or not. Learn how to get your copy at diamond-consultants.com/thebook.

Build, Grow & Transact: Making the Leap from Northwestern Mutual to a $20B Enterprise

A conversation between Louis Diamond, Andy Schwartz, CEO of OnePoint BFG Wealth Partners and Kevin Spahn, Founder of Spahn Financial (now OnePoint BFG).

Louis Diamond:

Welcome to the latest episode of our podcast series for financial advisors. Today’s episode is Build, Grow & Transact: Making the Leap from Northwestern Mutual to a $20B Enterprise. It’s a conversation with Andy Schwartz, CEO of OnePoint BFG Wealth Partners, and Kevin Spahn, founder of Spahn Financial, now OnePoint BFG. I’m Louis Diamond, and this is The Diamond Podcast for Financial Advisors.

Mindy Diamond:

At Diamond Consultants, we help elite advisors identify the right environment for their businesses to thrive, whether that’s at a wirehouse, boutique, or independent firm. With nearly three decades of experience, we’ve guided thousands of advisors and represented more than a quarter of a trillion dollars in assets transitioned. Each year, one in four advisors managing a billion dollars or more who change firms are our clients. Our process is education-driven and based on building relationships, starting as your strategic partner well before you’re even thinking of a move. To schedule a confidential conversation, call us at 908-879-1002.

Wondering why advisors change firms and where they’re headed? Are transition deals going up or down? Those very questions, and more, inspired us to create our annual Advisor Transition Report. It’s the award-winning data-driven resource designed for advisors that connects the dots between the motivations around movement and the firm’s appetite for top talent. Arm yourself with the knowledge you need to make smart decisions. Download your copy at diamond-consultants.com/transitionreport.

Louis Diamond:

There’s a big difference between building a successful practice and building an enterprise. I think Andy Schwartz and Kevin Spahn offer a unique perspective on that distinction from two very different sides. Both spent decades in the Northwestern Mutual system. Andy ultimately left to build what became OnePoint BFG Wealth Partners, taking the firm from roughly three billion to nearly 20 billion and transforming just about every aspect of the business along the way. Kevin built one of Northwestern Mutual’s top practices before reaching a different inflection point, deciding what he wanted the next phase of his career and business to look like. Rather than go independent on his own or simply monetize what he had built, he chose to become part of Andy’s growing enterprise.

That makes their story particularly relevant for our Build, Grow, and Transact series. Andy can speak to what it takes to build a firm capable of becoming an acquirer, from converting advisors from 1099s to W-2s, to creating equity opportunities, to bringing in outside capital while remaining very deliberate about being private equity-invested rather than private equity-owned. And Kevin brings the seller’s perspective, how you evaluate the economics, the trade-offs, and ultimately the people you’re trusting with the business you spent more than 30 years building. Because whether you’re building, buying, or considering a transaction of any kind, the numbers are only part of the equation. As you hear from both Andy and Kevin, trust may be the most important currency of all. So let’s get to it.

Andy and Kevin, thank you so much for both joining us today.

Andy Schwartz:

Great to see you again, Lewis. Thank you for having us.

Louis Diamond:

I’ve been excited about this interview for a bunch of reasons. One, our Build, Grow, Transact series has become a real staple of our show and we got lots to talk about there. But also, the friendship, the relationship that you two have had for over 30 years really stood out to me. So before we get into the nuts and bolts, talk about your relationship. How’d you guys meet, and how did your career stay so intertwined together when you’re in different geographies and at different firms, and have each been very successful in your own rights?

Andy Schwartz:

Sure. Kevin, do you want to start with that?

Kevin Spahn:

Sure. I started in this career in 1994 and met Andy sometime after that. He was a more advanced financial planner. I was an attorney, and then I transitioned into this business. So when I first joined Northwestern Mutual, which is my first broker dealer, I didn’t really have a background in investments. At the time, a lot of Northwestern Mutual reps were learning the investment business because they maybe originally started with Northwestern Mutual focusing more on insurance planning.

My background was more estate planning. At the time, if you think early ’90s, if you did estate planning, insurance often went hand in hand with that. The estate exemption in early 1990s was about $600,000. So if you pass more than $600,000 to your children, there was a 55% tax. One way around it was to put insurance in an irrevocable trust, help cover the tax that way. So it really was a popular common strategy back then, and it’s really what got me into the business.

But I quickly realized that I didn’t want my future to be insurance and estate planning. And there was a conflict if you acted as someone’s attorney and sold insurance. So I had to pick one way or the other. I decided long-term it would be better for me to move into the wealth management space. But with that little background in that, I had a lot of work to do. So took a lot of tests, became a certified financial planner.

But the person that helped me the most along the way was Andy. We became friends, we sat on committees together. That’s really how we met, I would say. So we worked side by side interacting with our home office and representing the field, bringing issues to the home office that we thought were beneficial to the field. As we did that together, I got to know Andy. And then separately, I learned from him how he built his business and how they would review clients’ portfolios and come up with solutions. So I really credit Andy with helping me more than anyone else to transition from attorney, financial planner doing more estate planning insurance to wealth management.

Louis Diamond:

Very cool. Hey, I would say, maybe I’m a little biased, that, Kevin, you picked the right path in hanging up the law shingle and coming into wealth management.

Kevin Spahn:

I tell a lot of people I’m a reformed attorney.

Andy Schwartz:

Great.

Louis Diamond:

Exactly. My dad would say the exact same thing. Very common at dinner tables in the Diamond households.

Andy Schwartz:

I was always grateful that I wasn’t smart enough to be an attorney.

Louis Diamond:

There we go.

Andy Schwartz:

That’s where my gratitude lies. Yeah.

Louis Diamond:

There we go.

Andy Schwartz:

Some would say he’s too smart.

Louis Diamond:

There we go. Andy, question for you. I mean, anyone who is at or was at Northwestern Mutual, I mean, you’re like Elvis to them. It’s absolutely crazy the amount of fanfare and brand recognition that you and your brother Scott have. But for those who maybe missed your first podcast appearance with us a number of years ago, or aren’t or weren’t within the Northwestern Mutual system, or haven’t been familiar with Bleakley and now OnePoint BFG, just give us the cliff notes, the origin story, how you got into the business, and how’d you get from here to there?

Andy Schwartz:

Yeah. So the origin is probably pretty common, probably by accident. Going into my senior year in college, I was working in a restaurant, had a falling out with my boss. I happened to be dating a woman who was living with a general agent with Fidelity Union Life. No one will have ever heard of Fidelity Union Life, but their secret sauce was they sold life insurance to college seniors on a note. So if you can get a $10 money order, because where I went to school, nobody had a checking account, then you could basically get a note signed and they would buy insurance. And then when they graduate, hopefully they’d pay for it. I started selling life insurance my senior year in college. And then my twin brother Scott, who is my partner, and has been for over 40 years, he took an interview with what was the nucleus of our present firm actually.

I just went up to Northern New Jersey in May of 1984 because I was an expert. I had been selling life insurance to college kids for six months, so I knew everything you had to know. We met with these guys, and we both ended up joining them. So that was a Northwestern Mutual district agency, and that was 1984. We got licensed right away. I got my CFP in ’86. We always knew that it was going to be about planning. So I think we had the right idea. We were a little ahead of the curve because there weren’t a lot of CFPs in ’86. We got securities license immediately. So before Northwestern had securities license, we got securities license with US Life actually.

And then it was really a volume business, a client-building business. We always tried to act as a firm and share resources. We were small, but like a lot of people, we started out selling A shares and B shares and C shares, doing financial planning, selling insurance, and then we made a lot of really good hires along the way. And then after 30 years at Northwestern Mutual, which was a great experience for me, and I have nothing but respect for the institution and certainly the advisors that are there, Kevin certainly was one of them, and I know he feels the same way, but we just wanted to have a little more flexibility. We went independent about 11, almost 12 years ago. We wanted to be able to be multi-custodial. We wanted to have a little bit more optionality for our clients and for ourselves.

We left Northwestern at three billion or so in assets, and that was in 2015. It’s in March of 2024, I get introduced to this guy with a crazy accent named Joe Duran. Funny, probably the only person in the industry that had no idea who Joe Duran was me. I’d never heard of Joe Duran. I don’t pay attention. I worry about our firm. I don’t worry about what’s going on outside. So I get introduced to Joe by a mutual friend, and we had an interesting conversation, and it took us probably about four or five months to figure out what we wanted to do. And then in August of ’24, myself and my three partners, we rolled in. And then in ’85, the rest of the firm rolled in. And we can talk a little bit more about that.

Today we’re 18-plus billion, growing quite a bit. We’ve been very lucky that we’ve made some very good decisions along the way. We’ve made some bad ones too. But most of the decisions had to do with the people that we hired, the people that we brought on to help us, because I think it’s really important. I always say that the biggest mistake advisors make is they buy their own bullshit, and I try not to, and I realize that I’m smart enough, but I’m certainly not the smartest guy. I’m rarely the smartest guy in the room. So what we try to do is hire lots and lots of really smart people. And we’ve done that. They’ve been loyal to us, we’ve been loyal to them. Yeah, so we’re blessed to have a really great team and lots of good partners. Yeah.

Louis Diamond:

Yeah, we’ll definitely get into more of the nuts and bolts of the decision to take on capital, partner with Joe Duran’s Rise, but that’s an amazing background. Andy, I have to give you credit because your style, and I think I’m sure there’s business benefits, but it comes from a good place, I’m sure. But the coaching and consulting and just assistance that I’ve heard you provide to so many past and current Northwestern Mutual advisors through sports camps is absolutely incredible. It’s very near and dear to my heart because we always try to lead with education and helping people. So I just wanted to call that out, that your reputation for just providing amazing guidance and coaching to advisors is unparalleled.

Andy Schwartz:

And it’s been the best part of our journey. We’ve been able to help so many people. We get way too much credit by the way. So everybody gives us way too much credit. But the way I look at it is, I’ve been able to leverage my life because I’ve been able to build a great life for myself and my family, but we’ve been able to leverage that, and that’s where the real gift is. So yeah, it’s been a joyful journey for us.

Louis Diamond:

Amazing. Kevin, question for you. You walked through your little bit unorthodox background to get into Northwestern. Can you talk about where your personal practice is today? And then I want to ask you about the decision to leave Northwestern and sell and team up with Andy and team.

Kevin Spahn:

Well, I have to go back to the beginning. What was attractive to me about this business is I went from a career which was confrontational adversarial. I was a trial attorney for six years, and every day I would fight with people over things I didn’t necessarily have a personal interest in and I didn’t really believe in always. But the adversarial confrontational nature wasn’t really my personality, and I would take it too personally. So sometimes I’d go home in a bad mood because I was fighting with somebody taking a deposition.

At night, after so many years as a trial attorney, I started going to people’s houses and doing wills and trusts. And that’s where the dynamic of working with a client or a potential client, feeling that you helped them and walking out of the meeting where they would appreciate what you did for them, and you build a relationship and actually all of a sudden have a friend, that dynamic was attractive to me. That’s really what got me to transition into the business.

So I think it was really helpful to me at the beginning of this career. As Andy said, we all grew our businesses one client at a time. There’s a lot of doors closed, phones hung up on. There’s many people that don’t want to talk to you. There’s many people that don’t call you back. There’s many people that you think you’re getting somewhere with and you don’t. And that’s difficult for people because people often, young reps take that as personal rejection.

I had the benefit of comparing what I was dealing with as a young financial planner to what I had dealt with as an attorney in litigation. I think it just was perspective that I knew I didn’t want to do that anymore. So the negatives to this business didn’t seem that bad to me. I loved the independence. I loved all the relationships that I was building. And that part of it is to this day my favorite part of the business.

When you ask about the present, what basically happens is you start out taking anybody and everybody as a potential client or as someone that you would be willing to work with. And then over time you work with more successful people. So where I’m at today is working with pretty successful people, but they’re all the same, meaning we like working with nice people. If people are nice, we work with them. I feel we can help anybody. Over the years, one client at a time.

The thing that I probably, if I could go back, would change is I think Andy and I are both good at meeting people and building trust and providing value, so that’s why they work with us. So I think that’s just something we’ve both been able to do. He’s much better than I am at building an organization. So I built an organization basically hiring people, that whenever we got too busy, I hired another person. Drawback in terms of that is, anybody that I interview I think is great, and I think they’d be great to join the organization. I like them all. In spite of that, I’ve also brought in many good people that I love.

At this point, my firm has 18 people. We’re a little subset of Andy’s larger firm. I think one of the most attractive things to me about joining Andy’s firm is what Andy mentioned before: the people. As opposed to me having to build this all out myself, going independent, Andy already did that. And he has the infrastructure that would allow me to just merge right into that and not have to go through the pain of figuring all that out, which I don’t even think I’m capable of, to be honest with you.

Louis Diamond:

You’re probably selling yourself short because the way I understood it, you had one of the top practices within the entire Northwestern Mutual systems, and it’s a firm filled with very successful advisors.

For you, Kevin, what was the driving force to leaving NM after all these years? What was bothering you or frustrating you that indicated to you that it was time to do something different?

Kevin Spahn:

To be honest with you, I was pretty happy at Northwestern Mutual. I love the company and the people. I still have many good friends there that I truly miss. The big thing for me, I don’t know if it was any one thing, to be honest with you, is Andy said there’s optionality, especially on the investment side. I think one of the things that happened to me is, when I first started, I was 31 years old, and most of the potential clients that I would meet and work with, they weren’t what I would call today great investment clients. They didn’t have a lot of money. They had great futures. They might’ve been earning significant income or on the way to earning significant income. So what did they need at that point in their life? They needed planning. They needed protection. They didn’t really need investment management because most of their investments were going into their 401(k).

But a lot of those clients that we would take on, and I think that’s the big advantage of Northwestern Mutual, you take on clients that a lot of the investor firms don’t want because they don’t have large investment portfolios. But at some point down the road, all of a sudden you wake up and they do have large investment portfolios. So you bring them in as clients that might buy life insurance from you or disability insurance or something like that. And then you help them, and you give them advice, and you build a relationship with them. Down the road, they make more and more money. They leave jobs, they roll 401(k)s, they have the ability to invest money, stock options, things like that. Next thing you’re doing more comprehensive planning that incorporates investments.

As that progresses even further, you work with larger and larger clients, much more significant net worth, more complexity, bigger tax issues. Some of the strategies and opportunities that we now have at this independent RIA are very attractive for these high-net-worth clients. Along the same lines, less of what I do at this point in my career is insurance, mostly because a lot of the people that I meet are older, they already bought insurance, they’re looking more for investment advice as opposed to insurance. So one of the things that most attracted me to Northwest Mutual was their strong insurance products, which helped me for many years. As time went on, I was doing less of that.

Louis Diamond:

Makes complete sense. So it was a changing of what clients wanted and just the circumstances of your clients where you said, “What got me here when I was 31 was insurance planning, and that’s what my clients needed. But as my practice has evolved, I’ve aged, my clients are older, have more money, the focus shifted from insurance to investments.” And then the distinction was, am I at the best place to run investments in addition to insurance planning, et cetera? It’s a very interesting dynamic. Just the shift in basically your legacy clients was what drove you to consider change.

Kevin Spahn:

That was a big factor. I think the second big factor was I had my own firm with 18 people. My succession plan was that at some point I would shift ownership of the firm to people that worked with me. So as they owned more of the firm, they would have revenue that was currently at the time being paid to me. In my mind, as it shifted to them, they would buy me out using revenue from the clients that we already had. And I realized that there were some issues with that. In our business, as you get older, in your client’s age, they start taking money out of their portfolios. So everyone understands that in our business, the younger average age client you have makes your book more valuable.

I was the biggest driver of new business at my firm, and I started to see that there were some problems with my succession plan. They included, if something happened to me during this succession, that would be a real problem for the people that were buying my business from me if I went that way. If something happened to some of my key people, that would’ve been a problem as well. So it was really attractive to me to… I wasn’t looking to sell my business, I was looking to merge it. So I merged it with Andy’s business.

I believe that Andy and what he’s put together and the actual idea of having partners. So I never really had partners, but now I do. Having partners that we’re all on the same page, we all have similar backgrounds, we all bring something different to the table, and we can learn and benefit from working with each other. But also, owning a little piece of a much larger firm was, number one, it put me in a better position in terms of the potential risk of something happening to me or one of my key people. But secondly, I just think it’s more likely to grow at a greater pace than my firm would’ve as I aged from my 60s to my 70s.

Louis Diamond:

Very interesting. It’s a great realization. I think it’s one that probably every firm owner grapples with at some point, is the romanticism or the ease, some would say, of an internal succession plan. Rewarding those who have helped you build the firm is something I think everyone is interested in. But once that’s put into practice, whether it’s because of capital or sky-high valuations or right people on the bus or risk, et cetera, nowadays oftentimes leads to a firm owner looking at a transaction, whether it’s a merger, a sale, a private equity, capital infusion as a means to solve for succession. So it’s a very interesting way you framed it.

Andy, I want to turn it over to you for a little bit. So you mentioned when you launched Bleakley Financial, which was the old name of your firm, out of Northwestern, you’re about three billion. I think I read that you’re about 10 billion or so when Joe Duran and Rise invested you in 2024. You just said you’re at 18 billion now in the middle of 2026. That is absolutely incredible and amazing.

Andy Schwartz:

We’ll be well over 20 by the end of the year without any additional organic growth.

Louis Diamond:

That’s absolutely incredible.

Andy Schwartz:

We’ve got a lot going on right now.

Louis Diamond:

What’s actually driven that? What’s been the playbook?

Andy Schwartz:

The three areas that are most important for us, and we had our town hall this morning, and we always talk about the things we focus on as a group, the first and most important is the client experience. I always say to people, if you are their advisor, then that means someone else isn’t. These people, they all deserve to be really well taken care of. They deserve the best service, they deserve the best advice. So that’s something we take really personally. So client experience first.

Then we also understand that we don’t just work for clients, we work for our advisors. So I have two jobs. I have, I don’t know, 500 clients I service with my team, and I work for Kevin and 36 other partners and all of our employees. Because again, I recognize that the decision Kevin made… We’re in the middle of a transition out with another advisor, and we pretty much talk to her every day, and I know how hard this is. A transition is so difficult. When you come from a good place, because any of the Northwestern advisor who joins, they’re coming from a good place, it’s not like they have to go anywhere, it’s difficult. So we have the massive responsibility that three or four or five or 10 years from now, that there better be hugs around that this was the best decision ever made or otherwise. That’s the kind of thing that keeps me up at night.

So we’ve got to take care of our client experience, we’ve got to take care of our advisor experience. And then obviously, we’ve got to grow the firm so the firm grows organically. So part of this whole idea of serving our advisors is we have to help our advisors grow. I talk to a lot of people on the acquisition side, and if I’m talking to an advisor, it doesn’t matter how big they are, we kind of think of it as a OnePoint way. There’s flexibility in the OnePoint way. But if I can’t help them grow, I don’t want them, because I say it all the time, I’m not the mafia. I’m not here to get a taste.

Louis, if you weren’t interested in joining us, if I thought that we could help you grow by doing that, then I want you bad. If I don’t think I can help you grow because we’re so different, or because you’re not going to adapt what we do, or there’s no leverage in it, or you’re already better than we are, I don’t want it. So for us, organic growth, number one, and I think you know the industries well enough, that’s got to be the key. We shoot for 10% organic growth. We’re at a little over 5% so far halfway through the year. So assuming we have the similar second half of the year, we’ll hit our 10. Last year we’re at 7.5%.

The second is the inorganic growth. If you truly build a platform, if you truly build a firm that advisors know that they’ll be supported, that they’ll be loved, and you’ll help them grow their businesses, it does make it easier for us. We’re not the highest bidder typically. We can’t. We respect our client’s capital, we respect their equity, so therefore we’re not going to go out there. We’re not an aggregator, we’re a firm. But I think that if we can get that message across, and I think we have, then advisors join us. So that’s been a big part of the growth. And then the market’s helped. Obviously, over the last two years, the market’s been helpful. So that’s how we’ve gone from 10 to 18 and on our way to 22 by year-end.

Louis Diamond:

This is absolutely incredible. Any advisor or firm owner would say organic growth is important, but just saying it’s important doesn’t mean it’s going to happen. So what are the ways in which you help your advisors or your own practice grow organically? What is it that OnePoint is doing for your advisors?

Andy Schwartz:

Starting with bringing on growth-oriented advisors. I mean, look, Kevin Spahn and I come from the same place. We learned how to sell. The great thing about coming out of whether they’re broker dealers or out of the different insurance BDs is, these are people that know how to sell. These are people that don’t think that selling is a bad word. A lot of times you go to the wirehouses and they’re not necessarily sales guys. They’re really smart. They think that they’re investment mavens and investment geniuses. I’m not interested in investment geniuses. I’m interested in people that want to take care of their clients, provide everything they can, clients first, do the proper planning, be good advisors, but they’re growth-oriented.

So as long as we’re talking with the right advisors. Again, if I’m talking to advisor and they might have a big practice, if they’re not growers, we’re not interested. There’s a sense of responsibility for all the partners because we are a true partnership. It’s not an aggregation. This is a firm. I’m responsible for Kevin. Kevin’s responsible to me. All of our partners are responsible to each other, because if we’re going to do a 10% organic growth target, and if some partner is negative 3%, we don’t put them through the spanking machine, but everybody is very aware of where everybody is and nobody wants to let their partners down.

I think either you’re a growth-oriented advisor or you’re a zoo-fed bear. There’s another expression that I got from another Rise Growth Partner or Rise Growth firm. We all kind of communicate and talk to each other. And I was talking about zoo-fed bears, and he said, we call them house cats that think they fight. So they’re house cats, but they have no claws. But I think if you’re careful about who you bring on as partners, and if they are workers, growers, they understand that their job in life is to serve the people. We talk about referrals, we do lots of training to help on referrals. We work on organic growth strategies from the firm, but a lot of it comes from the advisors themselves.

Louis Diamond:

Makes sense. So it sounds like, to boil it down, it’s being really selective and having a really clear sense of who’s the right fit for your firm. Not that there’s not amazing advisors out there, but just because you’re an amazing advisor, doesn’t mean you’re the right fit to join OnePoint.

Andy Schwartz:

I think the one big distinction and difference is other than the fact that we are minority-owned with private equity. So we own our business. I mean, I’m the CEO of the firm. I also have the biggest book in the firm. At least for right now, I mean, Kevin was transitioning, so I’m sure next year he’ll be the leading advisor. But I lead the firm, because as far as I’m concerned, you have to lead by example. We are completely aligned. I know exactly what Kevin does every day because I do the same thing. I’m not some attorney or accountant or private equity boss that’s saying, “Oh, I’ve got an idea for growth. We’ll just raise our fees by 5%.” Brilliant. Yeah, we are completely aligned, all of us. I think that makes us a little bit unique, and it really helps us, I think, in our growth trajectory.

Louis Diamond:

I would agree. The challenge that a lot of advisors-turned-firm-owners or turned-enterprise-builders have is the tug of war between the client work, which either is their ultimate passion and driving force, or it’s something they’re really good at minimum, versus being the owner, the operator, et cetera. I resonate very much, Andy, with the way you handle it. I do the same thing running a company, but also working with advisors. To me, I need to do both in order to do my job well. But that tug of war is tough. So I’m curious, your firm is very large now, you’re a steward of external capital, and you have a $3 billion book yourself. How do you do it? How do you balance the two?

Andy Schwartz:

Well, fortunately, my kids are grown, so I’m not coaching sports anymore. So I do have a little more time than most. Look, we have a great team. So the idea that I run the firm… I mean, I lead the firm, I don’t run the firm. We have great partners. We have great… Our manager team is fantastic. So I mean, they really run the firm. But this is where my passion is for now. So I don’t mind. Days are typically pretty long. I don’t play golf during the week. Mara and I don’t travel probably as much as we should. Vacations are always a little bit mixed. There’s always room for calls and meetings and whatever.

But to me, I mean, I’m grateful to be in this situation. I’m enjoying it. This is such a privilege to be the person that people recognize as the leader of this bunch, of this group. I mean, it is the honor of my life. So I don’t think of it so much as work. It’s my advocation. It does get busy. There are some times where I have to remind myself, “Just enjoy the ride.” I get a little overwhelmed, but I get lots of help and that makes it possible.

Louis Diamond:

Yep. If you’re not doing the job of the folks that you’re encouraging and leading to do, how do you have fodder to train them, to teach them, to empathize with that?

Andy Schwartz:

Exactly, you don’t have the credibility. I can ask them to do almost anything because they know I do it myself, and I think that helps.

Louis Diamond:

Yep. So moving more into the decision to bring on private equity capital, what I thought was probably the most interesting component of your announcement that you took on PE investment was that you completely restructured or reoriented your firm prior to Joe Duran coming in 2024. Correct me if I’m wrong, but Bleakley Financial Group was almost all 1099 contractors. So everyone owned their own books of business, paid Bleakley a fee or an override for certain services. But now, today, over 85% of your advisors and your AUM are W-2 employees, meaning you converted them from 1099 to acquiring them or merging with them. To me, that’s the dream. It’s had to have been very, very, very hard and challenging because there’s so many aggregator firms or platforms that support independent advisors, but the value that they’ve created is fairly minimal relative to one cohesive firm. So can you just talk about that decision, a very big and brave decision to go down the path of acquiring or merging with the practices rather than letting them continue to operate independently?

Andy Schwartz:

Well, look, we had to… It’s funny because we had been having conversations for years with consultants, and they kept telling us what we had to do. Again, we’re not that smart, so we just kept thinking, “No, we don’t have to do that.” But we were told 10 years earlier that the only way that this thing has any value to the world is you’ve got to have EBITDA for the firm. We talked to all the smart people, we ignored all of them. But what happened was we needed capital and we needed equity in order to bring people on, because people aren’t just joining us just because we can help them grow a bigger business.

So the reason we went in the direction we went initially was we just needed capital. We wanted to grow the firm, and the only way we were going to get to is… What’s the old saying? What got us here is not going to get us there. So we needed capital. But we also realized that I had to have something I could sell in the marketplace. And people want equity. So they want cash, but they also want equity, because we’re talking to entrepreneurs. Kevin owned his own firm. He has $2 billion of assets. He wasn’t interested in being someone’s employee, but he was interested in being able to get leverage and be a partner and share equity in a larger firm that had the chance to grow even more. So what the gift that Joe Duran, the Rise folks gave us was that gift of structure and understanding. So that was really helpful, and that’s been a big part of our success.

Louis Diamond:

Yeah, it’s an amazing journey. Again, I think you could probably write a book or a case study on how that happened. I’m sure there were some downfalls, some people that weren’t all that excited about it, but the results speak for itself.

Andy Schwartz:

I think people ask all the time because I do get phone calls. People are trying to do this, and they’re struggling. It took us 90 days to basically do it. People say, “I’ve been at this for two years.” And the biggest issue is trust. Either they trust you or they don’t. At the end of the day, I always went to the advisor here, we were a firm for 30-plus years prior, and these guys knew that we always did what we said we were going to do, and we always did. If your people trust you, then you can do it. If your people don’t trust you, it isn’t going to work.

Louis Diamond:

In other words, your firm added immense value to the advisors as well. Aside from trust, if you weren’t providing a service or services that they found a value that they couldn’t access on their own, it would’ve been 85/15 going the other way for sure.

Andy Schwartz:

Yeah, 100%. I know it’s not easy, but it wasn’t that hard for us.

Louis Diamond:

Good. It’s well-earned. So I believe you were Rise Growth Partners’ first investment.

Andy Schwartz:

We were.

Louis Diamond:

That’s cool. It’s exciting. You get to be someone’s first, but did it make you uncomfortable that you were the first investment or did you see that as a positive?

Andy Schwartz:

I actually saw it as a positive. Well, one, because I recognized immediately that Joe Duran and his team were way smarter than we were certainly, and certainly with what we were trying to do. And I figured that it’s almost like the first child. They were so excited to have somebody, and there was so much time and energy, so they just really doted on us. They were really able to help us. Now they’ve got four or five groups that they work with, and obviously we’ve been launched. So the younger babies are getting more time and attention, although we get everything that we need from them. But yeah, that never concerned me. I always thought that would be our advantage. It actually turned out that way.

Louis Diamond:

Interesting. In thinking through a sale or a minority sale, did you entertain other types of capital, whether it was a family office or a multitude of other private equity sponsors or selling the firm outright?

Andy Schwartz:

Yeah, we probably had four or five very, very serious conversations. Actually, some got pretty close to the end where we basically just made the decision not to do it. One was a much larger firm, good people. But the problem always was… I was always going to get rich out of the deal because it was going to be 100% sale, but there was really no lift or leverage from the advisors. So the principals, they were willing to pay me a big multiple and my partners a big multiple, and pay these guys basically an average multiple. So we had always told our guys, “Let’s stay together, and someday, this thing, whatever it’s going to turn into be, will benefit everyone.”

So with the Duran situation and the deal with Rise did, it gave everybody a chance to benefit from what we were doing. But what was good about all of those false starts was, it taught me a lot because I had… I know you’re involved in this, so you know better than I do, but we’d start conversations, somebody would reach out to me, I would be very specific about what I needed. They would say, “Yep, we can do that.” And then you get to the finish line, and it’s almost like, I started out, I wanted a tomahawk steak and a baked potato, and I ended up getting a two-day-old hamburger with some cold French fries. It’s like, I know I’m not that smart and I know you’re the PE guys, but for God’s sakes, we’re not stupid.

So it was funny because in January of ’24, I told my partners, “I don’t want to have any more of these conversations. It was a waste of time and energy. I’m sick of talking to these people. Let’s just put our heads down, and then let’s grow the firm a little bit more, and then we’ll see what the world looks like.” And then I get introduced to Duran.

Louis Diamond:

Perfect. Makes sense. Yeah, so you were well-educated on the market, the types of buyers, and I always say it’s almost more important to understand what you don’t want more than what you do want. The only way oftentimes to understand what you don’t want is to experience it and touch and feel it and really get into the weeds on it. I like too, Andy, I saw in an article, you said that “we’re private equity invested, we’re not private equity owned,” which is a very cool dynamic. I could imagine why that was important to you to retain majority control.

Kevin, I want to bring you back into the conversation. Thank you for being patient here. But I mean, I would imagine you had some real choices. I mean, you could have stayed at Northwestern and been very successful, gone through with your internal succession plan. You could have gone to an independent BD, monetized, figured out succession later. You could have sold the business to a strategic acquirer. You were big enough to take on an investor in some capacity on your own. So options wasn’t your problem. Maybe just walk us through. Did you consider any other pathways? And what were the pros and cons in your mind that led you to doing a transaction with Andy?

Kevin Spahn:

I’m a little different, I think, than most people in this industry. Even as you grow your business at a certain percentage, none of that stuff has ever really meant anything to me. All I know is I like what I do. So when I came into the business, because I like it, I enjoy it, I spend time doing it, I’ve tried to get better at it. But it comes naturally because it’s something that I don’t look at Monday mornings as, “Oh, no, it’s Monday morning.” I’m excited to go to work.

My entire career, once I left law, my business has just grown over the years naturally. But you said something before, Louis, and I think this applies to me. I love to work with the clients. I don’t like what I have to do in terms of running the firm. I never have. It’s never been my cup of tea, but you have to do it if you run a firm. So number one, the thought of all the due diligence that I would have to do to research all the firms out there, I wasn’t really all that interested in doing that.

At the end of the day, it comes down to this word trust. I trust Andy. I trust the other partners here too, because I’ve known not just Andy, but I’ve known Scott and many of the other partners for years. So I knew what I was getting myself into. At the end of the day, I knew what they built. I was very comfortable with it, and I was either going to stay at Northwestern Mutual or I was going to come here, but I wasn’t going to go anywhere else.

I will say, since I’ve gone, it’s been exactly like I thought. I thought I trusted Andy. And if something happened along the way with the transition, everything that he said has been true, thing that he promised is real. As you deal with more complexities with a bigger book and more and more employees, I knew that I was almost at the breaking point in terms of my own organization and to merge into this organization that, as I said before, he’s already built out. I don’t have to do it. And to benefit from these great people that he has as part of his organization, that’s all been a real blessing for me and my team. So I didn’t shop the marketplace really, but I knew what I was getting into, and it’s worked out clear as I thought it would.

Louis Diamond:

That’s amazing. I think that’s what most people would covet. But it is a decision in and of itself to not shop the marketplace. I mean, from representing buyers or prospective buyers, I know the pricing leverage or the negotiation leverage and the valuation lift that comes from having an open market, having multiple bids, et cetera. It sounds like that wasn’t the… Obviously you wanted to get fair value for your firm, but for you, it was more, it’s trust, “I’m either going to just stay at Northwestern, which is the devil I know or it’s what I’ve known where I’ve been successful, or I’m going to go to the individual that I trust and forget about all the other noise.”

Kevin Spahn:

Well, Andy says things, but I know they’re true because I’ve seen him at work. I’ve seen how he’s acted. I’ve seen how he interacts with people. But here’s an example. He cares about the people that are at his firm. He says that, but I know it’s true because I see it. I’m the same. I really care about the people in my firm. So as I think about, well, what about the future of two groups, my clients, but also the people that work in my firm? They’re going to be around long after I am. Well, I don’t want myself to retire someday, get a big check, because there’s all sorts of options to get a check. If I get a check and then my client’s scatter to the wind, and my employees don’t really have a future and they just have to go and find their own way, that wasn’t attractive at all to me.

So one of the things that I really appreciate about this opportunity is that there is a plan for both my clients and my employees or the younger team members at formerly Spahn Financial, where I feel very good about the fact that they have a solid, secure future in an industry that they’ve all grown to love without them having to go out and make their own way.

Louis Diamond:

Makes sense to me. We noted a couple of times in this interview, you talked about equity, partnership, both of you have. So Kevin, for you, what did it mean differently for you to become a partner and get equity in a larger firm rather than, we’ll say, the less risky move of just taking everything in cash? Why was that an important distinction for you?

Kevin Spahn:

For many years, when I left law and came into this business, I didn’t have any money at the time. I was just starting to make money as a lawyer. It takes a while. I started low. I got trial experience working for the government, so they didn’t pay much. That was three years. Then I was at a firm, and I was just starting to make more money. Then I made this big shift into a career that was all commissions. Well, even with what I thought was good early success, it took years till I really had any money in the bank or till I could actually tell my wife what we had in the bank because I really didn’t want her to know before promoting with her.

But I never was really worried about the future because I could see what it looked like. I also knew that I loved what I did every day, and I knew what it would lead to. It’s always been a part of my own career path that I got to the point somewhere along the way where I knew I had enough money. Somewhere along the way, I realized I could retire if I wanted to. Here’s the good news. I don’t want to. I like what I do. So it really wasn’t about the biggest check or anything like that. But when I go back to this analysis, well, how did I bring in business before? If you do a good job and the clients appreciate the work you do, they refer you to their friends. So that would happen. That’s how we grew our business.

But as I think about, “Well, I now have two grandchildren. I’d like to spend time with them. I have four children. They’re all going to get married and have kids,” I see over the next whatever, 10 or 15 years, I will want more flexibility. Andy and I both work pretty long hours right now. Won’t have the time for that. So what’ll happen? Well, at some point, I think the new business generation will slow down a little bit. And as I said before, as our clients age, some of the money starts coming out, that all affects the value of your book.

I feel pretty comfortable that the combination of what we’re doing and all my partners and then this firm that Andy’s built, I think that the growth will be pretty strong over the next 5, 10 years. So part of my thought process was I’m trusting in that and I’m buying into that. At the end of the day, I’m comfortable that the combination of what this is going to ultimately do for my clients and then my team, and then the value of my ownership compared to what I would’ve done on my own, the combination of it all is a really good solution for where I was a year ago.

Louis Diamond:

That sounds like it. I mean, I feel like the equity ownership dynamic, especially equity in a firm other than yourself, it’s either something that advisors get really charged up about because they see what you saw, Kevin. “I’m diversifying. It’s not just my growth, it’s everyone’s growth, that this asset, this equity has the ability to grow and scale quicker, more efficiently than just me.” At the same time, it’s probably the hardest decision for folks to step over the threshold and say, “I’ve been responsible for my growth, the value of my firm. If they’re independent already, I decide distributions, who to hire, et cetera. It’s for better or worse, it’s me and I’ve trusted myself.” So just getting comfortable with equity in someone else and taking your hands off the wheel a little bit is not something that everyone gets comfortable with. But it sounds like, for you, it was the absolute right decision for all the reasons you laid out.

Kevin Spahn:

You just laid it out perfectly. Years ago, I was going to bring in a junior partner. I was working with this guy, I was training him, teaching him, and he was planning on joining my firm as a junior partner. And then he started asking me what I paid everybody and why I paid these people that much money. I realized right then and there, the last thing I want to do is bring on someone who’s going to own 10% of my firm, and then they’re going to start complaining about what I pay everybody else. I didn’t want to have to make that decision with anybody.

It is a special person that I would ever be comfortable becoming a partner with. There are obviously many partners in this firm, but it comes down to the fact that my relationship with Andy as the managing partner and he has a lot of the influence in the firm. It really is trust. And I’ll say, my wife has known Andy a long time, and she trusts him as well. So for years, she would ask me, “What about Andy?” We would talk here and there about his firm, and she’s always been very comfortable with Andy and this potential move.

Louis Diamond:

There we go. Yeah, the actual decision dynamic was, your wife was comfortable.

Kevin Spahn:

Exactly. She was my secret weapon the whole time.

Louis Diamond:

There we go. Andy, I can guess the answer just from doing this conversation, but when you bought Kevin, I don’t know if it’s still true, but at the time, at least, he was your largest deal, and it was the first time you’re entering the Chicagoland area. What was it about Kevin and his practice that made you get to a yes?

Andy Schwartz:

Listen, I’ve talked to Kevin. I mean, Kevin and I stayed in touch. So for the 11 years, one of the few advisors that I maintained a real relationship with was Kevin. I never really thought he would join me, but I couldn’t help myself because Kevin was the best advisor in the system and the best person in the system. Truth is, I think Kevin did what he did as much as anything. If it was a good financial decision, he wanted to be able to give more money away someday. That’s how Kevin operates. So I’ve always been just a huge fan.

I would tease him. When I would joke with him, I would always ask him, “So when are we going to come partners?” And we’ve had our own inside joke, which we’re working on right now, right, Kev, which we’ll work on later this afternoon. So we’ve always had our deal. And then I got to tell you, it was probably, it’s still sometimes I wake up, and I can’t believe how fortunate that he actually did it. So yeah, forgetting about size, I mean, yeah, huge practice, our biggest acquisition, Chicago’s a great market, but I mean, it’s a one in a million. It was hard for him because the Northwestern Mutual didn’t want to lose him. So it was a very difficult decision because I think everybody felt the same way. So no, we’re blessed to have him. His team, he’s got a great team, made our firm better, and this is the best part of the journey for me.

Louis Diamond:

Amazing. Two more questions for you guys. I’m going to let you get on with your busy days. This would be for either or both of you. So for a Northwestern Mutual advisor, or let’s say any advisor within an insurance BD or who has some sort of proverbial golden handcuffs, whether it’s insurance renewals or pension or a very large unvested deferred compensation balance, really you can pick anything, many of these folks think they’re stuck. Might be unhappy. They might see promise elsewhere, but they can’t reconcile leaving something behind. Another example would be mutual fund trails through proprietary products or a bunch of alts where the trails aren’t going to carry over. What is it you’d want those individuals to understand about what’s actually possible or the mindset of leaving something behind to go run towards something else?

Andy Schwartz:

Well, I mean, look, the issue is… Look, there’s a number that can be too big to make sense to never leave. So people could be truly stuck. Renewals run out. And as you do less premium as you get older, the renewals get smaller. So renewals to me are a non-issue. I always like to talk to advisors of how much bigger. Our thing is we think we can grow your practice twice as fast and half the time. So if that’s true, and if you believe that’s true, then there’s math on that side, and you just compare the math to what you’re losing.

Everybody that we’ve brought on, everybody makes more money, and they’ve more than made up for what they give up. That doesn’t mean though that someone doesn’t have such a golden handcuff or some program that is so substantial. By the way, we do the math. I wouldn’t suggest they do it. If somebody were going to be upside down millions of dollars five years from now by joining me, I don’t want them to join me because they shouldn’t. They should do what’s best for them and their families. But we find that if we really look at the math, we really look at the growth, we look at the growth and the equity, we look at the leverage.

The difference is they do not work at firms. They work at institutions, and they’re good institutions, all of them. They’re good people, they’re good institutions, but they’re not firms. They have to build their own firm with an institution. It’s very costly. Their margins are much, much worse. We have great margins. Our partners have great margins of their P&Ls because they’re able to leverage an actual firm. So that’s a big difference. Whenever I talk to these people, I mean, you might build a firm within the institution, but you are not part of a firm. We are a firm. Everybody runs a P&L, they run a book inside a firm because we are a firm. I think that’s a big difference. Everybody’s going to make the decision for themselves.

Louis Diamond:

Interesting. Andy, I lied because you just sparked another question before my last one. Where do you plot OnePoint on the spectrum, let’s say, of conformity? So on the one hand, you have just someone’s operating completely independently, call shots, no outside capital. All the way to the very, very right would be, all investment portfolios are the same. Everyone’s the same brand. Advisors are basically relationship managers. Where would OnePoint be on the spectrum, and why is that decision important to you?

Andy Schwartz:

Yeah, I would say we’re probably somewhere in the middle. Everybody’s the same brand. That’s a deal breaker for us. Either you’re going to be a OnePoint partner or you’re not, or a OnePoint tenant or you’re not. Because I’m an advisor, I recognize that everybody comes to a firm or they come to a situation with legacy assets. They come with legacy assets that have taxes. They come with legacy relationships. So we’re not unrealistic, but we also recognize that centralized service is the key both for the value of the firm and the future and for the value and the way they operate within their businesses, grow their businesses.

So I would say that it’s a little bit of a struggle. It’s always anything that we do, there has to be a why. You don’t just say, “Okay, everybody is now in this program, and this is what we do.” You better have a why. If you’re going to force people into something, it better be really good because it’s got to be able to be better for them than for them not to be in that. So we have the CSA desk. We don’t force them, but 80% of our advisors are on the CSA desk. Same with the think tank. My guys, they all want to shoot for 100%. I said, “Great, we’ll shoot for 100%.” It will never be mandatory unless it is so good that it’s more cost-effective and it’s better than they can do on their own. When my team can prove that’s true, then we’ll become more restrictive. But until then, we serve these advisors for the idea that we would shove things down their throats. It’s not going to happen.

By the way, growth-oriented advisors are entrepreneurial. I don’t want zoo-fed bears. I want growth-oriented, entrepreneurial advisors. But at the same time, they can’t be the Wild West either. It’s because it detracts from value, and it makes it impossible to run a business. It makes it impossible to really leverage the opportunity. So I would say we’re probably somewhere in the middle.

Louis Diamond:

I would agree. It’s like a gentler form of one team, one dream, while still leaving some entrepreneurial freedoms in the hands of your high growth non-zoo-fed-bear advisors.

Andy Schwartz:

Yeah. Be realistic about what’s possible, what you’re asking them to do. I mean, these guys have to be able to do what’s best for their clients and selling all their assets and paying taxes, because this is the way we run a portfolio, is completely unacceptable. So all the constituents have to be considered.

Louis Diamond:

Perfect. Last question for each of you, parting thoughts. If you were speaking to yourself, so Kevin, back before you merged with Andy back 12-ish years ago, before you left Northwestern to launch Bleakley Financial, now called OnePoint, what is it that you would want to tell yourself? Or put another way, what would you tell the yous that are still captive to some sort of institution?

Andy Schwartz:

Kevin, why don’t you go first?

Kevin Spahn:

So what would I tell myself? I guess it goes back to what I said before. It’s all about, do you love what you do or not? I’ve always loved what I do. And I tell every potential new client that three things have to be present for you to work with me. Number one, you have to trust me. If you don’t trust me, it’s not going to work. You’re not going to stick with the plan. But if you do trust the advisor, that’s not necessarily enough. People trusted Bernie Madoff, but look where it got them. So you have to trust them. You have to see that they provide value. And if they don’t provide value, I don’t know why you would pay them.

And then the third one, which I almost call a get-out-of-jail-free card, is you have to be on the same page with them philosophically. You have to trust them, you have to provide value, and you need to be on the same page philosophically. So as I think back to myself 12 years ago, all I would realize is that I know things now that I didn’t know them. Part of the reason is that Andy talked about my team. I brought on some people in the last 12 years that I was basically following Andy’s lead. They know more than I do. We have several CFAs in our firm. I have a guy, his name’s Tim Funke. He was a portfolio manager at Northern Trust for 12 years before I hired him. When he left Northern Trust, he was working with families of 250 million or more liquid net worth. He’s great, and he’s been with me for 10 years. He’s a partner in our firm too. It has really helped me provide more value for my clients.

If I go back 12 years, I would just say associate yourselves with the best people you can, whether you bring them into your firm or this example of me joining with Andy’s firm. It accelerates your trajectory in ways that you can’t do on your own.

Louis Diamond:

Fantastic. Andy, same question for you.

Andy Schwartz:

Yeah. I would say, I like to go back 42 years and say, thank you, Andy, for the late nights chasing down $500 a year premiums, taking, I don’t know, Kev, is it fair to say five, six, seven years to break even net worth? I mean, to first dig out of the hole and then to actually… Because I don’t think I was telling Jodi that I had any money in the bank for at least six or seven years.

And then I would say, if I look back 12 years, I’m grateful that we had the courage to do it because sometimes… I would say my brother Scott was a big part of it because he really had more conviction. I was benefiting more from being in the Northwestern system with all the joint work. But I’m just grateful that we had the courage because it’s hard to do and that we did it, because I mean, it has worked out so well for us. I mean, not just financially, but I love the work we do. I love what we can provide for our clients. I love the flexibility. I like to say to people that I haven’t had a fight professionally in 12 years, and I used to have fights all the time. They were friendly fights. I mean, they were good people, and I know they did the best they could, but we were constantly fighting about what we couldn’t do. We were constantly… And I don’t do that anymore. That hasn’t been part of my life for so long, so I’ve become like a spoiled brat. I don’t have to fight with anybody.

Louis Diamond:

That’s amazing.

Andy Schwartz:

People always ask like, “Do you regret not doing it sooner?” And I would say probably not because it was a great run for us and great firm, a great institution, I met great people. And everything worked out really well. So would we have been bigger sooner? Maybe, but I have no regrets about that. That’s not really an issue for me.

Louis Diamond:

Absolutely amazing. This has been so much fun, guys. I love the dynamic and the personal relationship and all the trust that you’ve built. Andy, I can’t believe what you’ve accomplished. I mean, you were very successful and Northwestern famous when you’re on our show a couple of years ago. But just the level of growth, the conviction and what you’re doing, the way you’ve converted 1099s to W-2s and partners and just where you’re headed from here is really a treat. Honestly, I almost look at it as a case study for how to build an enterprise. And, Kevin, I really appreciate your candor for sharing behind the scenes of your decision to make the big decision to not just leave Northwestern, but also merge your firm and kind of take your hands off the wheel a little bit.

Andy Schwartz:

Well, my pleasure. It’s great to see you again, Louis, and happy to talk anytime.

Mindy Diamond:

As a financial advisor, you hold yourself to the highest standards of integrity, honesty, and credibility. You are successful because you take your professional responsibilities seriously and are dedicated to your clients. But are you living your best business life? Are your goals aligned with your firms or could a better option exist? Should I Stay or Should I Go? Is a book written with you in mind? It’s a self-guided journey that walks you through the key steps that we take with our advisor clients. This strategic thought process and roadmap to professional self-discovery is designed to help you ask the right questions and think critically and objectively, whether you’re considering change or not. Learn how to get your copy at diamond-consultants.com/thebook.

Vanguard’s acquisition of Altruist could reshape RIA custody, bringing together Altruist’s technology with the scale, capital, and reputation of one of the industry’s best-known brands.

Vanguard’s acquisition of Altruist brings one of the financial industry’s most established brands together with one of RIA custody’s fastest-growing challengers.

In this Rapid Reaction Industry Update, Louis Diamond looks beyond the reported $4B+ purchase price to consider what the combination could mean for advisors—what he sees as the good news, the potentially negative outcomes, and everything in between. Altruist gains the capital, scale, and brand recognition that could help it compete more aggressively for larger RIAs and breakaway teams. Vanguard gains a technology-forward custody platform and greater access to the independent advisor channel.

The larger implication may be increased competition across RIA custody. With Schwab and Fidelity controlling much of the market, a Vanguard-backed Altruist could create new pressure around technology, pricing, service, referrals, and innovation—while raising new questions about how Vanguard balances its growing advice business with its role as custodian.

RIA custody has long been dominated by Schwab and Fidelity, particularly since Schwab’s acquisition of TD Ameritrade. Altruist emerged as one of the few credible challengers, building its position around modern technology, lower costs, and an advisor-focused platform.

But technology was only part of the equation. For larger breakaway teams in particular, Altruist faced another hurdle: brand recognition. Advisors could be impressed by the platform while still wondering how clients accustomed to names like Merrill, UBS, Morgan Stanley, Schwab, or Fidelity would respond to an unfamiliar custodian.

Vanguard changes that equation.

Louis examines why the acquisition makes strategic sense for both companies, from Vanguard’s push to expand access to financial advice to Altruist’s opportunity to operate with the backing of a well-capitalized, long-term owner.

For advisors, however, the bigger story is what happens next. A stronger competitor in custody could affect everything from technology and pricing to referral opportunities and the choices available to breakaway advisors.

There are also important questions still unanswered. Vanguard operates its own advice businesses. Altruist’s speed and fintech culture may be tested inside a much larger organization. And while Vanguard says Altruist will remain independent, the longer-term operating model remains to be seen.

The deal may not change advisors’ options immediately. But it has the potential to change the competitive dynamics surrounding those options considerably.

> Download a transcript of this episode…

Why is the Vanguard-Altruist acquisition significant for RIA custody? (03:53)
Louis explains why custody has remained highly concentrated around Schwab and Fidelity and how combining Vanguard’s scale and reputation with Altruist’s technology could create a much stronger third competitor.

What problem does Vanguard potentially solve for Altruist? (05:01)
Altruist has built a strong reputation among advisors for its technology, but larger breakaway teams have sometimes questioned whether clients would recognize or trust the brand. Vanguard could significantly reduce that concern.

Why does buying Altruist make sense for Vanguard? (07:00)
Vanguard has more than 50 million investors and has publicly discussed the need to expand access to financial advice. Louis considers how Altruist could give Vanguard both additional capacity and a stronger connection to independent advisors.

What does Altruist gain from Vanguard beyond capital? (09:51)
Louis discusses the significance of having a long-term, investor-owned parent rather than remaining dependent on successive rounds of venture capital, while gaining additional resources to develop custody, technology, and Hazel AI.

How could this acquisition change the choices available to breakaway advisors? (12:33)
The combination of Altruist’s technology with Vanguard’s brand could make the platform more viable for larger teams that previously hesitated because of client recognition and trust concerns.

Could Vanguard become a meaningful source of client referrals to RIAs? (13:42)
With millions of existing investors and more demand for advice than Vanguard can necessarily serve internally, Louis considers whether a future referral program connecting Vanguard clients with Altruist RIAs could become an important competitive advantage.

What are the potential risks of the Vanguard-Altruist combination? (16:54)
The acquisition also raises questions around Vanguard’s competing advice business, Altruist’s long-term independence, differences in corporate culture, innovation speed, and talent retention.

What could happen next across the custody market? (20:00)
Louis offers several predictions, including responses from Schwab and Fidelity, wider adoption of Hazel AI, a potential Vanguard-Altruist referral channel, and greater use of Altruist by breakaway advisors.

https://youtu.be/UlgCBjLXrnw

“Custody is really a trust business.”
— Louis Diamond (05:55)

“Every time a well-capitalized player shows up, especially in custody, advisors win.”
— Louis Diamond (12:33)

“Really, it’s tech-forward independence now without a brand trade-off.”
— Louis Diamond (13:42)

“There are always innovators showing up from outside the establishment, and every time one succeeds, advisors end up with more options and more leverage and more negotiating power than they had the year before.”
— Louis Diamond (22:44)

Louis sees several strategic reasons for the acquisition. Altruist gives Vanguard an established technology and custody platform serving more than 6,000 advisors, while potentially expanding Vanguard’s ability to reach investors through independent financial advisors. It may also provide another distribution channel for Vanguard investment products and future offerings.

Altruist gains the backing of one of the world’s largest and best-known investment firms while retaining, at least initially, its brand, leadership, and operating structure. Vanguard’s capital could allow Altruist to continue investing in custody capabilities, technology, and products such as Hazel AI without relying on additional venture funding rounds.

Schwab and Fidelity currently dominate RIA custody. Louis believes a Vanguard-backed Altruist could become a stronger challenger by combining Altruist’s technology and pricing model with Vanguard’s scale, capital, and reputation. That could increase competitive pressure around pricing, service, technology, and innovation.

Altruist’s technology has attracted advisor interest, but some larger breakaway teams have questioned whether clients would be comfortable holding substantial wealth with a less familiar custodian. Vanguard’s ownership could substantially reduce that brand-recognition hurdle and make Altruist a more viable option for larger teams.

No referral program has been announced. However, Louis believes it is an important possibility to watch. Vanguard has more than 50 million investors, while Altruist provides access to thousands of independent advisors. Connecting investors seeking human advice with RIAs on the Altruist platform could create a meaningful new referral channel.

Potentially. Vanguard operates its own financial advice businesses, creating some of the same competitive concerns advisors have raised about other custodians with retail advice operations. Other questions include whether Altruist will remain operationally independent over time and whether its culture and pace of innovation can be maintained under Vanguard ownership.

Louis expects the competitive response to be worth watching. He believes Schwab and Fidelity could respond through technology, AI, pricing, or other changes to their advisor offerings. He also expects Altruist to compete more aggressively for breakaway teams and sees the potential for Hazel AI to expand well beyond advisors who custody assets with Altruist.

Not necessarily. The transaction still needs to close, and its longer-term impact will take time to emerge. But for advisors evaluating custodians, independence, or the value they receive from existing partners, the acquisition adds another factor to consider as the competitive landscape evolves.

Louis sees several strategic reasons for the acquisition. Altruist gives Vanguard an established technology and custody platform serving more than 6,000 advisors, while potentially expanding Vanguard’s ability to reach investors through independent financial advisors. It may also provide another distribution channel for Vanguard investment products and future offerings.

Altruist gains the backing of one of the world’s largest and best-known investment firms while retaining, at least initially, its brand, leadership, and operating structure. Vanguard’s capital could allow Altruist to continue investing in custody capabilities, technology, and products such as Hazel AI without relying on additional venture funding rounds.

Schwab and Fidelity currently dominate RIA custody. Louis believes a Vanguard-backed Altruist could become a stronger challenger by combining Altruist’s technology and pricing model with Vanguard’s scale, capital, and reputation. That could increase competitive pressure around pricing, service, technology, and innovation.

Altruist’s technology has attracted advisor interest, but some larger breakaway teams have questioned whether clients would be comfortable holding substantial wealth with a less familiar custodian. Vanguard’s ownership could substantially reduce that brand-recognition hurdle and make Altruist a more viable option for larger teams.

No referral program has been announced. However, Louis believes it is an important possibility to watch. Vanguard has more than 50 million investors, while Altruist provides access to thousands of independent advisors. Connecting investors seeking human advice with RIAs on the Altruist platform could create a meaningful new referral channel.

Potentially. Vanguard operates its own financial advice businesses, creating some of the same competitive concerns advisors have raised about other custodians with retail advice operations. Other questions include whether Altruist will remain operationally independent over time and whether its culture and pace of innovation can be maintained under Vanguard ownership.

Louis expects the competitive response to be worth watching. He believes Schwab and Fidelity could respond through technology, AI, pricing, or other changes to their advisor offerings. He also expects Altruist to compete more aggressively for breakaway teams and sees the potential for Hazel AI to expand well beyond advisors who custody assets with Altruist.

Not necessarily. The transaction still needs to close, and its longer-term impact will take time to emerge. But for advisors evaluating custodians, independence, or the value they receive from existing partners, the acquisition adds another factor to consider as the competitive landscape evolves.

NOTE: The views and opinions expressed by the guests on this podcast are their own and do not necessarily reflect the views and opinions of Diamond Consultants. Neither Diamond Consultants nor the guests on this podcast are compensated in any way for their participation.

Rise and Reinvent: Joe Duran on Building and Rebuilding World-Class Firms

From Insurance Sales to $8B RIA: A Northwestern Mutual Breakaway Story

Diamond Consultants 4th Annual Advisor Transition Report

Vanguard Acquires Altruist: What It Means for RIAs, Custody & Breakaway Advisors

With Louis Diamond

Louis Diamond (00:06):

Welcome to the latest episode of our podcast series for financial advisors. Today’s episode is a special rapid reaction industry update, Vanguard acquires Altruist, what it means for advisors in the industry. I’m Louis Diamond, and this is The Diamond Podcast for Financial Advisors.

Mindy Diamond (00:28):

At Diamond Consultants, we help elite advisors identify the right environment for their businesses to thrive, whether that’s at a wirehouse, boutique, or independent firm. With nearly three decades of experience, we’ve guided thousands of advisors and represented more than a quarter of a trillion dollars in assets transitioned. And each year, one in four advisors managing a billion dollars or more who change firms are our clients. Our process is education driven and based on building relationships, starting as your strategic partner well before you’re even thinking of a move. To schedule a confidential conversation, call us at 908-879-1002.

(01:21):

Wondering why advisors change firms and where they’re headed? Are transition deals going up or down? Those very questions and more inspired us to create our annual advisor transition report. It’s the award-winning data-driven resource designed for advisors that connects the dots between the motivations around movement and the firm’s appetite for top talent. Arm yourself with the knowledge you need to make smart decisions. Download your copy at diamond-consultants.com/transitionreport.

Louis Diamond (02:05):

Funny how the biggest news in the business almost never comes from the firms everyone is watching. On Wednesday, August 26th, 2026, Vanguard announced its acquiring Altruist. If you asked me a year ago to name the company most likely to buy an RIA custodian, Vanguard would not have been near the top of my list. Vanguard was in the RIA custody business once. They left in 2003 and handed roughly $120 billion of advisor assets to TD Ameritrade on the way out. 23 years later, they’re buying their way back in, reported $4 billion or more. So let’s talk about what happened, why it matters, and where I think it goes from here.

(02:48):

What happened? On August 26th, 2026, a definitive agreement was announced out of Valley Forge, Pennsylvania. A deal is closing later this year where Vanguard is acquiring Altruist, the relative upstart RIA custodian. The price, an undisclosed number, but a reported $4 billion, some outlets reporting $4.6 billion or more. Either way, more than double their last private market valuation at the end of April 2025. Another element is Altruist is staying as a standalone. They’ll keep their brand, CEO, management team, and operate the same model just as a wholly owned subsidiary of Vanguard. Altruist in one breath, for those unaware, was a custodian and fintech company founded in 2018 by Jason Wenk. They became a self-clearing custodian, third largest as far as number of advisors served, north of 6,000 advisors, and had a reputation for serving smaller or upstart advisors, but recently started getting into more of the larger market breakaway space.

(03:53):

One estimate I’ve seen peg’s Altruist market share of RIA custody at around 6%, but you compare that to about three quarters of the market for Schwab and Fidelity combined. So a relatively small player, but a rapidly emerging player and threat in US RIA custody. This is not the first time Vanguard has been involved with Altruist. They reportedly were an early investor in Altruist back in 2020 and former Vanguard CEO, Bill McNabb, has been on the board of Altruist, so a lot of history between the firms. Let’s get into now why I think this is interesting for the industry as a whole. In my view, custody has never really been all that competitive, especially since TD Ameritrade sold to Schwab. You really had an oligopoly between Schwab and Fidelity. Sure, there’s a number of compelling, say more boutique custodians, whether Pershing Advisor Solutions, Goldman Sachs, which was another newer entrant to custody, LPL, Raymond James, First Clearing, and a number of others are also in the space, but it is a market that is dramatically dominated by the two largest players.

(05:01):

So I think this matters because you add an amazing venerable brand and reputation of Vanguard with this scrappy upstart custodian, and all of a sudden you can see a world where custody is one of the more competitive spaces in the industry. Altruist, in my view too, was one of the first credible challengers to the incumbent custodians in 20-ish years. Goldman has since picked up some decent market share and certainly they’re attractive for the segment of advisors. But Altruist with their tech-forward approach, low fees, and even just the way they went to market as an antagonist to Schwab and Fidelity, they’re a big deal and I think this just magnifies what they’re able to do. The gap though for Altruist was brand and reputation. Sure, they had amazing tech. No one ever has doubted that. Hazel AI, which they recently launched has been very well received.

(05:55):

Advisors I’ve worked with who have demoed the platform are incredibly impressed. The big Achilles heel though for Altruist has been my clients don’t know who Altruist is. Why would my clients put their millions of dollars of wealth with a self-clearing custodian that doesn’t have the same scale or reputation as the incumbent custodians? Well, that really goes away here. And at the end of the day, custody is really a trust business, but you’d have to think that a client would trust their assets held with Vanguard or with Altruist through Vanguard in a very similar way that they would trust assets held by Bank of New York Mellon or Charles Schwab or Fidelity Investments or Goldman Sachs. So to me, Vanguard acquiring Altruist solves that problem in one sentence, very simple. Why I think this makes sense for Vanguard? Salim Ramji, the CEO of Vanguard, has been saying since he arrived from BlackRock two years ago that only one in five Americans work with a fee-based financial advisor and that quality advice shouldn’t be a luxury good and this shortage is only going to get worse as advisors retire.

(07:00):

This is really him putting his money where his mouth is and really trying to make financial advice, human directed financial advice more accessible to everyday Americans and the upper echelons of wealth in this country. Vanguard as a company has over 50 million reported investors and over 12 trillion in assets. A lot of these people want Vanguard advice, but Vanguard hasn’t had the manpower or the capacity to deliver it itself. Buying Altruist over time can certainly solve that capacity gap and make it so that a human-based financial advisor or any of Vanguard’s internal platforms now have a greater ability to provide advice to Americans looking for financial advisors in the United States. I think this also means more distribution capability for Vanguard funds. Not that Vanguard has ever had a problem with distribution. They have a relatively small wholesaling force compared to other firms, but given their cost and reputation and performance, they’re really on pretty much every platform.

(08:04):

Most advisors have some clients that are invested into Vanguard mutual funds or ETFs, but this I think just gives them a greater ability to distribute Vanguard products, probably in a similar way to Goldman’s approach. When Goldman entered US RIA custody, in large part, they were doing it for distribution of different things. For Goldman, it was private markets and lending and other types of products. Vanguard is more ETFs and mutual funds, but Vanguard has also been pushing more into the private market space, so I can definitely see a world in which they can ratchet up the distribution of their products in a fairly cost-efficient way. I think to me, the most interesting thing about this marriage is the mission overlap is quite real. When Vanguard started, and to this day, their goal was to provide quality investment products at a fraction of the cost of the incumbents so that investing can be accessible to everyday Americans.

(08:59):

That’s exactly the verbiage that Jason Wenk and Altruist has used from the beginning, where they want to become a all-in-one hub or tech-enabled custodian so that an advisor, regardless of their size and a client regardless of their AUM, have the ability to get quality advice. I recently listened to a podcast called Acquired. We’ll link it in the show notes, but it’s a three-hour in-depth look into the building of Vanguard. And if you combine that with the podcast episode that I recorded with Jason Wenk, the CEO of Altruist, if you play them side by side, the parallels are eerily similar. So we’ll link both into the show notes, but I really think both of these firms were cut from the same cloth and really from the beginning, both have gone against the grain and tried to rattle incumbent players in the industry. So at least on paper, seems like a very good match.

(09:51):

Why does this deal make sense for Altruist? For one, for Jason Wenk and his leadership team, this has to be the outcome you drew up, maybe even better. Founding a new custodian in 2018, selling it in 2026, eight years later for over $4 billion, that’s a pretty incredible return on time for this team. They deserve it all and built something special and really entered into a space where no one wanted to venture just given the market share of the major incumbents, but good for them and has to feel good to pull off this type of sale. I think the big thing too is the buyer is the story. Vanguard as a company, it’s investor owned. They’re not private equity owned. They’re not VC backed like Altruist was. So Altruist can get off of the fundraising treadmill. They don’t have to worry about fund life or a five-year hold period or an eventual sale to a strategic.

(10:42):

Now they can really just focus on the business at hand, having one of the most well-capitalized companies in the world as their capital backer and owner. And every advisor on a PE-backed platform knows the question hanging over every relationship, who owns this next? That’s a question they won’t have to answer anymore at all, and they can really just focus now going forward. I think this also gives Altruist a fortress balance sheet and a ton of capital to keep pushing and developing their Hazel AI platform, which was launched in September 2025. Hazel’s an AI tax planning tool, kind of AI superpower that really has taken the industry by storm and has started to be sold as a standalone product to RIAs. And from what I’ve seen, they’ve sold it to over 1600 new RIAs just in the first month alone for $60 a seat per month, and that’s available to folks if they custody at Altruist or not.

(11:36):

So this, I think, just gives them an ability to distribute their fintech solutions and certainly develop their custody platform in a way that maybe was challenging or not as possible before. They can also take a longer term view instead of having to worry about they raised a series F, whatever comes after F and an eventual sale, investors wanting to get a return on capital, they can now focus on building over the long term, which has been Vanguard’s strategy all along. I think too, this will give Altruist the ability to invest in new capabilities that they didn’t have before, whether it’s lending or whether it’s more on the product side. It takes a lot to be a custodian. It seems like a relatively straightforward business just holding assets, but there’s a lot of products, solutions, really requirements that everyday investors and RIA clients have, and I think this will just ratchet up Altruist’s ability to close some of the capability gaps that they’ve had since they launched and they’re very transparent about those.

(12:33):

What I’m most excited about this, just coming from my vantage point in the industry, is why should an advisor care? To me, there’s five things that advisors should really take notice of with this acquisition. First one’s competition. Every time a well-capitalized player shows up, especially in custody, advisors win. Schwab and Fidelity have fought Vanguard in the asset management space for decades, and more recently in financial advice. Now you’re adding custody against a firm that doesn’t need to be profitable the next quarter, and all of a sudden we very much have an arms race and some competition is good for pricing, for service, for innovation, and I think this is going to be only positives for clients across the country, having another competitive option and keeping the incumbents really on their toes. Another reason, the breakaway shortlist has changed. Objection I always heard about Altruist was, “The tech is great, the AI seems cool, but how do I explain the name Altruist to a 68-year-old client who’s leaving Merrill or UBS or Morgan Stanley?”

(13:42):

While someone may still get some objections because Vanguard may not have the same brand cache as Goldman Sachs or UBS Private Wealth or Merrill Private Wealth, that objection got a lot weaker today. Really, it’s tech-forward independence now without a brand trade-off. It’s a genuinely different offer in the market than it was before. Third, I think this is one that hasn’t been talked about much, but should be watched closely, potential for referrals. Schwab confirmed last week that it was taking the SAN or the Schwab Advisor Network client referral minimum from two million to five million. For anyone not aware, referrals from the retail branches of Schwab and Fidelity are one of the major organic growth funnels for many of the top RIAs in this country and have driven valuations to billions and billions of dollars for firms that are in this program.

(14:36):

I really do see this as being a potential new massive referral opportunity of Vanguard existing clients and customers to Altruist custody to RIAs at a time when Schwab is trying to keep more of those referrals from themselves, which is a very savvy strategy, but at the same time, probably creates a bit of an opening for Altruist and Vanguard to become a really good referral hub for clients, which is a major draw for signing up new RIAs as clients, for breakaway advisors, et cetera.

(15:07):

So more details need to come there. We don’t even know if they’re starting a referral channel, but I have to imagine that’s high in the punch list and will be a very compelling offering in the marketplace. Yeah, think about it. Vanguard is 50 million investors and a CEO who said multiple times that they don’t have enough advisors or humans to deliver this advice. So perfect. You now have a massive array of RIAs and more and more coming to the table who offer that advice and being able to still serve them, still keep the assets in-house, but do it in a way where Vanguard doesn’t have to scale up their advisor force. They now have advisors to refer to. Fourth is pricing. I think the Vanguard effect is going to be real here. When Vanguard started, and even to this day, they’ve been the one who’ve pushed down the expense ratio on mutual funds and ETFs.

(15:56):

It’s been a massive benefit to investors across this country. It’s been Altruist’s playbook all along too, more focused on the advisor, so offering amazing tech and a custody platform for virtually no cost to an advisor. So I would say whatever you’re paying for technology, for custody, and really anything else that Altruist and Vanguard might touch, I would expect it to go down potentially and just have more pressures on the incumbent firms to really sharpen their pencil or to get more creative on pricing and innovation. I think that the fifth thing to keep in mind is Schwab has long used its scale and positioning in the market to best competitors, whether it was going to $0 on tickets for equities and ETFs, et cetera, a number of years ago or a number of other strategies they’ve taken. Now you have a firm that has similar scale as Schwab, a reputation for playing the long game and being comfortable making less money in the process.

(16:54):

So again, massive benefit to the advisors to have another major player driving down costs and increasing innovation in the space. But this is not all positives. As with anything, there’s the good and the bad, and also some open questions. The biggest, I think, downside or potential thing to watch here, and certainly if you are a BDO at a custodian, this is the line you’re using, “Vanguard has its own advice business, personal advisor, digital advisor, and a CEO who stated that his goal is that an advisor is in every investor’s pocket.” So now you have the custodian that’s holding your client’s assets also running one of the largest advice operations in the country. We’ve heard this concern in the past about Schwab or Fidelity where you have RA custody and then these firms have massive retail distribution networks. So certainly Vanguard, I think, will be in the same lane.

(17:46):

And if you look at a Pershing or an LPL or Raymond James, it’s a little bit different because they don’t have their own channels in the same way that Schwab or Fidelity do. So certainly if you’re BNY Mellon in particular, which is a straight B2B custodian, this is a clear point of differentiation for Vanguard, Altruist and certainly versus the other custodians. Next one is Vanguard has said that Altruist will remain a standalone business. The brand will stay intact, the management team, et cetera. But in fairness, every acquirer says versions of the same thing. The real test is let’s wait two years, three years and see how converging roles or similar roles across the firm start to converge into one, and over time will they more Altruist brand and human capital into one structure.

(18:36):

Right now we don’t know, but I’m always a bit skeptical with acquisitions that you have the honeymoon period, takes time for the deals to close, and then what happens a couple of years down the line? Either as there’s new executives in charge, there’s turnover, or just there’s certain synergies that can be had, and the best way to do it is by combining operations and the like.

(18:56):

The next risk, I think it might sound a little bit mundane, but it’s culture and speed. Vanguard based in Valley Forge, Pennsylvania, Altruist in LA, very different cultures. Altruist as a fintech company has been superfast to market, building, breaking things, innovating. And Vanguard, I think they’ve been extremely innovative on pricing, on product development, but I’ve never heard amazing reviews about Vanguard’s technology. So does this convergence of cultures create an issue? Does it create more bureaucracy for Altruist trying to build stuff? Is there a cultural mismatch when it comes to speed of market and innovation? And I think the last thing to keep in mind or to watch is the talent drainage at Altruist post-closing. Yes, I was a FinTech company and custodian offering equity, lots of upside for people that have taken this journey with them. Vanguard notoriously is the opposite. They don’t offer equity to anyone and they offer their employees high base salaries and you have a culture of longevity within the firm.

(20:00):

So after the lockup period is done for, or the earn out period is done for any Altruist equity owners and many of their employees, does that cause some talent drainage where folks want to go onto the next big thing, think what will happen to all the amazing SpaceX employees a year from now when their IPO lockups are done? Does that lead them to another opportunity? All these are questions I don’t know, but trying to play devil’s advocate. I think the biggest potential negative is just the Vanguard advice business as a competitor, a conflict to RIA custody. Let me give you a couple of predictions before we wrap here. I think Schwab and Fidelity will respond fast, whether it’s on the AI front or because the pressure is really on. I don’t know, maybe the $5 million referral minimum that Schwab just announced, maybe that sunsets after a period of time. I have no idea.

(20:53):

I’m also excited to see, we’ll call it the tech face off between Altruist and Robinhood. Robinhood acquired TradePMR, which is on the Wells Fargo First Clearing platform and is in the process of launching an RIA custodian themselves. So now you have, I think, two pretty incredible tech-forward custodians really trying to gain market share, so that will be fun to watch. Could there be a threat in the RIA platform space? So RIA platforms meaning RIAs, we call them supportive versions of independence, where advisors can plug into, they get technology, compliance, operations, et cetera, and still own their business. Given the end-to-end tech stack that Altruist boasts, and they’ve also been in development of their own corporate RIA, does that become that much more of a competitive feature that could possibly become a solution in and of itself that takes a dent out of these RIA platforms playbook?

(21:45):

I don’t know, but I think it’s possible. Altruist Hazel AI, does that push even well beyond custody? There’s a ton of AI and fintechs popping up around the industry. Hazel has certainly taken a lot of headlines and attention. With Vanguard behind it now, does that push the price lower? Does it help their distribution? Maybe you picture this, if you have a Vanguard-owned product sitting in the daily workflow of a competitor’s advisors, so let’s say you’re a Morgan Stanley, you’re a Schwab advisor, et cetera, do you now have a Vanguard-owned product in Hazel as part of your workflow or your fintech stack? Could be interesting. I will call a referral channel for Vanguard or Altruist, we’ll say within the next year or two. I think it would be crazy if that didn’t happen and that will be a massive disruptor. And finally, my prediction is more breakaways landing in Altruist. They’ve started to crack that door, but now with the powerful brand and reputation behind them, the sky’s probably the limit.

(22:44):

So in closing, a guy, Jason Wenk, started a company in 2018 in Los Angeles because he thought independent advisors deserve better software at a lower price. Eight years later, one of the most respected financial institutions in the world paid $4 billion for it, and the reason is he was right in that bet. There are always innovators showing up from outside the establishment, and every time one succeeds, advisors end up with more options and more leverage and more negotiating power than they had the year before. It’s a consistent theme across the industry. So nothing changes tomorrow, deals take time, deals have a way of falling apart, but if you’re evaluating custodians, thinking about independence for the first time, wondering whether your current partner is going to keep earning your business, today is a good day to reopen that question. And if you’re an advisor, I think cheer this on and be excited.

(23:42):

And as a industry participant, I am very excited to see how this deal takes hold and how this pushes the rest of the industry to innovate and continue to be better. So that’s it for today. Thank you for hearing my ramblings, and I’ll see you next time.

Mindy Diamond (24:02):

As a financial advisor, you hold yourself to the highest standards of integrity, honesty, and credibility. You are successful because you take your professional responsibilities seriously and are dedicated to your clients, but are you living your best business life? Are your goals aligned with your firms or could a better option exist? Should I Stay Or Should I Go? Is a book written with you in mind. It’s a self-guided journey that walks you through the key steps that we take with our advisor clients. This strategic thought process and roadmap to professional self-discovery is designed to help you ask the right questions and think critically and objectively, whether you’re considering change or not. Learn how to get your copy at diamond-consultants.com/thebook.

Vanguard Acquires Altruist: What It Means for RIAs, Custody & Breakaway Advisors

With Louis Diamond

Louis Diamond (00:06):

Welcome to the latest episode of our podcast series for financial advisors. Today’s episode is a special rapid reaction industry update, Vanguard acquires Altruist, what it means for advisors in the industry. I’m Louis Diamond, and this is The Diamond Podcast for Financial Advisors.

Mindy Diamond (00:28):

At Diamond Consultants, we help elite advisors identify the right environment for their businesses to thrive, whether that’s at a wirehouse, boutique, or independent firm. With nearly three decades of experience, we’ve guided thousands of advisors and represented more than a quarter of a trillion dollars in assets transitioned. And each year, one in four advisors managing a billion dollars or more who change firms are our clients. Our process is education driven and based on building relationships, starting as your strategic partner well before you’re even thinking of a move. To schedule a confidential conversation, call us at 908-879-1002.

(01:21):

Wondering why advisors change firms and where they’re headed? Are transition deals going up or down? Those very questions and more inspired us to create our annual advisor transition report. It’s the award-winning data-driven resource designed for advisors that connects the dots between the motivations around movement and the firm’s appetite for top talent. Arm yourself with the knowledge you need to make smart decisions. Download your copy at diamond-consultants.com/transitionreport.

Louis Diamond (02:05):

Funny how the biggest news in the business almost never comes from the firms everyone is watching. On Wednesday, August 26th, 2026, Vanguard announced its acquiring Altruist. If you asked me a year ago to name the company most likely to buy an RIA custodian, Vanguard would not have been near the top of my list. Vanguard was in the RIA custody business once. They left in 2003 and handed roughly $120 billion of advisor assets to TD Ameritrade on the way out. 23 years later, they’re buying their way back in, reported $4 billion or more. So let’s talk about what happened, why it matters, and where I think it goes from here.

(02:48):

What happened? On August 26th, 2026, a definitive agreement was announced out of Valley Forge, Pennsylvania. A deal is closing later this year where Vanguard is acquiring Altruist, the relative upstart RIA custodian. The price, an undisclosed number, but a reported $4 billion, some outlets reporting $4.6 billion or more. Either way, more than double their last private market valuation at the end of April 2025. Another element is Altruist is staying as a standalone. They’ll keep their brand, CEO, management team, and operate the same model just as a wholly owned subsidiary of Vanguard. Altruist in one breath, for those unaware, was a custodian and fintech company founded in 2018 by Jason Wenk. They became a self-clearing custodian, third largest as far as number of advisors served, north of 6,000 advisors, and had a reputation for serving smaller or upstart advisors, but recently started getting into more of the larger market breakaway space.

(03:53):

One estimate I’ve seen peg’s Altruist market share of RIA custody at around 6%, but you compare that to about three quarters of the market for Schwab and Fidelity combined. So a relatively small player, but a rapidly emerging player and threat in US RIA custody. This is not the first time Vanguard has been involved with Altruist. They reportedly were an early investor in Altruist back in 2020 and former Vanguard CEO, Bill McNabb, has been on the board of Altruist, so a lot of history between the firms. Let’s get into now why I think this is interesting for the industry as a whole. In my view, custody has never really been all that competitive, especially since TD Ameritrade sold to Schwab. You really had an oligopoly between Schwab and Fidelity. Sure, there’s a number of compelling, say more boutique custodians, whether Pershing Advisor Solutions, Goldman Sachs, which was another newer entrant to custody, LPL, Raymond James, First Clearing, and a number of others are also in the space, but it is a market that is dramatically dominated by the two largest players.

(05:01):

So I think this matters because you add an amazing venerable brand and reputation of Vanguard with this scrappy upstart custodian, and all of a sudden you can see a world where custody is one of the more competitive spaces in the industry. Altruist, in my view too, was one of the first credible challengers to the incumbent custodians in 20-ish years. Goldman has since picked up some decent market share and certainly they’re attractive for the segment of advisors. But Altruist with their tech-forward approach, low fees, and even just the way they went to market as an antagonist to Schwab and Fidelity, they’re a big deal and I think this just magnifies what they’re able to do. The gap though for Altruist was brand and reputation. Sure, they had amazing tech. No one ever has doubted that. Hazel AI, which they recently launched has been very well received.

(05:55):

Advisors I’ve worked with who have demoed the platform are incredibly impressed. The big Achilles heel though for Altruist has been my clients don’t know who Altruist is. Why would my clients put their millions of dollars of wealth with a self-clearing custodian that doesn’t have the same scale or reputation as the incumbent custodians? Well, that really goes away here. And at the end of the day, custody is really a trust business, but you’d have to think that a client would trust their assets held with Vanguard or with Altruist through Vanguard in a very similar way that they would trust assets held by Bank of New York Mellon or Charles Schwab or Fidelity Investments or Goldman Sachs. So to me, Vanguard acquiring Altruist solves that problem in one sentence, very simple. Why I think this makes sense for Vanguard? Salim Ramji, the CEO of Vanguard, has been saying since he arrived from BlackRock two years ago that only one in five Americans work with a fee-based financial advisor and that quality advice shouldn’t be a luxury good and this shortage is only going to get worse as advisors retire.

(07:00):

This is really him putting his money where his mouth is and really trying to make financial advice, human directed financial advice more accessible to everyday Americans and the upper echelons of wealth in this country. Vanguard as a company has over 50 million reported investors and over 12 trillion in assets. A lot of these people want Vanguard advice, but Vanguard hasn’t had the manpower or the capacity to deliver it itself. Buying Altruist over time can certainly solve that capacity gap and make it so that a human-based financial advisor or any of Vanguard’s internal platforms now have a greater ability to provide advice to Americans looking for financial advisors in the United States. I think this also means more distribution capability for Vanguard funds. Not that Vanguard has ever had a problem with distribution. They have a relatively small wholesaling force compared to other firms, but given their cost and reputation and performance, they’re really on pretty much every platform.

(08:04):

Most advisors have some clients that are invested into Vanguard mutual funds or ETFs, but this I think just gives them a greater ability to distribute Vanguard products, probably in a similar way to Goldman’s approach. When Goldman entered US RIA custody, in large part, they were doing it for distribution of different things. For Goldman, it was private markets and lending and other types of products. Vanguard is more ETFs and mutual funds, but Vanguard has also been pushing more into the private market space, so I can definitely see a world in which they can ratchet up the distribution of their products in a fairly cost-efficient way. I think to me, the most interesting thing about this marriage is the mission overlap is quite real. When Vanguard started, and to this day, their goal was to provide quality investment products at a fraction of the cost of the incumbents so that investing can be accessible to everyday Americans.

(08:59):

That’s exactly the verbiage that Jason Wenk and Altruist has used from the beginning, where they want to become a all-in-one hub or tech-enabled custodian so that an advisor, regardless of their size and a client regardless of their AUM, have the ability to get quality advice. I recently listened to a podcast called Acquired. We’ll link it in the show notes, but it’s a three-hour in-depth look into the building of Vanguard. And if you combine that with the podcast episode that I recorded with Jason Wenk, the CEO of Altruist, if you play them side by side, the parallels are eerily similar. So we’ll link both into the show notes, but I really think both of these firms were cut from the same cloth and really from the beginning, both have gone against the grain and tried to rattle incumbent players in the industry. So at least on paper, seems like a very good match.

(09:51):

Why does this deal make sense for Altruist? For one, for Jason Wenk and his leadership team, this has to be the outcome you drew up, maybe even better. Founding a new custodian in 2018, selling it in 2026, eight years later for over $4 billion, that’s a pretty incredible return on time for this team. They deserve it all and built something special and really entered into a space where no one wanted to venture just given the market share of the major incumbents, but good for them and has to feel good to pull off this type of sale. I think the big thing too is the buyer is the story. Vanguard as a company, it’s investor owned. They’re not private equity owned. They’re not VC backed like Altruist was. So Altruist can get off of the fundraising treadmill. They don’t have to worry about fund life or a five-year hold period or an eventual sale to a strategic.

(10:42):

Now they can really just focus on the business at hand, having one of the most well-capitalized companies in the world as their capital backer and owner. And every advisor on a PE-backed platform knows the question hanging over every relationship, who owns this next? That’s a question they won’t have to answer anymore at all, and they can really just focus now going forward. I think this also gives Altruist a fortress balance sheet and a ton of capital to keep pushing and developing their Hazel AI platform, which was launched in September 2025. Hazel’s an AI tax planning tool, kind of AI superpower that really has taken the industry by storm and has started to be sold as a standalone product to RIAs. And from what I’ve seen, they’ve sold it to over 1600 new RIAs just in the first month alone for $60 a seat per month, and that’s available to folks if they custody at Altruist or not.

(11:36):

So this, I think, just gives them an ability to distribute their fintech solutions and certainly develop their custody platform in a way that maybe was challenging or not as possible before. They can also take a longer term view instead of having to worry about they raised a series F, whatever comes after F and an eventual sale, investors wanting to get a return on capital, they can now focus on building over the long term, which has been Vanguard’s strategy all along. I think too, this will give Altruist the ability to invest in new capabilities that they didn’t have before, whether it’s lending or whether it’s more on the product side. It takes a lot to be a custodian. It seems like a relatively straightforward business just holding assets, but there’s a lot of products, solutions, really requirements that everyday investors and RIA clients have, and I think this will just ratchet up Altruist’s ability to close some of the capability gaps that they’ve had since they launched and they’re very transparent about those.

(12:33):

What I’m most excited about this, just coming from my vantage point in the industry, is why should an advisor care? To me, there’s five things that advisors should really take notice of with this acquisition. First one’s competition. Every time a well-capitalized player shows up, especially in custody, advisors win. Schwab and Fidelity have fought Vanguard in the asset management space for decades, and more recently in financial advice. Now you’re adding custody against a firm that doesn’t need to be profitable the next quarter, and all of a sudden we very much have an arms race and some competition is good for pricing, for service, for innovation, and I think this is going to be only positives for clients across the country, having another competitive option and keeping the incumbents really on their toes. Another reason, the breakaway shortlist has changed. Objection I always heard about Altruist was, “The tech is great, the AI seems cool, but how do I explain the name Altruist to a 68-year-old client who’s leaving Merrill or UBS or Morgan Stanley?”

(13:42):

While someone may still get some objections because Vanguard may not have the same brand cache as Goldman Sachs or UBS Private Wealth or Merrill Private Wealth, that objection got a lot weaker today. Really, it’s tech-forward independence now without a brand trade-off. It’s a genuinely different offer in the market than it was before. Third, I think this is one that hasn’t been talked about much, but should be watched closely, potential for referrals. Schwab confirmed last week that it was taking the SAN or the Schwab Advisor Network client referral minimum from two million to five million. For anyone not aware, referrals from the retail branches of Schwab and Fidelity are one of the major organic growth funnels for many of the top RIAs in this country and have driven valuations to billions and billions of dollars for firms that are in this program.

(14:36):

I really do see this as being a potential new massive referral opportunity of Vanguard existing clients and customers to Altruist custody to RIAs at a time when Schwab is trying to keep more of those referrals from themselves, which is a very savvy strategy, but at the same time, probably creates a bit of an opening for Altruist and Vanguard to become a really good referral hub for clients, which is a major draw for signing up new RIAs as clients, for breakaway advisors, et cetera.

(15:07):

So more details need to come there. We don’t even know if they’re starting a referral channel, but I have to imagine that’s high in the punch list and will be a very compelling offering in the marketplace. Yeah, think about it. Vanguard is 50 million investors and a CEO who said multiple times that they don’t have enough advisors or humans to deliver this advice. So perfect. You now have a massive array of RIAs and more and more coming to the table who offer that advice and being able to still serve them, still keep the assets in-house, but do it in a way where Vanguard doesn’t have to scale up their advisor force. They now have advisors to refer to. Fourth is pricing. I think the Vanguard effect is going to be real here. When Vanguard started, and even to this day, they’ve been the one who’ve pushed down the expense ratio on mutual funds and ETFs.

(15:56):

It’s been a massive benefit to investors across this country. It’s been Altruist’s playbook all along too, more focused on the advisor, so offering amazing tech and a custody platform for virtually no cost to an advisor. So I would say whatever you’re paying for technology, for custody, and really anything else that Altruist and Vanguard might touch, I would expect it to go down potentially and just have more pressures on the incumbent firms to really sharpen their pencil or to get more creative on pricing and innovation. I think that the fifth thing to keep in mind is Schwab has long used its scale and positioning in the market to best competitors, whether it was going to $0 on tickets for equities and ETFs, et cetera, a number of years ago or a number of other strategies they’ve taken. Now you have a firm that has similar scale as Schwab, a reputation for playing the long game and being comfortable making less money in the process.

(16:54):

So again, massive benefit to the advisors to have another major player driving down costs and increasing innovation in the space. But this is not all positives. As with anything, there’s the good and the bad, and also some open questions. The biggest, I think, downside or potential thing to watch here, and certainly if you are a BDO at a custodian, this is the line you’re using, “Vanguard has its own advice business, personal advisor, digital advisor, and a CEO who stated that his goal is that an advisor is in every investor’s pocket.” So now you have the custodian that’s holding your client’s assets also running one of the largest advice operations in the country. We’ve heard this concern in the past about Schwab or Fidelity where you have RA custody and then these firms have massive retail distribution networks. So certainly Vanguard, I think, will be in the same lane.

(17:46):

And if you look at a Pershing or an LPL or Raymond James, it’s a little bit different because they don’t have their own channels in the same way that Schwab or Fidelity do. So certainly if you’re BNY Mellon in particular, which is a straight B2B custodian, this is a clear point of differentiation for Vanguard, Altruist and certainly versus the other custodians. Next one is Vanguard has said that Altruist will remain a standalone business. The brand will stay intact, the management team, et cetera. But in fairness, every acquirer says versions of the same thing. The real test is let’s wait two years, three years and see how converging roles or similar roles across the firm start to converge into one, and over time will they more Altruist brand and human capital into one structure.

(18:36):

Right now we don’t know, but I’m always a bit skeptical with acquisitions that you have the honeymoon period, takes time for the deals to close, and then what happens a couple of years down the line? Either as there’s new executives in charge, there’s turnover, or just there’s certain synergies that can be had, and the best way to do it is by combining operations and the like.

(18:56):

The next risk, I think it might sound a little bit mundane, but it’s culture and speed. Vanguard based in Valley Forge, Pennsylvania, Altruist in LA, very different cultures. Altruist as a fintech company has been superfast to market, building, breaking things, innovating. And Vanguard, I think they’ve been extremely innovative on pricing, on product development, but I’ve never heard amazing reviews about Vanguard’s technology. So does this convergence of cultures create an issue? Does it create more bureaucracy for Altruist trying to build stuff? Is there a cultural mismatch when it comes to speed of market and innovation? And I think the last thing to keep in mind or to watch is the talent drainage at Altruist post-closing. Yes, I was a FinTech company and custodian offering equity, lots of upside for people that have taken this journey with them. Vanguard notoriously is the opposite. They don’t offer equity to anyone and they offer their employees high base salaries and you have a culture of longevity within the firm.

(20:00):

So after the lockup period is done for, or the earn out period is done for any Altruist equity owners and many of their employees, does that cause some talent drainage where folks want to go onto the next big thing, think what will happen to all the amazing SpaceX employees a year from now when their IPO lockups are done? Does that lead them to another opportunity? All these are questions I don’t know, but trying to play devil’s advocate. I think the biggest potential negative is just the Vanguard advice business as a competitor, a conflict to RIA custody. Let me give you a couple of predictions before we wrap here. I think Schwab and Fidelity will respond fast, whether it’s on the AI front or because the pressure is really on. I don’t know, maybe the $5 million referral minimum that Schwab just announced, maybe that sunsets after a period of time. I have no idea.

(20:53):

I’m also excited to see, we’ll call it the tech face off between Altruist and Robinhood. Robinhood acquired TradePMR, which is on the Wells Fargo First Clearing platform and is in the process of launching an RIA custodian themselves. So now you have, I think, two pretty incredible tech-forward custodians really trying to gain market share, so that will be fun to watch. Could there be a threat in the RIA platform space? So RIA platforms meaning RIAs, we call them supportive versions of independence, where advisors can plug into, they get technology, compliance, operations, et cetera, and still own their business. Given the end-to-end tech stack that Altruist boasts, and they’ve also been in development of their own corporate RIA, does that become that much more of a competitive feature that could possibly become a solution in and of itself that takes a dent out of these RIA platforms playbook?

(21:45):

I don’t know, but I think it’s possible. Altruist Hazel AI, does that push even well beyond custody? There’s a ton of AI and fintechs popping up around the industry. Hazel has certainly taken a lot of headlines and attention. With Vanguard behind it now, does that push the price lower? Does it help their distribution? Maybe you picture this, if you have a Vanguard-owned product sitting in the daily workflow of a competitor’s advisors, so let’s say you’re a Morgan Stanley, you’re a Schwab advisor, et cetera, do you now have a Vanguard-owned product in Hazel as part of your workflow or your fintech stack? Could be interesting. I will call a referral channel for Vanguard or Altruist, we’ll say within the next year or two. I think it would be crazy if that didn’t happen and that will be a massive disruptor. And finally, my prediction is more breakaways landing in Altruist. They’ve started to crack that door, but now with the powerful brand and reputation behind them, the sky’s probably the limit.

(22:44):

So in closing, a guy, Jason Wenk, started a company in 2018 in Los Angeles because he thought independent advisors deserve better software at a lower price. Eight years later, one of the most respected financial institutions in the world paid $4 billion for it, and the reason is he was right in that bet. There are always innovators showing up from outside the establishment, and every time one succeeds, advisors end up with more options and more leverage and more negotiating power than they had the year before. It’s a consistent theme across the industry. So nothing changes tomorrow, deals take time, deals have a way of falling apart, but if you’re evaluating custodians, thinking about independence for the first time, wondering whether your current partner is going to keep earning your business, today is a good day to reopen that question. And if you’re an advisor, I think cheer this on and be excited.

(23:42):

And as a industry participant, I am very excited to see how this deal takes hold and how this pushes the rest of the industry to innovate and continue to be better. So that’s it for today. Thank you for hearing my ramblings, and I’ll see you next time.

Mindy Diamond (24:02):

As a financial advisor, you hold yourself to the highest standards of integrity, honesty, and credibility. You are successful because you take your professional responsibilities seriously and are dedicated to your clients, but are you living your best business life? Are your goals aligned with your firms or could a better option exist? Should I Stay Or Should I Go? Is a book written with you in mind. It’s a self-guided journey that walks you through the key steps that we take with our advisor clients. This strategic thought process and roadmap to professional self-discovery is designed to help you ask the right questions and think critically and objectively, whether you’re considering change or not. Learn how to get your copy at diamond-consultants.com/thebook.

Choosing a platform isn’t just about technology or economics. It’s about finding a partner that helps you build the business you actually want to own. Shannon Spotswood explains why growth without compromise starts with choosing the right partner.

What should advisors really look for in a platform partner?

Jason Diamond sits down with Shannon Spotswood, CEO of RFG Advisory, to discuss why the best platforms do more than provide technology and operational support—they help advisors build stronger businesses. Shannon shares lessons from helping grow RFG into one of the industry’s leading supportive independence firms, covering everything from private equity partnerships and advisor experience to enterprise value, branding, and overcoming the fear that keeps many advisors from pursuing the business they truly want.

Most advisors evaluating independence compare technology, payouts, and service offerings.

Shannon Spotswood believes they’re asking the wrong first question.

After spending two decades in institutional investing and later helping to rebuild RFG Advisory from the ground up, Shannon has developed a philosophy centered on partnership. She argues that the best platforms function less like vendors and more like long-term business partners, helping advisors spend more time with clients, build enterprise value, and create businesses aligned with their vision rather than forcing compromises.

Jason and Shannon discuss what meaningful support actually looks like, why the right private equity partner can accelerate growth rather than restrict it, and why advisors should demand evidence – not marketing promises – when evaluating a platform.

The conversation also explores one of the industry’s biggest obstacles to change: fear. Shannon explains why outdated assumptions about transitioning firms continue to prevent advisors from building businesses they enjoy, even though data suggests the experience is often far less disruptive than many believe.

Ultimately, the discussion reframes independence itself—not as the destination, but as the beginning of choosing the right long-term partners.

> Download a transcript of this episode…

Why should advisors think of a platform as a business partner? (10:00)

Shannon explains why technology and service alone aren’t enough—and why the right partner should help advisors build the business they ultimately want to own.

What does “growth without compromise” actually mean? (10:00–17:30)

RFG’s philosophy centers on helping advisors focus on their highest-value work while surrounding them with integrated support designed to drive enterprise value.

Can private equity make a firm better? (25:00)

Rather than debating whether private equity is good or bad, Shannon explains why success depends on choosing a partner whose values and long-term vision align with yours.

How should advisors evaluate competing platforms? (43:00)

Her advice is simple: don’t rely on marketing. Speak with advisors already using the platform and ask firms to demonstrate – not simply promise – how they solve problems.

Why does fear keep so many advisors from making a change? (48:30)

Shannon discusses the “PTSD” many advisors carry from outdated transition stories and why today’s reality often looks very different.

What does the future of advisor platforms look like? (34:00–42:00)

The conversation explores advisor demand for greater personalization, stronger brands, AI-enabled efficiency, and partners that help advisors grow without sacrificing independence.

https://youtu.be/jaSt3-mO0so

“The right partners make you better. The wrong ones can quietly hold you back.”

“Don’t tell me. Show me.”

“Everything you want is on the other side of fear.”

“Your team deserves to be happy. You deserve to be happy.”

Shannon believes advisors should look beyond technology and economics and evaluate whether a platform acts like a true long-term business partner that helps them grow and build enterprise value.

By providing integrated support – from technology and compliance to marketing and coaching – that allows advisors to spend more time with clients while maintaining control of their businesses.

No. Shannon argues that success depends less on private equity itself and more on choosing partners who share the firm’s long-term vision and values.

Fear and outdated perceptions about transitions still influence decision-making, even though today’s transition experience is often much smoother than advisors expect.

Talk directly with affiliated advisors, ask for measurable evidence of results, and focus on how a platform responds to advisor feedback rather than marketing claims.

AI should enhance – not replace – the advisor relationship by creating operational efficiencies that allow advisors to spend more time delivering personalized advice.

Shannon believes advisors should look beyond technology and economics and evaluate whether a platform acts like a true long-term business partner that helps them grow and build enterprise value.

By providing integrated support – from technology and compliance to marketing and coaching – that allows advisors to spend more time with clients while maintaining control of their businesses.

No. Shannon argues that success depends less on private equity itself and more on choosing partners who share the firm’s long-term vision and values.

Fear and outdated perceptions about transitions still influence decision-making, even though today’s transition experience is often much smoother than advisors expect.

Talk directly with affiliated advisors, ask for measurable evidence of results, and focus on how a platform responds to advisor feedback rather than marketing claims.

AI should enhance – not replace – the advisor relationship by creating operational efficiencies that allow advisors to spend more time delivering personalized advice.

How to Evaluate a Firm Beyond the Obvious: A Framework for Advisors

Why You Should Stay at Your Current Firm

Shannon Spotswood is a 25+ year industry veteran with a tremendous amount of experience across both retail and institutional finance and an outstanding reputation built on her passionate leadership and ongoing success in investment banking, hedge fund portfolio management, business development and retail wealth management. Joining RFG in 2015, Shannon recognized the opportunity to channel her entrepreneurial experience and passion for service into leading a mission to create an Advisor-focused RIA of the Future delivering a supported independence platform that empowers Financial Advisors to build the businesses they want to have, without compromise.

Shannon’s career has been characterized by her determination to build something bigger than herself. Having fallen in love with finance at only age 14, she was focused on making an impact in a male-dominated industry. After graduating from college, Shannon spent 20 years in San Francisco working in institutional finance. She began her career in investment banking and eventually achieved her dream job as a Portfolio Manager of a long- short equity fund at Symphony Asset Management. The company was acquired by Nuveen in 2001.

After a decade at that firm and now a mother of 3 young children, Shannon turned her entrepreneurial passion in a new direction with a drastic pivot to start a luxury children’s clothing brand, Busy Bees. Taking her years of experience in qualitative analysis of retail companies, Shannon and her business partner built the brand from the ground up, ushering its’ growth from a garage to “Gwyneth Paltrow’s Goop” over the course of a few years.

Shannon and her family made the decision to move from the Bay Area to Birmingham, Alabama to be closer to family. And shortly after, the call to return to her first love, finance, grew to great to ignore.

In 2015, Shannon joined RFG Advisory as President, leading RFG as the firm has grown from $1.8B to over $5B. In July of 2024, Shannon was named CEO of RFG Advisory and currently serves in that role.

NOTE: The views and opinions expressed by the guests on this podcast are their own and do not necessarily reflect the views and opinions of Diamond Consultants. Neither Diamond Consultants nor the guests on this podcast are compensated in any way for their participation.

Growth Without Compromise: Building Around the Advisor Experience

A conversation with Jason Diamond and Shannon Spotswood, CEO of RFG Advisory.

Jason Diamond:

Welcome to the latest episode of our podcast series for Financial Advisors. Today’s episode is Growth Without Compromise: Building Around the Advisor Experience. It’s a conversation with Shannon Spotswood, the CEO of RFG Advisory. I’m Jason Diamond, and this is the Diamond Podcast for Financial Advisors.

Mindy Diamond:

At Diamond Consultants, we help elite advisors identify the right environment for their businesses to thrive, whether that’s at a wirehouse, boutique, or independent firm. With nearly three decades of experience, we’ve guided thousands of advisors and represented more than a quarter of a trillion dollars in assets transitioned. And each year, one in four advisors managing a billion dollars or more who change firms are our clients. Our process is education-driven and based on building relationships, starting as your strategic partner well before you’re even thinking of a move. To schedule a confidential conversation, call us at 908-879-1002.

Wondering why advisors change firms and where they’re headed? Are transition deals going up or down? Those very questions and more inspired us to create our annual advisor transition report. It’s the award-winning data-driven resource designed for advisors that connects the dots between the motivations around movement and the firm’s appetite for top talent. Arm yourself with the knowledge you need to make smart decisions. Download your copy at diamond-consultants.com/transitionreport.

Jason Diamond:

The right partners make you better. The wrong ones can quietly hold you back. Most conversations about independence focus on platforms as providers of technology, service, or infrastructure. Shannon Spotswood sees them differently. She believes advisors should evaluate a platform the same way they’d evaluate any long-term business partner, by asking whether it will help them build the kind of firm they ultimately want to own. That’s exactly what we explore in this episode. Shannon is the CEO of RFG Advisory, a firm that has grown from a startup into one of the industry’s leading supportive independence platforms. Along the way, she’s developed a unique perspective on what advisors should be looking for beyond economics and technology, and why the right partner can accelerate growth, strengthen culture, and help create a business that’s built to last. It’s a conversation that goes well beyond advisor platforms. We explore why Shannon believes so strongly in growth without compromise, what private equity can look like when the partnership is aligned, why firms shouldn’t try to be everything to everyone, and how advisors can separate marketing promises from meaningful support.

We also spend time on a topic that comes up in nearly every transition conversation my team has with advisors, fear. Shannon shares her perspective on why outdated assumptions about making a move continue to hold advisors back and why asking better questions and demanding evidence instead of promises can fundamentally change the way advisors evaluate every opportunity in front of them. Whether you’re considering independence, evaluating your current platform, or simply thinking about what comes next for your business, I think you’ll find Shannon’s perspective both practical and though-provoking, especially the sage advice in her words, “Don’t tell me, show me.” There’s a lot to take away from this conversation, so let’s get to it. Shannon, thanks so much for joining me. Thrilled to have you here.

Shannon Spotswood:

It’s excellent to be here. I’m really looking forward to it.

Jason Diamond:

Me too. Let’s dive right in. I want to start with your background. You spent 20 years in San Fran as an investment banker, then as a portfolio manager at Symphony Asset Management before even touching the world of wealth management. So what made you walk away from, we’ll call it the institutional world and enter the world of wealth management?

Shannon Spotswood:

It’s a little bit of a circuitous story, but I’m going to take us on the short route. I fell in love with Wall Street as a teenager, so I knew I wanted to work on Wall Street. My dream job was actually the time that I spent at Symphony Asset Management. I was a hedge fund manager for them for six years running a long/short equity fund. I then had three children in three and a half years. The firm was acquired by Nuveen Investments, and we grew very large, and I was on this really interesting trajectory within the institutional investment management world. And somewhat of the unexpected happened to me in 2010, we’d come through the financial crisis. I looked around the room, I had these three young children, and having loved finance since a very early age, I couldn’t crawl on an airplane anymore.

I fell out of love with what was honestly my first love. And I made a pretty radical pivot. I left Symphony, the tallest building at the time in San Francisco, and I partnered with a woman, and we built a luxury children’s clothing company for the next three years. So about as radical of a move as you can make, a $30 billion firm, big team, a tremendous growth ahead of us to upside down boxes of infant cashmere in a garage that flooded when it rained. So I had my startup in a garage moment. And while I was running the children’s clothing company, my husband and I took a big leap of faith and decided to move from San Francisco to Birmingham, Alabama to get closer to family, to raise our kids in the South, and just manifest the life that we wanted.

In the third year of running the kids’ clothing business, we checked every box of our initial business plan, and I turned to my business partner and I was like, “Now what? Should we raise capital? Should we open stores? Should we diversify manufacturing?” And we realized this beautiful little luxury brand that we had created was exactly what it needed to be. And so we restructured the company and I punched out of that. And I spent, really for the first time in my life, about five months in deep contemplation. What was the first hedge fund that I was a part of in San Francisco, my tour of duty through investment banking as an analyst associate and helping them start an M&A group. This incredible decade that I’d spent at Symphony, and then this wild out of left field moment of building a luxury children’s clothing brand. And it had such an epiphany, Jason. And it was this, that I was on the ground floor of all of those businesses. And my aha moment was, oh my gosh, I’m a builder.

What I love more than anything is sitting at the intersection of talent and opportunity and what I think is truly one of life’s greatest gifts, and certainly I think the most fun way to live your professional life, which is building something. So I put my resume together and I titled… It wasn’t even really a job search. It was more, I was new to Birmingham. I wondered if there was anything I could be of service in being a part of building something. So I put that resume together and I titled it Seeking the Intangible. And I was looking for that opportunity of talent and building something bigger than myself. And it was through some networking with my across the street neighbor who went on to become a board member of RFG who thought all I did was sell his wife incredibly expensive clothing who networked me to Bobby White, who’s the founder of RFG.

And in the first 10 minutes of my conversation with Bobby, and I’ll tell you, both of us went into that meeting thinking it was going to be a filler meeting. He was doing a favor for a friend, and I had seen a little bit of the wealth management industry after Nuveen had acquired Symphony and was like, “That’s not really my bag. My jam is more on the institutional side of things.” And 10 minutes into our very first meeting, we both canceled the rest of our day, and we spent the next two and a half hours in his office having a conversation that really started with what if. What if we took RFG, which had been founded in 2003, and at the time was an OSJ with LPL, what if we took that business and we tore it all the way down to the ground? And we rebuilt it from the ground floor up to be a platform that is designed, that is intentionally engineered, to serve independent advisors? What would it look like to be a client experience company first, a technology company second, and a corporate RIA third?

And I’ll tell you, walking out of that meeting, I was like, “This is it. This is it. This is the intangible. This is an opportunity to really build something very special.” And that’s how I found myself sitting in this talking to you today.

Jason Diamond:

Wow. So there’s a lot to unpack there. Thank you for sharing. And you shared it with a degree of vulnerability that I personally, I have a two-year-old and a three-week-old as of this recording. So it resonates with me. I think it resonates with a lot of advisors, people in our, and honestly, probably most industries, the constant pull in multiple different directions. And I love what you called it, seeking the intangible. And it sounds like you didn’t go in with any preconceived notion about… Many of our guests, by the way, that is the case. They walk in saying, “I knew since I was two years old I wanted to be in wealth management. I wanted to help be a steward of client…” And I love that your circuitous route took you a different direction.

I want to talk more about the firm, and we’ll dive in on some of these elements of your background also. But before we do, you mentioned a little bit of, at a high level, what RFG is. Give me a little more context, types of advisors you serve, types of clients you serve. And if you don’t mind, provide some stats around size as well.

Shannon Spotswood:

Absolutely. So we are on a mission to help independent advisors build their business without compromise by driving organic growth to create enterprise value. And I share that because in our mission statement is the passion that links us all together, which is helping independent advisors build what they want to envision for their clients, what they believe is the best representation of their vision and their values. So we are a platform, a full turnkey platform for independent advisors. We talk about our services as a flywheel. There’s a very intentional interdependency from technology to marketing to compliance to talent to investment management to coaching, operations, transition services, and capital solutions. All of it is knit together very thoughtfully in order to be able to deliver to the advisors on our promise to help them operationalize and professionalize their business, to serve their clients and to generate that organic growth, which is what translates into enterprise value.

What is so cool about the RFG advisor community, and I think is really the thread that binds between our teams and our advisors team is this servant heart growth mindset that you find it in every nook and cranny of RFG and certainly within all of our advisor partners. So the advisor profile for us, we do tend to skew a little bit younger. Average age is 45 years old. Organic growth across all of our advisors is north of 10%. So we’re very focused and leaned in on growth. We do have advisors that are lifestyle. We talk about them as lifestyle scaling and enterprise, and they run all along that growth at growth spectrum, depending on what do they want to build in their lives, what is going to help them really realize their dreams? And we’ll talk about this a little bit and just the growth of the firm and what we’ve been building, but we are at $9 billion.

So it’s been a big run in 2026, as I say, 10 years of pre-game warmup to be able to really talk about that level of growth. So just knocking on the door of $10 billion and truly, Jason, I can tell you, I feel like we’re just getting started. I feel like we are just at the beginning of the J-curve as advisors are really realizing that their most valuable asset is their time and the amount of enterprise value that they can create being independent. There’s a lot of different flavors of that. We’ve got some incredibly well-capitalized and very strong competitors, but the collective awareness around this bull market for advice that we’re sitting at the very beginning of is shining such a bright light on what does it mean to be independent? What does it mean to be really supported by a partner who’s all in to help them win? And that’s where we find ourselves. And by design, that’s where we find ourselves.

Jason Diamond:

Yeah, and it’s an exciting time. I completely agree. The space, the vertical you’re in, probably as much or more than any other pocket of the industry. You took the words out of my mouth, the J-curve. I completely agree with the story you’re telling. There’s one component of your background that I do want to ask about, which is many RIAs, platforms, and the like, the leadership team is intentionally ex-advisors in their own right. So I’m curious, do you think of it as a benefit or maybe to what degree is it not a benefit that you have never been an advisor and served clients? I do love the idea that you’re a business builder and you’re helping advisors to build a business. That’s not lost on me, but I’m curious specifically about never having been an advisor.

Shannon Spotswood:

I think it is so critical that we were advisor-founded. What we like to say is we’re advisor-founded and professionally-led. Bobby founded the firm in 2003. We partnered in 2015. Our third partner, Rick Wedell, who’s our chief investment officer, managing partner, joined in 2016. So the three of us really co-founded the version of RFG that is-

Jason Diamond:

The right version.

Shannon Spotswood:

… expressed in the market today. But you’re a hundred percent right to double click on this. And I think it is such an important area for reflection for advisors in terms of where are their greatest skills? Where does their passion lie? And what are they interested in building? That very first day that I met Bobby, his telling of the story is he looked at my resume the morning that we were meant to meet, and he is like, “Well, why would I hire her? She could do my job.” And he often talked about that where you get to this point as an advisor where the business is scaling and growing. And we certainly are seeing this in a lot of the larger teams that we’re talking to and the relationships that we’re beginning to build within the pipeline of these advisors who were attracted to the industry because they wanted to serve clients and find themselves as accidental CEOs, COOs, their chief cook and bottle washer to advisor to all of these C-suite titles.

And it’s not amplifying their natural skillset and it’s not aligned with what is actually their passion for the business. So I give a tremendous amount of credit to Bobby for recognizing more than 10 years ago really what it would take and how he could align team around him and build partnerships around him to be able to maximize the impact that we can have for advisors. So that north star of keeping advisors front and center is truly our, it is woven into our DNA and it is our north star. So we are a client experience company by design. We talk about it all the time, whether it’s how we’re building our team, how we’re thinking about investing in technology, how we’re soliciting feedback for advisors. I always say one of our greatest strengths as an organization is we’re active listeners and then we actually execute on it.

Our best ideas come from our advisors, but you’ve got to have that posture as a firm that everything you do is orienting around how do we help advisors operationalize, professionalize, drive organic growth, and create enterprise value? And you can’t do it sometimes. You’re either all in, chips all in, only winning when your advisors win, and only having that lens of will this benefit the advisor and their team or not. It’s not something that you can just dip your toe in and out of. And I think RFG, having that foundation from which to always build is absolutely critical.

Jason Diamond:

Can I try and paraphrase or synthesize, and you tell me if I get this right? The pitch is something to the effect of, “We are really good at what we do. Let us take all the BS off of your plate so that you can go out and be an advisor. Service your client and prospect.” Do you find that story is resonating more over time? I mean, you’ve been with the firm now long enough to see this kind of cycle of movement towards independence. How has that story evolved over time? Do you find it easier to tell?

Shannon Spotswood:

Oh my gosh, without question. And I would even put a shorter term window on it. I would say in the last 12 to 15 months-

Jason Diamond:

Oh wow.

Shannon Spotswood:

… there has been a collective awakening by advisors, and I think there’s a lot of contributing factors to that. One is obviously as we are all aware, the majority of the industry is now private equity backed. There has been a real focus on the aggregator model, transitioning advisors into a W-2 model. And as that has played out and that financial engineering has translated into some incredible valuations and returns, there has also been simultaneously advisors picking their head up and like, wait a minute, I wanted to get independent so I could serve my clients in a way that I felt best represented my vision and my values. And I’m finding myself increasingly in a captive environment. All the while the technology is getting better, the valuations are getting larger, the ability to control both your branding and what that means for your family legacy is increasing.

So over the course of the last 15 to 18 months, that story has just, while it’s been there for a long time, the independent movement was obviously sparked more than, gosh, now 16, 20 years ago in earnest. Now it’s just the passion and the knowledge that advisors are showing up to conversations in recognizing I want more. I want to spend my time where I want to spend it. I want to serve more families. I want to be well-positioned for generational wealth transition. I want to own the enterprise value. I want to build my team and I want the best tech. And that to me is exactly why we’re at the beginning of this J-curve.

Jason Diamond:

Yeah, I think you nailed it. And I agree with you that this notion of independence is not a destination in and of… It’s too broad of a term I think to use. And there are plenty of advisors who either started at one version of independence and need something different now, or to your point, thought they were going independent only to realize perhaps there’s elements of the business that aren’t as independent as they realized. And that’s where I think a firm like RFG to me, it’s not an accident that your firm fills this niche. This was advisor demand driven. Advisors said explicitly and implicitly, “We want to be independent. We want to own our equity. We want to have control over the things we like, but we want a support partner that helps us with all the back office, the middle office, investment management, the flywheel,” as you call it.

Shannon Spotswood:

That’s right.

Jason Diamond:

One other element of your journey to this point that I want to ask about, the succession journey or the journey to CEO, and I’m only asking because it’s somewhat recent, I think it was 2024, so we’re about two years in CEO. For the eight years prior to that, you were president.

Shannon Spotswood:

Yes.

Jason Diamond:

And this dynamic is near and dear for a lot of advisors. This idea you’re the heir apparent, but the date hasn’t happened until it happened. Was that a smooth transition date or did you find yourself, and I hope you can be honest about it, and if not, I understand, but I think this is something that a lot of advisors in their own businesses struggle with. So as somebody who’s gone through a major succession journey in the last two years, I’m curious what your thoughts are.

Shannon Spotswood:

The timing coincided with us bringing on a growth capital partner. So we closed on that partnership with Long Ridge in the fall of 2023, and we really set our sights on how do we bring this capital into the business and invest in our team, invest in our technology, invest in this desire to help independent advisors build their business. And Long Ridge really shares that long-term strategic belief that independence and the corporate RIA model is the ultimate winning model. So we have a lot of room to run there. So entering into that growth partnership with Long Ridge really provided a natural opportunity for that succession conversation to take place and to be able to take the company to the next leg. So we’ve tripled the size of the company over the course of the last two and a half years.

Jason Diamond:

Good for you.

Shannon Spotswood:

And as I said, I feel like we’re just getting started. I always joke we’ve had the longest pre-game warmup in history. In a lot of ways that’s by design. For me, the way that I can sleep at night is knowing that we are waking up as a team in this unified front to walk the walk for our advisors. It is incredibly important to us to honor the promise that we’ve made, whether it’s on tech or talent or transition services or marketing growth. So being able to lean in and deliver that, it takes a long time to build that institutional know-how and to be uncompromising in consistently making hard decisions, whether it’s around talent or the investments that you’re making or how you’re running and growing and building the firm. And so Bobby reached and Long Ridge and all of us reached this point where it was just a very natural way.

And I think it was such a gift that I had such a long warmup, if you will, in the bullpen, running the day-to-day of the business as president, being so close to sweating the details of how we built the foundation, how we run the firm. And then obviously Ed Swenson joined us as president in last fall in October of 2025, having joined our board when we partnered with Long Ridge. So he joined our board in September of ’23, and he and I set up a call every other week. So we just became this incredibly trusted confidant of mine as we made a lot of strategic investments and key strategic decisions in that first 15 to 18 months of our partnership with Long Ridge. So to be able to build and attract the caliber of talent that we have to RFG, I mean, I’m totally biased and talking my own book, but I think we have the best leadership team.

Doug Nelson joined us from Long Ridge as our CFO in November of last year, just bringing that rigor, particularly around capital strategies into our C-suite. So it was the right time to make that transition. And what I would say for founder advisor-led firms, it’s all about what are your growth ambitions? It’s what are your growth ambitions? Without question, when I joined and Bobby and Rick and I set upon this journey to tear the entire company down and build this robust tech stack and be at the forefront as an innovator in that space, that was experience that I had from my 20 years in San Francisco. And Rick had this incredible institutional pedigree having spent 12 years at Bain Capital plus two years at Stanford Business School, complimenting this authenticity that Bobby brought as an advisor, bringing that together. So recognizing as a founder advisor, if you have growth ambitions to 10X your business, it’s going to require that you bring high caliber talent to the table and allow for that room both from an equity participation perspective, but also just from what does the business need as it continues to scale up?

Jason Diamond:

That’s exactly right. And part of this gets back to private equity sometimes gets a bad rep in our space, but the reality is capital from private equity enables a lot of what you’re talking about. And I give you a lot of credit. I mean, you make the half joke about the longest pregame warmup ever, but I think of it as you learned on your own dime and you built all the kinks and ironed out all the kinks prior to having this critical mass of advisors on your platform. And we’ve seen certainly plenty of firms go that route too. So I give you credit for that. I think because we’re on the topic, let’s talk about it, private equity. Positive experience, negative experience, neutral, neither good nor bad. Just give me your… I don’t want to make the episode about the perils-

Shannon Spotswood:

Right.

Jason Diamond:

… and benefits of private equity capital, but just curious what your experience has been.

Shannon Spotswood:

I think this is one of those life lessons. Choose your partners wisely and great things can happen, whether it’s in your marriage or your friendships-

Jason Diamond:

Spouse. Yep.

Shannon Spotswood:

… or your business partners. And Long Ridge found us very serendipitously. I mean, we were probably two years from even contemplating bringing in a growth capital partner. They were introduced to us by a former board member and they were in our offices in January of 2023. And the most important things for us were twofold. Number one, they shared our vision and belief that the corporate RIA independent is the winning model for the industry and for advisors and clients. And number two, who they are as people is very much who we are as people. They’re builders.

Jason Diamond:

Culturally.

Shannon Spotswood:

They have this servant heart growth mindset that they share with us. So I feel incredibly blessed to say they’re amazing partners. And what’s interesting, and I’ll share this very openly, they’re the majority owners of RFG. We were very early in that time of bringing them on. They have always honored the promise that they made to us, which is we run the business. They are a strategic partner. They’re a great thought partner. They are the capital provider, but there has been multiple examples where we have made business decisions where there’s been some heat in the kitchen, in the boardroom, and we’ve felt very strongly about it. So I just couldn’t say enough great things about them. And one thing that I will just share, and I say this because they’ve shared this with me, I have had this incredible personal journey of growth bringing such a deep bench in Long Ridge into the firm.

And that has been certainly challenging at times. Do hard things, get comfortable being uncomfortable. It’s the ultimate definition. But I really think that is something that never gets talked about is what it means in upskilling the caliber of your talent, yourself, how you have to grow and evolve as an individual has been really, I won’t say it’s been easy, but I look back on what I’ve learned over these two years and just feel prepared as a leadership team, how we operate as a team, what is expected of us to be able to deliver and execute for our advisors in this next leg of growth.

Jason Diamond:

I think your marriage analogy is the perfect one, and I’m going to use it. And honestly, in a lot of ways. First of all, marriage is hard, good or bad. It’s hard. Second of all, it’s the ultimate… The institution of marriage is not good or bad. Private equity capital is not good or bad, but your answer is the right one. Pick your partner very wisely. My favorite part of your answer, because it’s the most original, was around a good capital backer, a good partner, whatever you want to call it, pushes you to be better. And I think that you’re surrounding yourself with, by definition, some of the smartest people in the industry, and that can’t be a bad thing. And the proof is in the pudding. The growth trajectory you’ve seen, it’s certainly no accident. I think part of it is tied to your incredible stewardship. You don’t have to answer that. You don’t have to be humble, but I’ll attribute it to you. That brings me to my next question.

Shannon Spotswood:

I do have to say really quickly.

Jason Diamond:

Please do.

Shannon Spotswood:

I will be celebrating my 27th wedding anniversary in October. So yeah, pick your partners.

Jason Diamond:

Congrats. And I feel equally blessed, I assume as you do. I have a great partner, I’ll say. I don’t know if she’s listening right now, but she’s a great spouse. What I was going to say though, good segue, I think there’s been more in recent years, but not a ton certainly of female C-suite wealth management executives. How do you feel about your role? Do you feel an increased burden? Is it an honor to you? Is it something that you don’t think much about at all? I’m curious what your thoughts are.

Shannon Spotswood:

I feel immense gratitude. I mean, just in general, leading RFG and locking arms with our team and our advisors is, I mean, a gift of a lifetime. I was incredibly fortunate to not just have mentors during my 20 years in San Francisco, but to have true sponsors. Whether it was the first hedge fund I worked at, I took that job because it was a female portfolio manager and at the time one of the only in the country. And she really opened up her heart to me and poured into me. And then 10 years at Symphony, the founding partners of Symphony, they dropped me into the deep end of the pool and gave me a lot of rope to make a lot of mistakes and continued to invest. So I have this foundation from which to build and to lead and to be ready for this role.

I couldn’t do any of this without my partners. Rick and I have been partners for more than 10 years. It really does take a village in the same way that it takes a village to raise your family. It takes a village to find the courage and the strength to lead in a way that really honors the gravity of the mission. But I’ll tell you this. One, I knew I wanted to work on Wall Street from a very young age, so I chose this. I knew what I was getting into, that it was a male-dominated industry. I have made particularly, this is one of the unique facets of the wealth management business, we have phenomenal both male and female talent, and I have made the strongest female relationships on this side of the business as compared to the institutional side of the business. So I think there is a richness to our side of the industry that doesn’t get enough air cover.

There are just phenomenal leaders, and I think increasingly so, we’re seeing more women stay in the game and raise into positions within the C-suite and leading these firms. I will tell you one thing in 2019, and I really give a lot of credit to Bobby for this in coaching me, is I was raised by wolves on Wall Street without question. I sat on a trade desk, I was completely comfortable with compartmentalizing emotion, and I made it a mission to develop intentionally my emotional intelligence. And that truly unlocked everything for me, and I think plays such a huge part of who I want to be and who I challenge myself to be as a leader.

And so it’s funny when I get the question asked of me about being a female CEO, because I think that’s what people feel must be like came very intuitively to me, but I had to learn it. I had 20 plus years of being able to run with boys and I needed to develop that skill. And it is a skill that I challenge myself on a daily to continue to lean into. And I think it is increasingly important both for men and women who aspire to leadership to hone the strategic and execution alongside that emotional intelligence.

Jason Diamond:

Great answer. And I think you know I admire a lot about you, but it’s certainly one of the things I admire most about you is over the last couple years in particular you’ve been a real beacon of positivity, of empowerment in that regard. You’re active on socials, you’re active at industry events, you’re always willing to talk to people. And honestly, that to me is the answer. A lot of people complain about this as a problem, and I want to just take a second to applaud you because I think you and your firm actually do something to at least try and actively solve some of this. And also you mentioned it earlier, but same thing with some of the next gen dynamics. You skew much younger than the average firm on the industry. And I think that too is to your credit around, okay, we’ve identified that we have a major succession problem in our industry. What are we doing to solve that?

Shannon Spotswood:

Absolutely.

Jason Diamond:

Let’s talk about growth a little bit. I agree with your thesis. This space you occupy, no better time to be in it. We’re at the perfect spot on the J-curve. Unfortunately, we are not the only two people to think that. There are also, I think, some other firms. This space has become crowded. What do you think about that? Just the fact that there’s more competition than ever. I mean, my view of it is there are enough quality advisors to go around, but curious what you think.

Shannon Spotswood:

Anytime I find myself wading into the waters of fear and scarcity around this topic, I’m reminded that 67% of the assets still remain within the wirehouse and IBD space. We got lots of room to run. I believe in a mindset of abundance. The data will tell us that the demand for advice is increasing by 30% over the next decade while the number of advisors is decreasing by 1%. So we’ve got, find me another industry where you see a graph that looks like that. On top of that, next gen, which I think this is so fascinating, next gen actually wants more advice when compared to the baby boomers. So baby boomers created our industry, and here we are sitting on $87 trillion worth of generational wealth that’s going to begin to transition. That doesn’t even include all of the wealth that will be monetized through real estate and family-owned businesses.

It is a tsunami. And what is, I think, really interesting is that next gen recognizes the value of their time. I’m sure if I had a conversation, Jason, with you and my husband about how intentional you want to be in terms of showing up for your children and the equal nature of parenting, that alone is changing the way the next gen thinks about both their professions as well as their family life, which means you by default have to hire professionals to do the things that you don’t want to spend the time doing.

Jason Diamond:

Really good point.

Shannon Spotswood:

So we have this incredible convergence that’s happening right now, and it’s coming at a time that technology is finally going to allow us to serve more families more intentionally along that wealth spectrum. So it is like, bring it on. There is more than enough to go around. We are in an era of abundance. And what I worry the most about, and this, it’s like climb up on the soapbox and let’s roll, about independence because I see and have so many conversations with advisors where they have been willing to accept such a compromised service experience that they would never allow to be delivered to their clients. So advisors are delivering this 24-hour concierge, high-touch, deeply thoughtful experience, estate planning, tax planning, financial planning, multi-generational conversations. They’re in it. They’re in the trench. And then they turn around and their service partner is so subpar.

They’re compromising their growth. They’re burying them in compliance and ops and clicks and swivel chair and tech that doesn’t work. So we’re at the very beginning of this bull run for advice. And I think advisors who recognize, I want to serve more families, I want more control over my time, I want to be able to build enterprise value on my personal balance sheet, have room to do it. So I welcome the competition. I think the best way to talk about it is iron sharpens iron. I learn so much from our peers and like, ah, they did this or they did that. How do we think more disruptively, more innovatively? How do we do it differently? So I think there’s a lot of room for all of us. You’re going to be busy, my friend. You’re already sitting there advising the lion’s share of the big deals, and I think you guys are just getting started as well.

Jason Diamond:

Yeah, it certainly feels like a bull market for advice and also I think a bull market for some of the… You allude to an interesting paradox, which is some of the biggest and most sophisticated advisors in the industry have really high-touch impressive service models, but they don’t seem to demand the same in return. I have some thoughts as to why. I think one could just be Kool-Aid drinking, like you don’t know any better and you’ve been there for so long. There’s just so much friction associated with moving a business and fear associated that it’s unless things get really dire or unless I find something that’s better enough or meaningfully better enough, I can gut it out. But the third one that comes to mind is these firms we’re talking about have unequivocally, they do a lot of good, a lot of bad, but unequivocally one of the things they do really well is brand.

Shannon Spotswood:

Yeah.

Jason Diamond:

How do you reconcile that question with a firm that obviously doesn’t have a brand that the average American consumer would know?

Shannon Spotswood:

We take a posture on this that is rooted in an Accenture study that was conducted several years ago, but I think still remains so true today, is that advisors think that the value proposition that their clients are looking for, either it’s that big monobrand that’s advertising at the Super Bowl or the alpha they’re ever able to generate or the portfolio investments. But the clients tell us that what they’re looking for in an advisor is, do you get me? Do you share my values? And do I want to spend time with you outside the office? And that is basically distilled down the way we talk about it is people connect with people. So now more than ever, particularly if you take a big step back and you think about the influencer economy and how brands, big brands, Nike or big consumer brands have really leaned into niche branding.

How do I get my brand into the hands of someone who’s very passionate about it? So advisors who develop their own brand, who have a presence on social, who have a presence in AEO and SEO, who are leaning in and expressing not only their client experience, but their vision and their values through their brand, I actually think as this generational wealth unfolds, that authenticity carries so much more weight than is my name on a football stadium. So it is those three factors. It’s just I’m comfortable. I don’t want ripple. It is friction and fear for sure. And then it’s like that branding is up for grabs because we certainly see one of the most fun parts of advisors joining RFG, this is a big part of what we do is helping them design and develop or reimagine their brand name, their logo, all the rest of it.

Once that creative energy is unlocked and you get to tell your story, your my why, that connective tissue is so powerful with the clients and with the growth that comes from that because I mean, I truly believe people connect with people. They’re looking for that. And I think more so now than ever with AI.

Jason Diamond:

You just took the words out of my mouth. Do you think AI perpetuates that?

Shannon Spotswood:

I think people are craving that. And this is why advisors who are powered by AI without question are going to win. Advisors are not going to be disrupted by AI unless they haven’t made the move to get themselves in a position to be able to leverage the technology, the brand, the talent, the maximizing of their time. But especially with something as important and as personal as money, as you walk through life, I mean, you are at the very beginning. I’m sending, I’ll have all three kids in college. But as you make these critical decisions in your life, whether it’s getting married or starting a business or changing jobs or buying your first house, buying your vacation house, all of these things, you can go right or you can go wrong. And having a trusted partner who really understands you, I actually think that we’re going to see the fees paid for advisors increasing as there is a greater premium placed on, I want deeply personal relationships that are tailor-made for me.

Jason Diamond:

But I assume the flip side of that is you have to do more. You as a firm and you as an advisor have to do more, and you can’t just raise fees with the same service model. So I think what is the corollary of that? What are some of the ancillary growth areas that you do beyond the financial planning and asset management that says, “We’re worth that money you’re going to pay us”?

Shannon Spotswood:

It is, and I love the work that wealth.com is doing here. I mean, the estate planning and tax planning, making that more accessible along that continuum of wealth spectrum, the blurring of the lines between ultra high net worth and high net worth, and then mass affluent is so exciting. Better, more robust planning is good for our industry overall. Obviously there’s a huge amount of demand on the tax side of things, particularly the 1040. It’s easy to find a CPA to do the cool complex stuff. It’s increasingly more challenging for advisors. That’s an area that I know a lot of firms have leaned into. We’re certainly doing a lot of work. But so much of this, Jason, is showing up at the right time for clients with the resources. It’s a really interesting conversation about, yes, you have to do more for your clients, but you don’t have to do more for all your clients at exactly the same time.

Jason Diamond:

That’s well said. The flip side of that is as an advisor, because ultimately the advisors are the ones making this decision. There are a lot of firms, and not even just firms that you would be competitors with, because the reality is you and I understand the industry landscape and where various firms fit in. For many advisors, it’s a long list of various firm names that they’ve heard. So what are some things that you think advisors should be asking a firm like you or a business development person at your firm to suss this out? How does an advisor go about understanding if a platform is empty or is really going to be able to deliver in all these areas?

Shannon Spotswood:

Remember back in the day when the Wall Street Journal used to run have a monkey throw a dart and see if you can beat the pros on stock picking? I love to do that with regards to our advisors. We always tell our prospects, “Throw a dart at any advisor that’s affiliated with RFG and call them. Certainly we can provide a list of advisors who we think you’re going to most align with in terms of what your growth ambitions are or the way you want to run your business or who you are, life stage, all the rest of it.” But I do think that getting that unfiltered experience, the good, the bad, the ugly. We always are like, “Are we perfect? Absolutely not. Do we though immediately want the feedback so that we can iterate to excellence to get better? Absolutely. Get that firsthand testimony.” So that’s number one.

Number two is don’t tell me, show me. There are so many, and it always pulls at my heart because as much as I love to win business and transition advisors, and I think that we’re working certainly at RFG on some really interesting technology that is anchored around removing that friction and fear by speeding up the time that you can make that transition in. And the tech is finally there to allow for this. So I think we’re going to be able to take variable number two and at least make that box a little bit smaller. But if I’m sitting as an advisor, I would want to see the evidence. Show me how you’ve solved the problems that advisors have brought to you. How have you refined your tech stack? How have you invested in your team? How have you made the decisions where the ROI can be measurable and tangible?

And I think too often I’m surprised that advisors get, it’s almost as if they get overwhelmed by the amount of information that they’re taking in trying to compare all these different firms. If I’m ever asked, I’m like, please work with a third-party recruiter. You need someone not only to act as an interpreter, but you need someone to help really keep your top three priorities at the front of your decision-making matrix, because it really is apples to oranges to orangutans and you get decision fatigue. And then advisors end up making this decision that is anchored in like, well, this is the highest payout, and I’m willing to take all of these sacrifices and paper cuts for this highest payout. And that is just such a travesty.

So it’s like, know what you want. What are your top three problems that you’re trying to solve? Talk to advisors that you get to pick just so you can do some secret shopping, and then demand evidence of how the firm, the platform has responded to feedback and gotten better as a result because that will tell you, are they really going to walk the walk or are they just going to talk the talk?

Jason Diamond:

I’m super grateful that you gave specifics there because it’s an easy question to dodge and talk around. So I completely agree. Your first answer, actually all three of those points you just made, but certainly doing name-blind calls, and I say name-blind because advisors worry about confidentiality. I think that’s one of the best and most underrated tools to learn about a firm is advisors now have so many colleagues. There’s been this diaspora of advisors where advisors know advisors everywhere. And that’s a benefit if you wanted to go and just network and have conversations with other advisors on your own. But if you’re worried about confidentiality, there’s certainly the mechanisms, and we do this all the time for advisors to set up name-blind calls. You dial into a conference line, it’s John Smith, and you pick an advisor’s brain and say, “Hey, you moved your book from LPL to RFG, and tell me what that experience was like and what were the positives? Give me all the negatives.”

To your point, you want advisors to ask those questions in advance. It’s better to ask those questions than to end up in the wrong marriage with the advisor.

Shannon Spotswood:

Absolutely. And the other thing is what an easy answer to BS around is tell me who’s a good fit for your firm. And it’s like, “Everyone’s welcome here.”

Jason Diamond:

Everybody. Yeah.

Shannon Spotswood:

It’s just not true. RFG is not a good fit for an advisor who is not open to using technology, who is not interested in outsourcing investment management, who doesn’t want to have a conversation about how are you spending your time and do you want to create enterprise value? Do you want to grow? So it really is important to have that vulnerability and that honesty and the answer to that question.

Jason Diamond:

I love it. We have time for one more. I can’t believe it’s been almost an hour.

Shannon Spotswood:

I know, it flies by.

Jason Diamond:

We speak with plenty of advisors who aren’t considering a move, but I’m interested. I think you have a really nice lens into the industry. What is one thing you wish advisors knew? You have a megaphone to just talk to advisors who maybe are considering change, but maybe aren’t. What’s the questions they should be thinking about? What keeps you up at night? Just what would be your public service announcement?

Shannon Spotswood:

I’m going to focus on the friction and fear because that’s the number one barrier to making a move is PTSD, either first person PTSD or the collective negative experience that the industry has had. It took me 90 days to transition. I got sued by my former firm. I lost all these clients. I didn’t have income. The wise tales of fear are very widely trafficked and widespread. And what I would say to an advisor is everything you want is on the other side of fear.

And I look at all of this data that suggests exactly the opposite, which is you have the relationship with the client. You have the trust with the client. You are the one who they call on Sunday night when they need a shoulder to cry on or sage advice for making a decision. Just believe it with the core of your being because what we see is 99% of assets transition, whether it’s a restrictive transition or you’re taking full data, that the majority of assets are transitioning within 30 days, that this is still a free country, and you can make a move while honoring your contract around non-solicitation, non-competes, and non-associations.

So it is like this fear of holding advisors back is preventing them from realizing and monetizing this enterprise value, but equally as importantly, loving their business. Have fun. This should be fun. We spend the majority of our life at work. And so being able to surround yourself with people who win when you win, with a team who’s aligned and isn’t just drudgery with all their operations compliance headaches that they’re dealing with. Your team deserves to be happy. You deserve to be happy. And that fear factor is holding so many advisors back.

So that’s my advice is that it just doesn’t have to play out that way. And I think not just at RFG, collectively where we are as an independent industry with technology, with the way that AI is changing and our ability to harness data and business intelligence, getting to that point of next best action, how am I spending my time, how am I realizing, what is the blueprint for realizing my growth goals is more tangible now than ever. That’s immediately where I go.

Jason Diamond:

I’ve never been an advisor. I’ve never had a book of business, so I don’t want to minimize the fear, but I will say this. If we speak to advisors, let’s say a year post-transition, by far the number one thing we hear from them is, “I wish I did this sooner.”

Shannon Spotswood:

Wish I did it sooner.

Jason Diamond:

And that to me is the most telling data point there is to your point about fear and getting over it.

Shannon Spotswood:

So I do this exercise all the time with our team as we’re onboarding advisors is I want you to go home and look at your spouse and tell them, “I’m going to leave my job. I have no certainty that everything is going to work out. We might not receive any kind of compensation. Are you cool with that?” Walk that emotional journey. And while there’s plenty obviously that we can do with Capital Solutions to ease the financial fear associated with it, I still think at the baseline, it’s a great exercise to keep everyone very humble. You are asking an advisor to take their life’s work. And someone was sharing this analogy with me the other day and I was like, “Oh my gosh, that’s so good,” which is imagine moving houses. It’s such a hassle packing up moving one house. Now imagine moving 400 households or 1,200 households. It’s a lot, but I always hear the same thing, “I wish I’d done it sooner.”

Jason Diamond:

Thank you for sharing. You had some really sage wisdom that you shared with our audience. I can’t wait to see the next chapter, the continuation of the J-curve. This has been a fantastic episode, Shannon. Thank you.

Shannon Spotswood:

I love being with you, Jason. Thank you so much. We appreciate it.

Mindy Diamond:

As a financial advisor, you hold yourself to the highest standards of integrity, honesty, and credibility. You are successful because you take your professional responsibilities seriously and are dedicated to your clients. But are you living your best business life? Are your goals aligned with your firms or could a better option exist? Should I Stay or Should I Go? is a book written with you in mind. It’s a self-guided journey that walks you through the key steps that we take with our advisor clients. This strategic thought process and roadmap to professional self-discovery is designed to help you ask the right questions and think critically and objectively, whether you’re considering change or not. Learn how to get your copy at diamond-consultants.com/thebook.

Growth Without Compromise: Building Around the Advisor Experience

A conversation with Jason Diamond and Shannon Spotswood, CEO of RFG Advisory.

Jason Diamond:

Welcome to the latest episode of our podcast series for Financial Advisors. Today’s episode is Growth Without Compromise: Building Around the Advisor Experience. It’s a conversation with Shannon Spotswood, the CEO of RFG Advisory. I’m Jason Diamond, and this is the Diamond Podcast for Financial Advisors.

Mindy Diamond:

At Diamond Consultants, we help elite advisors identify the right environment for their businesses to thrive, whether that’s at a wirehouse, boutique, or independent firm. With nearly three decades of experience, we’ve guided thousands of advisors and represented more than a quarter of a trillion dollars in assets transitioned. And each year, one in four advisors managing a billion dollars or more who change firms are our clients. Our process is education-driven and based on building relationships, starting as your strategic partner well before you’re even thinking of a move. To schedule a confidential conversation, call us at 908-879-1002.

Wondering why advisors change firms and where they’re headed? Are transition deals going up or down? Those very questions and more inspired us to create our annual advisor transition report. It’s the award-winning data-driven resource designed for advisors that connects the dots between the motivations around movement and the firm’s appetite for top talent. Arm yourself with the knowledge you need to make smart decisions. Download your copy at diamond-consultants.com/transitionreport.

Jason Diamond:

The right partners make you better. The wrong ones can quietly hold you back. Most conversations about independence focus on platforms as providers of technology, service, or infrastructure. Shannon Spotswood sees them differently. She believes advisors should evaluate a platform the same way they’d evaluate any long-term business partner, by asking whether it will help them build the kind of firm they ultimately want to own. That’s exactly what we explore in this episode. Shannon is the CEO of RFG Advisory, a firm that has grown from a startup into one of the industry’s leading supportive independence platforms. Along the way, she’s developed a unique perspective on what advisors should be looking for beyond economics and technology, and why the right partner can accelerate growth, strengthen culture, and help create a business that’s built to last. It’s a conversation that goes well beyond advisor platforms. We explore why Shannon believes so strongly in growth without compromise, what private equity can look like when the partnership is aligned, why firms shouldn’t try to be everything to everyone, and how advisors can separate marketing promises from meaningful support.

We also spend time on a topic that comes up in nearly every transition conversation my team has with advisors, fear. Shannon shares her perspective on why outdated assumptions about making a move continue to hold advisors back and why asking better questions and demanding evidence instead of promises can fundamentally change the way advisors evaluate every opportunity in front of them. Whether you’re considering independence, evaluating your current platform, or simply thinking about what comes next for your business, I think you’ll find Shannon’s perspective both practical and though-provoking, especially the sage advice in her words, “Don’t tell me, show me.” There’s a lot to take away from this conversation, so let’s get to it. Shannon, thanks so much for joining me. Thrilled to have you here.

Shannon Spotswood:

It’s excellent to be here. I’m really looking forward to it.

Jason Diamond:

Me too. Let’s dive right in. I want to start with your background. You spent 20 years in San Fran as an investment banker, then as a portfolio manager at Symphony Asset Management before even touching the world of wealth management. So what made you walk away from, we’ll call it the institutional world and enter the world of wealth management?

Shannon Spotswood:

It’s a little bit of a circuitous story, but I’m going to take us on the short route. I fell in love with Wall Street as a teenager, so I knew I wanted to work on Wall Street. My dream job was actually the time that I spent at Symphony Asset Management. I was a hedge fund manager for them for six years running a long/short equity fund. I then had three children in three and a half years. The firm was acquired by Nuveen Investments, and we grew very large, and I was on this really interesting trajectory within the institutional investment management world. And somewhat of the unexpected happened to me in 2010, we’d come through the financial crisis. I looked around the room, I had these three young children, and having loved finance since a very early age, I couldn’t crawl on an airplane anymore.

I fell out of love with what was honestly my first love. And I made a pretty radical pivot. I left Symphony, the tallest building at the time in San Francisco, and I partnered with a woman, and we built a luxury children’s clothing company for the next three years. So about as radical of a move as you can make, a $30 billion firm, big team, a tremendous growth ahead of us to upside down boxes of infant cashmere in a garage that flooded when it rained. So I had my startup in a garage moment. And while I was running the children’s clothing company, my husband and I took a big leap of faith and decided to move from San Francisco to Birmingham, Alabama to get closer to family, to raise our kids in the South, and just manifest the life that we wanted.

In the third year of running the kids’ clothing business, we checked every box of our initial business plan, and I turned to my business partner and I was like, “Now what? Should we raise capital? Should we open stores? Should we diversify manufacturing?” And we realized this beautiful little luxury brand that we had created was exactly what it needed to be. And so we restructured the company and I punched out of that. And I spent, really for the first time in my life, about five months in deep contemplation. What was the first hedge fund that I was a part of in San Francisco, my tour of duty through investment banking as an analyst associate and helping them start an M&A group. This incredible decade that I’d spent at Symphony, and then this wild out of left field moment of building a luxury children’s clothing brand. And it had such an epiphany, Jason. And it was this, that I was on the ground floor of all of those businesses. And my aha moment was, oh my gosh, I’m a builder.

What I love more than anything is sitting at the intersection of talent and opportunity and what I think is truly one of life’s greatest gifts, and certainly I think the most fun way to live your professional life, which is building something. So I put my resume together and I titled… It wasn’t even really a job search. It was more, I was new to Birmingham. I wondered if there was anything I could be of service in being a part of building something. So I put that resume together and I titled it Seeking the Intangible. And I was looking for that opportunity of talent and building something bigger than myself. And it was through some networking with my across the street neighbor who went on to become a board member of RFG who thought all I did was sell his wife incredibly expensive clothing who networked me to Bobby White, who’s the founder of RFG.

And in the first 10 minutes of my conversation with Bobby, and I’ll tell you, both of us went into that meeting thinking it was going to be a filler meeting. He was doing a favor for a friend, and I had seen a little bit of the wealth management industry after Nuveen had acquired Symphony and was like, “That’s not really my bag. My jam is more on the institutional side of things.” And 10 minutes into our very first meeting, we both canceled the rest of our day, and we spent the next two and a half hours in his office having a conversation that really started with what if. What if we took RFG, which had been founded in 2003, and at the time was an OSJ with LPL, what if we took that business and we tore it all the way down to the ground? And we rebuilt it from the ground floor up to be a platform that is designed, that is intentionally engineered, to serve independent advisors? What would it look like to be a client experience company first, a technology company second, and a corporate RIA third?

And I’ll tell you, walking out of that meeting, I was like, “This is it. This is it. This is the intangible. This is an opportunity to really build something very special.” And that’s how I found myself sitting in this talking to you today.

Jason Diamond:

Wow. So there’s a lot to unpack there. Thank you for sharing. And you shared it with a degree of vulnerability that I personally, I have a two-year-old and a three-week-old as of this recording. So it resonates with me. I think it resonates with a lot of advisors, people in our, and honestly, probably most industries, the constant pull in multiple different directions. And I love what you called it, seeking the intangible. And it sounds like you didn’t go in with any preconceived notion about… Many of our guests, by the way, that is the case. They walk in saying, “I knew since I was two years old I wanted to be in wealth management. I wanted to help be a steward of client…” And I love that your circuitous route took you a different direction.

I want to talk more about the firm, and we’ll dive in on some of these elements of your background also. But before we do, you mentioned a little bit of, at a high level, what RFG is. Give me a little more context, types of advisors you serve, types of clients you serve. And if you don’t mind, provide some stats around size as well.

Shannon Spotswood:

Absolutely. So we are on a mission to help independent advisors build their business without compromise by driving organic growth to create enterprise value. And I share that because in our mission statement is the passion that links us all together, which is helping independent advisors build what they want to envision for their clients, what they believe is the best representation of their vision and their values. So we are a platform, a full turnkey platform for independent advisors. We talk about our services as a flywheel. There’s a very intentional interdependency from technology to marketing to compliance to talent to investment management to coaching, operations, transition services, and capital solutions. All of it is knit together very thoughtfully in order to be able to deliver to the advisors on our promise to help them operationalize and professionalize their business, to serve their clients and to generate that organic growth, which is what translates into enterprise value.

What is so cool about the RFG advisor community, and I think is really the thread that binds between our teams and our advisors team is this servant heart growth mindset that you find it in every nook and cranny of RFG and certainly within all of our advisor partners. So the advisor profile for us, we do tend to skew a little bit younger. Average age is 45 years old. Organic growth across all of our advisors is north of 10%. So we’re very focused and leaned in on growth. We do have advisors that are lifestyle. We talk about them as lifestyle scaling and enterprise, and they run all along that growth at growth spectrum, depending on what do they want to build in their lives, what is going to help them really realize their dreams? And we’ll talk about this a little bit and just the growth of the firm and what we’ve been building, but we are at $9 billion.

So it’s been a big run in 2026, as I say, 10 years of pre-game warmup to be able to really talk about that level of growth. So just knocking on the door of $10 billion and truly, Jason, I can tell you, I feel like we’re just getting started. I feel like we are just at the beginning of the J-curve as advisors are really realizing that their most valuable asset is their time and the amount of enterprise value that they can create being independent. There’s a lot of different flavors of that. We’ve got some incredibly well-capitalized and very strong competitors, but the collective awareness around this bull market for advice that we’re sitting at the very beginning of is shining such a bright light on what does it mean to be independent? What does it mean to be really supported by a partner who’s all in to help them win? And that’s where we find ourselves. And by design, that’s where we find ourselves.

Jason Diamond:

Yeah, and it’s an exciting time. I completely agree. The space, the vertical you’re in, probably as much or more than any other pocket of the industry. You took the words out of my mouth, the J-curve. I completely agree with the story you’re telling. There’s one component of your background that I do want to ask about, which is many RIAs, platforms, and the like, the leadership team is intentionally ex-advisors in their own right. So I’m curious, do you think of it as a benefit or maybe to what degree is it not a benefit that you have never been an advisor and served clients? I do love the idea that you’re a business builder and you’re helping advisors to build a business. That’s not lost on me, but I’m curious specifically about never having been an advisor.

Shannon Spotswood:

I think it is so critical that we were advisor-founded. What we like to say is we’re advisor-founded and professionally-led. Bobby founded the firm in 2003. We partnered in 2015. Our third partner, Rick Wedell, who’s our chief investment officer, managing partner, joined in 2016. So the three of us really co-founded the version of RFG that is-

Jason Diamond:

The right version.

Shannon Spotswood:

… expressed in the market today. But you’re a hundred percent right to double click on this. And I think it is such an important area for reflection for advisors in terms of where are their greatest skills? Where does their passion lie? And what are they interested in building? That very first day that I met Bobby, his telling of the story is he looked at my resume the morning that we were meant to meet, and he is like, “Well, why would I hire her? She could do my job.” And he often talked about that where you get to this point as an advisor where the business is scaling and growing. And we certainly are seeing this in a lot of the larger teams that we’re talking to and the relationships that we’re beginning to build within the pipeline of these advisors who were attracted to the industry because they wanted to serve clients and find themselves as accidental CEOs, COOs, their chief cook and bottle washer to advisor to all of these C-suite titles.

And it’s not amplifying their natural skillset and it’s not aligned with what is actually their passion for the business. So I give a tremendous amount of credit to Bobby for recognizing more than 10 years ago really what it would take and how he could align team around him and build partnerships around him to be able to maximize the impact that we can have for advisors. So that north star of keeping advisors front and center is truly our, it is woven into our DNA and it is our north star. So we are a client experience company by design. We talk about it all the time, whether it’s how we’re building our team, how we’re thinking about investing in technology, how we’re soliciting feedback for advisors. I always say one of our greatest strengths as an organization is we’re active listeners and then we actually execute on it.

Our best ideas come from our advisors, but you’ve got to have that posture as a firm that everything you do is orienting around how do we help advisors operationalize, professionalize, drive organic growth, and create enterprise value? And you can’t do it sometimes. You’re either all in, chips all in, only winning when your advisors win, and only having that lens of will this benefit the advisor and their team or not. It’s not something that you can just dip your toe in and out of. And I think RFG, having that foundation from which to always build is absolutely critical.

Jason Diamond:

Can I try and paraphrase or synthesize, and you tell me if I get this right? The pitch is something to the effect of, “We are really good at what we do. Let us take all the BS off of your plate so that you can go out and be an advisor. Service your client and prospect.” Do you find that story is resonating more over time? I mean, you’ve been with the firm now long enough to see this kind of cycle of movement towards independence. How has that story evolved over time? Do you find it easier to tell?

Shannon Spotswood:

Oh my gosh, without question. And I would even put a shorter term window on it. I would say in the last 12 to 15 months-

Jason Diamond:

Oh wow.

Shannon Spotswood:

… there has been a collective awakening by advisors, and I think there’s a lot of contributing factors to that. One is obviously as we are all aware, the majority of the industry is now private equity backed. There has been a real focus on the aggregator model, transitioning advisors into a W-2 model. And as that has played out and that financial engineering has translated into some incredible valuations and returns, there has also been simultaneously advisors picking their head up and like, wait a minute, I wanted to get independent so I could serve my clients in a way that I felt best represented my vision and my values. And I’m finding myself increasingly in a captive environment. All the while the technology is getting better, the valuations are getting larger, the ability to control both your branding and what that means for your family legacy is increasing.

So over the course of the last 15 to 18 months, that story has just, while it’s been there for a long time, the independent movement was obviously sparked more than, gosh, now 16, 20 years ago in earnest. Now it’s just the passion and the knowledge that advisors are showing up to conversations in recognizing I want more. I want to spend my time where I want to spend it. I want to serve more families. I want to be well-positioned for generational wealth transition. I want to own the enterprise value. I want to build my team and I want the best tech. And that to me is exactly why we’re at the beginning of this J-curve.

Jason Diamond:

Yeah, I think you nailed it. And I agree with you that this notion of independence is not a destination in and of… It’s too broad of a term I think to use. And there are plenty of advisors who either started at one version of independence and need something different now, or to your point, thought they were going independent only to realize perhaps there’s elements of the business that aren’t as independent as they realized. And that’s where I think a firm like RFG to me, it’s not an accident that your firm fills this niche. This was advisor demand driven. Advisors said explicitly and implicitly, “We want to be independent. We want to own our equity. We want to have control over the things we like, but we want a support partner that helps us with all the back office, the middle office, investment management, the flywheel,” as you call it.

Shannon Spotswood:

That’s right.

Jason Diamond:

One other element of your journey to this point that I want to ask about, the succession journey or the journey to CEO, and I’m only asking because it’s somewhat recent, I think it was 2024, so we’re about two years in CEO. For the eight years prior to that, you were president.

Shannon Spotswood:

Yes.

Jason Diamond:

And this dynamic is near and dear for a lot of advisors. This idea you’re the heir apparent, but the date hasn’t happened until it happened. Was that a smooth transition date or did you find yourself, and I hope you can be honest about it, and if not, I understand, but I think this is something that a lot of advisors in their own businesses struggle with. So as somebody who’s gone through a major succession journey in the last two years, I’m curious what your thoughts are.

Shannon Spotswood:

The timing coincided with us bringing on a growth capital partner. So we closed on that partnership with Long Ridge in the fall of 2023, and we really set our sights on how do we bring this capital into the business and invest in our team, invest in our technology, invest in this desire to help independent advisors build their business. And Long Ridge really shares that long-term strategic belief that independence and the corporate RIA model is the ultimate winning model. So we have a lot of room to run there. So entering into that growth partnership with Long Ridge really provided a natural opportunity for that succession conversation to take place and to be able to take the company to the next leg. So we’ve tripled the size of the company over the course of the last two and a half years.

Jason Diamond:

Good for you.

Shannon Spotswood:

And as I said, I feel like we’re just getting started. I always joke we’ve had the longest pre-game warmup in history. In a lot of ways that’s by design. For me, the way that I can sleep at night is knowing that we are waking up as a team in this unified front to walk the walk for our advisors. It is incredibly important to us to honor the promise that we’ve made, whether it’s on tech or talent or transition services or marketing growth. So being able to lean in and deliver that, it takes a long time to build that institutional know-how and to be uncompromising in consistently making hard decisions, whether it’s around talent or the investments that you’re making or how you’re running and growing and building the firm. And so Bobby reached and Long Ridge and all of us reached this point where it was just a very natural way.

And I think it was such a gift that I had such a long warmup, if you will, in the bullpen, running the day-to-day of the business as president, being so close to sweating the details of how we built the foundation, how we run the firm. And then obviously Ed Swenson joined us as president in last fall in October of 2025, having joined our board when we partnered with Long Ridge. So he joined our board in September of ’23, and he and I set up a call every other week. So we just became this incredibly trusted confidant of mine as we made a lot of strategic investments and key strategic decisions in that first 15 to 18 months of our partnership with Long Ridge. So to be able to build and attract the caliber of talent that we have to RFG, I mean, I’m totally biased and talking my own book, but I think we have the best leadership team.

Doug Nelson joined us from Long Ridge as our CFO in November of last year, just bringing that rigor, particularly around capital strategies into our C-suite. So it was the right time to make that transition. And what I would say for founder advisor-led firms, it’s all about what are your growth ambitions? It’s what are your growth ambitions? Without question, when I joined and Bobby and Rick and I set upon this journey to tear the entire company down and build this robust tech stack and be at the forefront as an innovator in that space, that was experience that I had from my 20 years in San Francisco. And Rick had this incredible institutional pedigree having spent 12 years at Bain Capital plus two years at Stanford Business School, complimenting this authenticity that Bobby brought as an advisor, bringing that together. So recognizing as a founder advisor, if you have growth ambitions to 10X your business, it’s going to require that you bring high caliber talent to the table and allow for that room both from an equity participation perspective, but also just from what does the business need as it continues to scale up?

Jason Diamond:

That’s exactly right. And part of this gets back to private equity sometimes gets a bad rep in our space, but the reality is capital from private equity enables a lot of what you’re talking about. And I give you a lot of credit. I mean, you make the half joke about the longest pregame warmup ever, but I think of it as you learned on your own dime and you built all the kinks and ironed out all the kinks prior to having this critical mass of advisors on your platform. And we’ve seen certainly plenty of firms go that route too. So I give you credit for that. I think because we’re on the topic, let’s talk about it, private equity. Positive experience, negative experience, neutral, neither good nor bad. Just give me your… I don’t want to make the episode about the perils-

Shannon Spotswood:

Right.

Jason Diamond:

… and benefits of private equity capital, but just curious what your experience has been.

Shannon Spotswood:

I think this is one of those life lessons. Choose your partners wisely and great things can happen, whether it’s in your marriage or your friendships-

Jason Diamond:

Spouse. Yep.

Shannon Spotswood:

… or your business partners. And Long Ridge found us very serendipitously. I mean, we were probably two years from even contemplating bringing in a growth capital partner. They were introduced to us by a former board member and they were in our offices in January of 2023. And the most important things for us were twofold. Number one, they shared our vision and belief that the corporate RIA independent is the winning model for the industry and for advisors and clients. And number two, who they are as people is very much who we are as people. They’re builders.

Jason Diamond:

Culturally.

Shannon Spotswood:

They have this servant heart growth mindset that they share with us. So I feel incredibly blessed to say they’re amazing partners. And what’s interesting, and I’ll share this very openly, they’re the majority owners of RFG. We were very early in that time of bringing them on. They have always honored the promise that they made to us, which is we run the business. They are a strategic partner. They’re a great thought partner. They are the capital provider, but there has been multiple examples where we have made business decisions where there’s been some heat in the kitchen, in the boardroom, and we’ve felt very strongly about it. So I just couldn’t say enough great things about them. And one thing that I will just share, and I say this because they’ve shared this with me, I have had this incredible personal journey of growth bringing such a deep bench in Long Ridge into the firm.

And that has been certainly challenging at times. Do hard things, get comfortable being uncomfortable. It’s the ultimate definition. But I really think that is something that never gets talked about is what it means in upskilling the caliber of your talent, yourself, how you have to grow and evolve as an individual has been really, I won’t say it’s been easy, but I look back on what I’ve learned over these two years and just feel prepared as a leadership team, how we operate as a team, what is expected of us to be able to deliver and execute for our advisors in this next leg of growth.

Jason Diamond:

I think your marriage analogy is the perfect one, and I’m going to use it. And honestly, in a lot of ways. First of all, marriage is hard, good or bad. It’s hard. Second of all, it’s the ultimate… The institution of marriage is not good or bad. Private equity capital is not good or bad, but your answer is the right one. Pick your partner very wisely. My favorite part of your answer, because it’s the most original, was around a good capital backer, a good partner, whatever you want to call it, pushes you to be better. And I think that you’re surrounding yourself with, by definition, some of the smartest people in the industry, and that can’t be a bad thing. And the proof is in the pudding. The growth trajectory you’ve seen, it’s certainly no accident. I think part of it is tied to your incredible stewardship. You don’t have to answer that. You don’t have to be humble, but I’ll attribute it to you. That brings me to my next question.

Shannon Spotswood:

I do have to say really quickly.

Jason Diamond:

Please do.

Shannon Spotswood:

I will be celebrating my 27th wedding anniversary in October. So yeah, pick your partners.

Jason Diamond:

Congrats. And I feel equally blessed, I assume as you do. I have a great partner, I’ll say. I don’t know if she’s listening right now, but she’s a great spouse. What I was going to say though, good segue, I think there’s been more in recent years, but not a ton certainly of female C-suite wealth management executives. How do you feel about your role? Do you feel an increased burden? Is it an honor to you? Is it something that you don’t think much about at all? I’m curious what your thoughts are.

Shannon Spotswood:

I feel immense gratitude. I mean, just in general, leading RFG and locking arms with our team and our advisors is, I mean, a gift of a lifetime. I was incredibly fortunate to not just have mentors during my 20 years in San Francisco, but to have true sponsors. Whether it was the first hedge fund I worked at, I took that job because it was a female portfolio manager and at the time one of the only in the country. And she really opened up her heart to me and poured into me. And then 10 years at Symphony, the founding partners of Symphony, they dropped me into the deep end of the pool and gave me a lot of rope to make a lot of mistakes and continued to invest. So I have this foundation from which to build and to lead and to be ready for this role.

I couldn’t do any of this without my partners. Rick and I have been partners for more than 10 years. It really does take a village in the same way that it takes a village to raise your family. It takes a village to find the courage and the strength to lead in a way that really honors the gravity of the mission. But I’ll tell you this. One, I knew I wanted to work on Wall Street from a very young age, so I chose this. I knew what I was getting into, that it was a male-dominated industry. I have made particularly, this is one of the unique facets of the wealth management business, we have phenomenal both male and female talent, and I have made the strongest female relationships on this side of the business as compared to the institutional side of the business. So I think there is a richness to our side of the industry that doesn’t get enough air cover.

There are just phenomenal leaders, and I think increasingly so, we’re seeing more women stay in the game and raise into positions within the C-suite and leading these firms. I will tell you one thing in 2019, and I really give a lot of credit to Bobby for this in coaching me, is I was raised by wolves on Wall Street without question. I sat on a trade desk, I was completely comfortable with compartmentalizing emotion, and I made it a mission to develop intentionally my emotional intelligence. And that truly unlocked everything for me, and I think plays such a huge part of who I want to be and who I challenge myself to be as a leader.

And so it’s funny when I get the question asked of me about being a female CEO, because I think that’s what people feel must be like came very intuitively to me, but I had to learn it. I had 20 plus years of being able to run with boys and I needed to develop that skill. And it is a skill that I challenge myself on a daily to continue to lean into. And I think it is increasingly important both for men and women who aspire to leadership to hone the strategic and execution alongside that emotional intelligence.

Jason Diamond:

Great answer. And I think you know I admire a lot about you, but it’s certainly one of the things I admire most about you is over the last couple years in particular you’ve been a real beacon of positivity, of empowerment in that regard. You’re active on socials, you’re active at industry events, you’re always willing to talk to people. And honestly, that to me is the answer. A lot of people complain about this as a problem, and I want to just take a second to applaud you because I think you and your firm actually do something to at least try and actively solve some of this. And also you mentioned it earlier, but same thing with some of the next gen dynamics. You skew much younger than the average firm on the industry. And I think that too is to your credit around, okay, we’ve identified that we have a major succession problem in our industry. What are we doing to solve that?

Shannon Spotswood:

Absolutely.

Jason Diamond:

Let’s talk about growth a little bit. I agree with your thesis. This space you occupy, no better time to be in it. We’re at the perfect spot on the J-curve. Unfortunately, we are not the only two people to think that. There are also, I think, some other firms. This space has become crowded. What do you think about that? Just the fact that there’s more competition than ever. I mean, my view of it is there are enough quality advisors to go around, but curious what you think.

Shannon Spotswood:

Anytime I find myself wading into the waters of fear and scarcity around this topic, I’m reminded that 67% of the assets still remain within the wirehouse and IBD space. We got lots of room to run. I believe in a mindset of abundance. The data will tell us that the demand for advice is increasing by 30% over the next decade while the number of advisors is decreasing by 1%. So we’ve got, find me another industry where you see a graph that looks like that. On top of that, next gen, which I think this is so fascinating, next gen actually wants more advice when compared to the baby boomers. So baby boomers created our industry, and here we are sitting on $87 trillion worth of generational wealth that’s going to begin to transition. That doesn’t even include all of the wealth that will be monetized through real estate and family-owned businesses.

It is a tsunami. And what is, I think, really interesting is that next gen recognizes the value of their time. I’m sure if I had a conversation, Jason, with you and my husband about how intentional you want to be in terms of showing up for your children and the equal nature of parenting, that alone is changing the way the next gen thinks about both their professions as well as their family life, which means you by default have to hire professionals to do the things that you don’t want to spend the time doing.

Jason Diamond:

Really good point.

Shannon Spotswood:

So we have this incredible convergence that’s happening right now, and it’s coming at a time that technology is finally going to allow us to serve more families more intentionally along that wealth spectrum. So it is like, bring it on. There is more than enough to go around. We are in an era of abundance. And what I worry the most about, and this, it’s like climb up on the soapbox and let’s roll, about independence because I see and have so many conversations with advisors where they have been willing to accept such a compromised service experience that they would never allow to be delivered to their clients. So advisors are delivering this 24-hour concierge, high-touch, deeply thoughtful experience, estate planning, tax planning, financial planning, multi-generational conversations. They’re in it. They’re in the trench. And then they turn around and their service partner is so subpar.

They’re compromising their growth. They’re burying them in compliance and ops and clicks and swivel chair and tech that doesn’t work. So we’re at the very beginning of this bull run for advice. And I think advisors who recognize, I want to serve more families, I want more control over my time, I want to be able to build enterprise value on my personal balance sheet, have room to do it. So I welcome the competition. I think the best way to talk about it is iron sharpens iron. I learn so much from our peers and like, ah, they did this or they did that. How do we think more disruptively, more innovatively? How do we do it differently? So I think there’s a lot of room for all of us. You’re going to be busy, my friend. You’re already sitting there advising the lion’s share of the big deals, and I think you guys are just getting started as well.

Jason Diamond:

Yeah, it certainly feels like a bull market for advice and also I think a bull market for some of the… You allude to an interesting paradox, which is some of the biggest and most sophisticated advisors in the industry have really high-touch impressive service models, but they don’t seem to demand the same in return. I have some thoughts as to why. I think one could just be Kool-Aid drinking, like you don’t know any better and you’ve been there for so long. There’s just so much friction associated with moving a business and fear associated that it’s unless things get really dire or unless I find something that’s better enough or meaningfully better enough, I can gut it out. But the third one that comes to mind is these firms we’re talking about have unequivocally, they do a lot of good, a lot of bad, but unequivocally one of the things they do really well is brand.

Shannon Spotswood:

Yeah.

Jason Diamond:

How do you reconcile that question with a firm that obviously doesn’t have a brand that the average American consumer would know?

Shannon Spotswood:

We take a posture on this that is rooted in an Accenture study that was conducted several years ago, but I think still remains so true today, is that advisors think that the value proposition that their clients are looking for, either it’s that big monobrand that’s advertising at the Super Bowl or the alpha they’re ever able to generate or the portfolio investments. But the clients tell us that what they’re looking for in an advisor is, do you get me? Do you share my values? And do I want to spend time with you outside the office? And that is basically distilled down the way we talk about it is people connect with people. So now more than ever, particularly if you take a big step back and you think about the influencer economy and how brands, big brands, Nike or big consumer brands have really leaned into niche branding.

How do I get my brand into the hands of someone who’s very passionate about it? So advisors who develop their own brand, who have a presence on social, who have a presence in AEO and SEO, who are leaning in and expressing not only their client experience, but their vision and their values through their brand, I actually think as this generational wealth unfolds, that authenticity carries so much more weight than is my name on a football stadium. So it is those three factors. It’s just I’m comfortable. I don’t want ripple. It is friction and fear for sure. And then it’s like that branding is up for grabs because we certainly see one of the most fun parts of advisors joining RFG, this is a big part of what we do is helping them design and develop or reimagine their brand name, their logo, all the rest of it.

Once that creative energy is unlocked and you get to tell your story, your my why, that connective tissue is so powerful with the clients and with the growth that comes from that because I mean, I truly believe people connect with people. They’re looking for that. And I think more so now than ever with AI.

Jason Diamond:

You just took the words out of my mouth. Do you think AI perpetuates that?

Shannon Spotswood:

I think people are craving that. And this is why advisors who are powered by AI without question are going to win. Advisors are not going to be disrupted by AI unless they haven’t made the move to get themselves in a position to be able to leverage the technology, the brand, the talent, the maximizing of their time. But especially with something as important and as personal as money, as you walk through life, I mean, you are at the very beginning. I’m sending, I’ll have all three kids in college. But as you make these critical decisions in your life, whether it’s getting married or starting a business or changing jobs or buying your first house, buying your vacation house, all of these things, you can go right or you can go wrong. And having a trusted partner who really understands you, I actually think that we’re going to see the fees paid for advisors increasing as there is a greater premium placed on, I want deeply personal relationships that are tailor-made for me.

Jason Diamond:

But I assume the flip side of that is you have to do more. You as a firm and you as an advisor have to do more, and you can’t just raise fees with the same service model. So I think what is the corollary of that? What are some of the ancillary growth areas that you do beyond the financial planning and asset management that says, “We’re worth that money you’re going to pay us”?

Shannon Spotswood:

It is, and I love the work that wealth.com is doing here. I mean, the estate planning and tax planning, making that more accessible along that continuum of wealth spectrum, the blurring of the lines between ultra high net worth and high net worth, and then mass affluent is so exciting. Better, more robust planning is good for our industry overall. Obviously there’s a huge amount of demand on the tax side of things, particularly the 1040. It’s easy to find a CPA to do the cool complex stuff. It’s increasingly more challenging for advisors. That’s an area that I know a lot of firms have leaned into. We’re certainly doing a lot of work. But so much of this, Jason, is showing up at the right time for clients with the resources. It’s a really interesting conversation about, yes, you have to do more for your clients, but you don’t have to do more for all your clients at exactly the same time.

Jason Diamond:

That’s well said. The flip side of that is as an advisor, because ultimately the advisors are the ones making this decision. There are a lot of firms, and not even just firms that you would be competitors with, because the reality is you and I understand the industry landscape and where various firms fit in. For many advisors, it’s a long list of various firm names that they’ve heard. So what are some things that you think advisors should be asking a firm like you or a business development person at your firm to suss this out? How does an advisor go about understanding if a platform is empty or is really going to be able to deliver in all these areas?

Shannon Spotswood:

Remember back in the day when the Wall Street Journal used to run have a monkey throw a dart and see if you can beat the pros on stock picking? I love to do that with regards to our advisors. We always tell our prospects, “Throw a dart at any advisor that’s affiliated with RFG and call them. Certainly we can provide a list of advisors who we think you’re going to most align with in terms of what your growth ambitions are or the way you want to run your business or who you are, life stage, all the rest of it.” But I do think that getting that unfiltered experience, the good, the bad, the ugly. We always are like, “Are we perfect? Absolutely not. Do we though immediately want the feedback so that we can iterate to excellence to get better? Absolutely. Get that firsthand testimony.” So that’s number one.

Number two is don’t tell me, show me. There are so many, and it always pulls at my heart because as much as I love to win business and transition advisors, and I think that we’re working certainly at RFG on some really interesting technology that is anchored around removing that friction and fear by speeding up the time that you can make that transition in. And the tech is finally there to allow for this. So I think we’re going to be able to take variable number two and at least make that box a little bit smaller. But if I’m sitting as an advisor, I would want to see the evidence. Show me how you’ve solved the problems that advisors have brought to you. How have you refined your tech stack? How have you invested in your team? How have you made the decisions where the ROI can be measurable and tangible?

And I think too often I’m surprised that advisors get, it’s almost as if they get overwhelmed by the amount of information that they’re taking in trying to compare all these different firms. If I’m ever asked, I’m like, please work with a third-party recruiter. You need someone not only to act as an interpreter, but you need someone to help really keep your top three priorities at the front of your decision-making matrix, because it really is apples to oranges to orangutans and you get decision fatigue. And then advisors end up making this decision that is anchored in like, well, this is the highest payout, and I’m willing to take all of these sacrifices and paper cuts for this highest payout. And that is just such a travesty.

So it’s like, know what you want. What are your top three problems that you’re trying to solve? Talk to advisors that you get to pick just so you can do some secret shopping, and then demand evidence of how the firm, the platform has responded to feedback and gotten better as a result because that will tell you, are they really going to walk the walk or are they just going to talk the talk?

Jason Diamond:

I’m super grateful that you gave specifics there because it’s an easy question to dodge and talk around. So I completely agree. Your first answer, actually all three of those points you just made, but certainly doing name-blind calls, and I say name-blind because advisors worry about confidentiality. I think that’s one of the best and most underrated tools to learn about a firm is advisors now have so many colleagues. There’s been this diaspora of advisors where advisors know advisors everywhere. And that’s a benefit if you wanted to go and just network and have conversations with other advisors on your own. But if you’re worried about confidentiality, there’s certainly the mechanisms, and we do this all the time for advisors to set up name-blind calls. You dial into a conference line, it’s John Smith, and you pick an advisor’s brain and say, “Hey, you moved your book from LPL to RFG, and tell me what that experience was like and what were the positives? Give me all the negatives.”

To your point, you want advisors to ask those questions in advance. It’s better to ask those questions than to end up in the wrong marriage with the advisor.

Shannon Spotswood:

Absolutely. And the other thing is what an easy answer to BS around is tell me who’s a good fit for your firm. And it’s like, “Everyone’s welcome here.”

Jason Diamond:

Everybody. Yeah.

Shannon Spotswood:

It’s just not true. RFG is not a good fit for an advisor who is not open to using technology, who is not interested in outsourcing investment management, who doesn’t want to have a conversation about how are you spending your time and do you want to create enterprise value? Do you want to grow? So it really is important to have that vulnerability and that honesty and the answer to that question.

Jason Diamond:

I love it. We have time for one more. I can’t believe it’s been almost an hour.

Shannon Spotswood:

I know, it flies by.

Jason Diamond:

We speak with plenty of advisors who aren’t considering a move, but I’m interested. I think you have a really nice lens into the industry. What is one thing you wish advisors knew? You have a megaphone to just talk to advisors who maybe are considering change, but maybe aren’t. What’s the questions they should be thinking about? What keeps you up at night? Just what would be your public service announcement?

Shannon Spotswood:

I’m going to focus on the friction and fear because that’s the number one barrier to making a move is PTSD, either first person PTSD or the collective negative experience that the industry has had. It took me 90 days to transition. I got sued by my former firm. I lost all these clients. I didn’t have income. The wise tales of fear are very widely trafficked and widespread. And what I would say to an advisor is everything you want is on the other side of fear.

And I look at all of this data that suggests exactly the opposite, which is you have the relationship with the client. You have the trust with the client. You are the one who they call on Sunday night when they need a shoulder to cry on or sage advice for making a decision. Just believe it with the core of your being because what we see is 99% of assets transition, whether it’s a restrictive transition or you’re taking full data, that the majority of assets are transitioning within 30 days, that this is still a free country, and you can make a move while honoring your contract around non-solicitation, non-competes, and non-associations.

So it is like this fear of holding advisors back is preventing them from realizing and monetizing this enterprise value, but equally as importantly, loving their business. Have fun. This should be fun. We spend the majority of our life at work. And so being able to surround yourself with people who win when you win, with a team who’s aligned and isn’t just drudgery with all their operations compliance headaches that they’re dealing with. Your team deserves to be happy. You deserve to be happy. And that fear factor is holding so many advisors back.

So that’s my advice is that it just doesn’t have to play out that way. And I think not just at RFG, collectively where we are as an independent industry with technology, with the way that AI is changing and our ability to harness data and business intelligence, getting to that point of next best action, how am I spending my time, how am I realizing, what is the blueprint for realizing my growth goals is more tangible now than ever. That’s immediately where I go.

Jason Diamond:

I’ve never been an advisor. I’ve never had a book of business, so I don’t want to minimize the fear, but I will say this. If we speak to advisors, let’s say a year post-transition, by far the number one thing we hear from them is, “I wish I did this sooner.”

Shannon Spotswood:

Wish I did it sooner.

Jason Diamond:

And that to me is the most telling data point there is to your point about fear and getting over it.

Shannon Spotswood:

So I do this exercise all the time with our team as we’re onboarding advisors is I want you to go home and look at your spouse and tell them, “I’m going to leave my job. I have no certainty that everything is going to work out. We might not receive any kind of compensation. Are you cool with that?” Walk that emotional journey. And while there’s plenty obviously that we can do with Capital Solutions to ease the financial fear associated with it, I still think at the baseline, it’s a great exercise to keep everyone very humble. You are asking an advisor to take their life’s work. And someone was sharing this analogy with me the other day and I was like, “Oh my gosh, that’s so good,” which is imagine moving houses. It’s such a hassle packing up moving one house. Now imagine moving 400 households or 1,200 households. It’s a lot, but I always hear the same thing, “I wish I’d done it sooner.”

Jason Diamond:

Thank you for sharing. You had some really sage wisdom that you shared with our audience. I can’t wait to see the next chapter, the continuation of the J-curve. This has been a fantastic episode, Shannon. Thank you.

Shannon Spotswood:

I love being with you, Jason. Thank you so much. We appreciate it.

Mindy Diamond:

As a financial advisor, you hold yourself to the highest standards of integrity, honesty, and credibility. You are successful because you take your professional responsibilities seriously and are dedicated to your clients. But are you living your best business life? Are your goals aligned with your firms or could a better option exist? Should I Stay or Should I Go? is a book written with you in mind. It’s a self-guided journey that walks you through the key steps that we take with our advisor clients. This strategic thought process and roadmap to professional self-discovery is designed to help you ask the right questions and think critically and objectively, whether you’re considering change or not. Learn how to get your copy at diamond-consultants.com/thebook.

Three years after launching his independent RIA, Patrick Larkin merged with Cerity Partners—but not because that was the original plan. He explains how ownership changed the way he viewed enterprise value, optionality, and the future of his business.

Going independent is often viewed as the destination. Patrick Larkin discovered it was just the beginning.

Louis sits down with Patrick, Partner and Practice Leader at Cerity Partners and former founder of Oak Hill Wealth Advisors, to discuss an unconventional journey: leaving Wells Fargo to build an independent RIA, then choosing to merge that business just three years later.

Rather than following a predetermined exit strategy, Patrick shares how ownership fundamentally changed the way he thought about enterprise value. A conversation with a prospective acquirer revealed that buyers weren’t interested in purchasing a book of business—they were looking for a business. That realization reshaped how he invested, hired, delegated, and ultimately positioned his firm for the future.

The conversation from our Build Grow & Transact series also offers a candid look at life after a merger, from evaluating cultural fit and partnership to balancing autonomy with the resources of a larger organization. More broadly, it illustrates how ownership creates optionality—and why the most valuable decision an advisor makes may not be the one they originally envisioned.

After spending nearly 15 years building a successful practice at AG Edwards, Wachovia, and Wells Fargo, Patrick Larkin launched Oak Hill Wealth Advisors in 2022 with a simple objective: build a business on his own terms.

Like many advisors, he expected independence to be the final destination for a long time. But then there was the realization that ownership changes more than economics; it changes perspective.

And it became the beginning of an entirely different way of thinking.

As acquisition inquiries arrived sooner than expected, Patrick realized something that fundamentally changed his strategy. Sophisticated buyers weren’t evaluating his client relationships as a book of business; they were evaluating Oak Hill as an enterprise. That insight shifted his priorities from maximizing short-term profitability to building a business that could thrive beyond its founder.

Just three years after launching, Patrick chose to merge with Cerity Partners—not because he was looking for an exit, but because he believed it strengthened the future for his clients, his team, and his family.

Louis and Patrick explore what led to that decision, how ownership increased the value of his business almost immediately, why he compares independence to an IPO, and what advisors should consider if they hope to create options for the future—even if they don’t yet know what that future looks like.

> Download a transcript of this episode…

Why did Patrick decide to leave Wells Fargo? (11:07)

Patrick explains why growing frustrations around control, firm priorities, and the ability to build his business eventually outweighed the comfort of staying put.

How did going independent immediately change the value of his business? (21:42)

Patrick introduces one of the episode’s biggest ideas: why launching Oak Hill felt like taking a company public and how ownership increased the firm’s value almost overnight.

Why did Patrick sell only three years after becoming independent? (20:03)

An unexpected conversation with a prospective acquirer completely changed how he viewed enterprise value and accelerated his long-term thinking.

What separates a business from a book of business? (21:42)

Patrick discusses why recruiting advisors, delegating client relationships, and investing beyond himself made Oak Hill more attractive to strategic buyers.

Why Cerity Partners? (26:48)

Rather than focusing on valuation, Cerity emphasized culture, partnership, and long-term alignment—qualities Patrick says ultimately mattered most.

What is life actually like after a merger? (37:57)

Patrick offers an unusually candid perspective on autonomy, leadership, and why he says he hasn’t second-guessed the decision once.

https://youtu.be/f7FGLGjBbyo

“The day Oak Hill launched felt like the business had gone public.”

“Potential acquirers weren’t interested in buying a book. They were interested in buying a business.”

“Ownership isn’t simply about control. It’s about creating optionality.”

“The fear of leaving is almost always worse than the actual experience of leaving.”

Patrick explains that independence changed how he viewed enterprise value. After learning what sophisticated buyers were actually looking for, he intentionally built Oak Hill as a business rather than simply managing for annual profitability.

Because ownership immediately transformed the economic value of his practice. Rather than participating in an internal succession model, he owned an independent enterprise that carried substantially greater market value.

Beyond gaining control, he began making decisions through the lens of enterprise value—investing in advisors, systems, and infrastructure that would make the business less dependent on him personally.

Patrick cites the firm’s culture, partnership model, meritocracy, long-term vision, and ability to combine local autonomy with enterprise-level capabilities.

No. The broader lesson is that ownership creates flexibility. Whether an advisor ultimately remains independent or joins another organization, understanding how enterprise value is created can influence decisions from day one.

That independence isn’t simply about leaving a firm. It’s about creating the ability to choose what comes next on your own terms.

Patrick explains that independence changed how he viewed enterprise value. After learning what sophisticated buyers were actually looking for, he intentionally built Oak Hill as a business rather than simply managing for annual profitability.

Because ownership immediately transformed the economic value of his practice. Rather than participating in an internal succession model, he owned an independent enterprise that carried substantially greater market value.

Beyond gaining control, he began making decisions through the lens of enterprise value—investing in advisors, systems, and infrastructure that would make the business less dependent on him personally.

Patrick cites the firm’s culture, partnership model, meritocracy, long-term vision, and ability to combine local autonomy with enterprise-level capabilities.

No. The broader lesson is that ownership creates flexibility. Whether an advisor ultimately remains independent or joins another organization, understanding how enterprise value is created can influence decisions from day one.

That independence isn’t simply about leaving a firm. It’s about creating the ability to choose what comes next on your own terms.

From Start-Up to $31B Behemoth RIA: The Catalysts Behind the Growth of Mega-Firm Cerity Partners

Ownership Matters: What Advisors Need to Know When Evaluating Firms

Top Tips for Setting Your Business Up for Success Years Before a Move

Patrick is a Partner and Practice Leader in the Lansdowne, VA office. He is a member of the Lansdowne Practice, where he works closely with families, foundations, and non-profits to help them define and achieve their financial goals with clarity and confidence.

With a deep specialization in retirement income distribution planning and complex risk and wealth management strategies, Patrick is known for helping clients simplify complicated financial decisions, reduce uncertainty, and build sustainable, long-term plans. His approach emphasizes fiduciary responsibility, transparency, and personalized guidance — ensuring clients always feel informed and empowered.

Prior to joining Cerity Partners, Patrick was the founding member of Oak Hill Wealth Advisors, where he built a highly respected independent advisory practice that earned the trust of families, professionals, and mission-driven organizations across the region. His leadership was instrumental in shaping a client-first culture that continues today.

Patrick’s work is rooted in a passion for long-term relationships — guiding clients not just through markets, but through life’s milestones such as retirement, business transitions, philanthropic planning, and wealth transfer across generations. He takes pride in being both a strategic advisor and a steady partner to the people he serves.

Patrick lives in Bluemont, VA, with his wife Angela, their two children, Paige and Sean, and their Golden Retrievers, Huckleberry and Genoa. Outside of the office, Patrick and his family enjoy an active lifestyle — whether it’s hiking and backpacking on the Appalachian Trail, biking the Great Allegheny Passage, or sailing on the Chesapeake Bay. These experiences reflect his belief in balance, resilience, and enjoying the journey — values he also brings to his work with clients.

NOTE: The views and opinions expressed by the guests on this podcast are their own and do not necessarily reflect the views and opinions of Diamond Consultants. Neither Diamond Consultants nor the guests on this podcast are compensated in any way for their participation.

Build, Grow & Transact: From Breakaway to Transaction in 3 Years

A conversation with Louis Diamond and Patrick Larkin, Partner & Practice Leader at Cerity Partners.     

Louis Diamond:

Welcome to the latest episode of our podcast series for financial advisors. Today’s episode is Build, Grow & Transact: From Breakaway to Transaction in 3 Years. It’s a conversation with Patrick Larkin, Partner and Practice Leader at Cerity Partners. I’m Louis Diamond, and this is The Diamond Podcast for Financial Advisors.

Mindy Diamond:

At Diamond Consultants, we help elite advisors identify the right environment for their businesses to thrive, whether that’s at a wirehouse, boutique, or independent firm. With nearly three decades of experience, we’ve guided thousands of advisors and represented more than a quarter of a trillion dollars in assets transitioned. And each year, one in four advisors managing a billion dollars or more who change firms are our clients. Our process is education-driven and based on building relationships, starting as your strategic partner well before you’re even thinking of a move. To schedule a confidential conversation, call us at 908-879-1002.

Wondering why advisors change firms and where they’re headed? Are transition deals going up or down? Those very questions and more inspired us to create our annual Advisor Transition Report. It’s the award-winning, data-driven resource designed for advisors that connects the dots between the motivations around movement and the firm’s appetite for top talent. Arm yourself with the knowledge you need to make smart decisions. Download your copy at diamond-consultants.com/transitionreport.

Louis Diamond:

Ownership as a way of creating opportunities you can’t always predict. That’s exactly why we created our Build, Grow, and Transact series. Independence isn’t the end of the story. It’s often the beginning of thinking differently about enterprise value, optionality, and what comes next. Today’s guest is Patrick Larkin, Partner and Practice Leader at Cerity Partners, and formerly the founder of Oak Hill Wealth Advisors. Patrick spent nearly 15 years building a successful practice at A.G. Edwards, Wachovia, and eventually Wells Fargo before launching his own independent firm in 2022. Just three years later, he merged that firm into Cerity.

At first glance, that timeline might seem surprisingly short, but as you’ll hear, the merger wasn’t a change in direction. It was the result of seeing his business differently once he owned it. Yet, it’s this perspective that really brings that thought home. Patrick said the day Oak Hill launched felt like the business had gone public because overnight, what had been viewed as a book of business became an enterprise with substantially greater value, some four to five times the value of what it was worth at Wells. And that realization changed the way he invested, the way he hired, and ultimately the way he thought about the future.

Pat and I also talk about something advisors don’t often discuss candidly, what life actually looks like after a merger. How much control do you give up? What changes day to day? How do you know whether you’re joining a partner or simply selling a business? Whether your long-term plan is to remain independent forever or eventually join a larger organization, Patrick’s experience is a reminder that ownership isn’t simply about control. It’s about creating optionality and putting yourself in a position where the next decision is yours to make. So let’s get to it.

Patrick, thanks for coming on our show today.

Patrick Larkin:

Oh, my pleasure. Nice to meet you, Louis.

Louis Diamond:

You too. So let’s start off basically how we start every interview. Tell us about yourself, your background, and how you found your way into our industry in the first place.

Patrick Larkin:

Yeah, thank you for asking. I knew I always wanted to be a financial advisor. That part really wasn’t in question, but upon graduating college and being a 22-year-old, I knew that it was probably not practical to walk in and start advising people my parents’ age with their life savings. Probably wasn’t going to be a recipe for success. So I took a quick tour through the pharmaceutical industry first, which ended up being unexpectedly valuable. My employers there pushed me to think like an entrepreneur and within our territories. And honestly, that mindset never left me. It shaped how I built everything that came after. Eventually, an opportunity presented itself in Loudoun County, Virginia in Northern Virginia, and I became an FA trainee with A.G. Edwards, absolutely fantastic firm to start my career.

Now, what drew me to this career was pretty simple. I felt like it was one of the professions that we had an opportunity to do so much good for others while simultaneously also doing well for yourself, and those two things aren’t in conflict. I also really loved the idea that in this profession there was no hiding. You don’t get paid to show up. You get paid for what you actually do. And perhaps for me, what was most important, I loved the weight of responsibility. I loved earning people’s trust. I loved the idea of deserving, being deserving of their trust, and being a steward of what they’ve worked a lifetime to build. I never took that lightly, and I still don’t.

Louis Diamond:

That’s amazing. Yeah, I mean, the number of people I’ve heard, you talked so fondly about A.G. Edwards and there’s a bunch of other firms that have since been absorbed or emerged that are like the regional firms of old. So not surprised to hear you loved it. A.G. Edwards, obviously, became Wells Fargo Advisors or was acquired or merged with Wells Fargo. So I know you’re at Wells and A.G. Edwards until 2022. So give us a quick version. How’d you build your practice from the pharma world into being in FA?

Patrick Larkin:

Yeah, so as I started with A.G. Edwards, I came in at really just the perfect time. It was towards the end of the financial crisis. And I built the business the old-fashioned way with a lot of cold calling and eventually did some dinner seminars, which I can tell you is a very expensive way to learn how to speak in front of a room. But I made some progress, and I was also in a great office, small enough that some of the advisors there would hand off some of the smaller accounts that they weren’t interested in working with, and got an opportunity to get a lot of reps in working with real life clients and individuals. I knew early on I didn’t have enough talent to win on talent alone, so I made up for it and compensated for that with really hard work.

The real turning point came for me when A.G. Edwards was first acquired by Wachovia Securities, and that was about five years into my career. And at that point, my branch manager, who was eyeing retirement, asked me to step in as her partner, and that changed everything. We eventually moved over to a Wachovia Securities office, another really great local office in Loudoun County, Virginia. And from that office, I worked on and became a CIMA, a CFP, worked with the clients, built a business through referrals. And I found at that point in my career when I would go to a meeting with Wachovia, eventually Wells Fargo, as a young 30-year-old, I would look around the room often and realize that I was the youngest person in the room.

The funny thing was 10 years later, I would go into that same room and I’d look around and I still was the youngest guy in that room. And those demographics in our industry, and when I came into our industry, ultimately led that office that I worked in with Wells Fargo Advisors, I eventually was the recipient and party to five different succession plans-

Louis Diamond:

Wow.

Patrick Larkin:

… at Wells Fargo Advisors. I hoped that I had built a reputation as somebody that these other advisors would entrust with their clients. And over that time period, really, I would say professionally, one of my accomplishments I’m most proud of is all five of those retired advisors that I used to work with, who had an opportunity to see me work with clients, all became clients of mine, I still continue to work with. And it’s professionally just one of the greatest honors that I’ve ever had.

Louis Diamond:

I mean, that’s a large number of advisors you helped sunset, but I would agree it’s the ultimate proof of concept that they not only trusted you with their clients and their life’s work, but now also with their family’s wealth. So I like that, kind of the full life cycle there. So I’m curious, though, you stayed at Wells through a really turbulent time through the fake bank scandal. There’s a lot of attrition. I mean, obviously, they’re still a powerhouse to this day, but what kept you at Wells for as long as it did before you left in 2022?

Patrick Larkin:

You described it as a turbulent time. Pretty turbulent might be an understatement. Even before Wells, the transition to Wells, Wachovia Bank had been the first company that we transitioned to from A.G. Edwards. And we, of course, went through the financial crisis during that time period and handholding our clients and helping them get through that time period and dealing with concerns that we shouldn’t really have to be prepared with. “Is my money safe? It’s not what’s happening to the market, but is my money safe in your institution?” But once things stabilized, I found real purpose in partnering with some of the retiring advisors and opportunities that came up. It was a really wonderful climate and atmosphere in our local office. It was really a family-like atmosphere, and I still had a lot to learn. And all those advisors that I partnered with, I’ve joked I’ve never had an original idea in my entire life.

I stole all my good ideas from them. And some of them were really ahead of their time, and I learned, adopted, and built my own philosophies by working closely with them. Ultimately, by the time I left Wells Fargo, I was finishing up the fifth sunset program and had only made my way halfway through the sunset before the opportunity presented itself to create my own practice.

Louis Diamond:

So I’m curious, when did you first seriously start thinking about leaving and what really tipped the scales for you? What was the proverbial straw that broke the camel’s back?

Patrick Larkin:

Yeah, it really was a number of small items and ultimately one big one. But for a long time, I’d been content, but as I tried to grow the business beyond what I could do individually, I felt like I kept running into walls. There were it felt like limitations on how I could build out my team and structure the practice the way I envisioned it. Additionally, there were some new policies that also started to bother me. One of them was the platform advisory fee, which in my eyes was less about client transparency and more about replacing a declining revenue source on the firm’s balance sheet. And after dealing with clients and helping them through the bank scandal at the firm, I was concerned that this would come back and hurt me and the relationships that I had with my clients. Incidentally, I just recently onboarded a new client that transferred to us. And for them, looking at their statement, identifying this platform advisory fee-

Louis Diamond:

Oh boy.

Patrick Larkin:

… was the last straw for them before they moved about 15 million of assets to us. Also, I thought I would be I would be a better allocator of resources than Wells Fargo. Wells Fargo retained about half of the revenue that I earned for the business.

They seemed to think that the best allocation of that money was additional middle management. Whereas, I thought investment in technology, investment in additional personnel, and an investment in marketing were best places to continue to build out my vision. The final straw, and really a thing that crystallized everything for me was when I read a book in 2021 called The Infinite Game, a book written by Simon Sinek. Chapter eight, the title is Ethical Fading. And it uses the Wells Fargo bank scandal as a case study in what happens when a firm loses its moral compass. I read the chapter and thought, “There it is, I have to do something.” That was really the final push I needed.

I mentioned earlier I was very fortunate to start my career with a company called A.G. Edwards, a regional brokerage firm. And while I was at A.G. Edwards, there was a research report that came out on A.G. Edwards as a company. And I’m going to paraphrase a little bit on what was said in that report, but ultimately there was a line in there, and it was a criticism, but I took it as a huge positive as being an employee there. The line said, “While management does not necessarily say it, we believe the client is put ahead of the shareholder.” And that was something I was very proud of. And I just, upon reflecting on it, felt confident those were words that I never was going to see go to print about Wells Fargo.

Louis Diamond:

So you left Wells in 2022 and founded Oak Hill Wealth Partners in Lansdowne, Virginia. Walk us through that decision. Why go independent rather than going to another firm?

Patrick Larkin:

I really thought moving to another firm, the things that I had grown frustrated with at Wells Fargo Advisors, I would also find at another wirehouse firm. I was ready, and honestly, the simple answer is I thought I could do better. And I wanted control after having what I felt like was very little control. I had grown frustrated with others making important decisions, and I wanted an opportunity to grab the reins and make decisions on my own. I believe at that time, the future of wealth management was going to be built around fiduciary advice, and I didn’t want to watch that from the sidelines anymore. I was watching what was happening in the industry. And as we were trying to hire new advisors, reaching out to college graduates who were studying CFP programs, identified that they were more inclined to want to start employment with an RIA than a wirehouse.

What made the timing work really well was Wells Fargo had actually introduced a program to help advisors in the private client group spin off and establish their own RIAs. Now, whenever I tell this to another advisor, particularly ones that are wirehouses, they can’t understand it. And quite frankly, I don’t understand why they helped us do it, but we were about the 30th practice that they helped us through this process and they provided real support. They hired consultants, made vendor recommendations, even referrals to financing so I could pay off my last succession plan before I left. The only really upside for Wells Fargo was that the ask was that we continue to use First Clearing as the custodian. And one of the downsides for me was I was going to leave all of my deferred comp behind with Wells Fargo.

Now, all clients had to do to join me was sign a positive consent. And on May 9th, 2020, we turned on our computers in our new office and our clients were already there. That same day, we launched and started a relationship with Charles Schwab. And it was so exciting to be able to start shopping for what I thought was the best FinTech, really feeling like I was stuck with proprietary tools that Wells Fargo advisors had offered. I felt like I was a kid in a candy store. And if there was a cool tool that I identified that would help us serve our clients better, I was all in and I was buying it. I really feel that some of the technology that Oak Hill eventually bought into and some of the tools we’re using now are going to take years and years before they eventually trickle down to where the wirehouses are, if ever.

Louis Diamond:

Interesting. So it was really it was for the most part an internal move from one-

Patrick Larkin:

It was-

Louis Diamond:

… channel to the other.

Patrick Larkin:

… it was an internal move, but there was no requirement to stay at First Clearing. As a fiduciary, they couldn’t make those demands. And again, they helped us with the financing, which is really unusual that they helped us secure a loan so I could pay off the last retiring advisor. It’s really unusual that a bank will loan money where there is no business at the time, but because of previous experience that financial institution had working with Wells, they helped us facilitate the transaction. And the program is still in place at Wells Fargo, which is absolutely amazing to me after the experience that I’ve just had myself.

Louis Diamond:

Yeah, it’s interesting. I mean, does it cannibalize a more profitable revenue source? Sure. But if the alternative was all the assets go to Schwab or Fidelity, to me, honestly, it’s smart. I think they played the long game by not being adversarial on it.

Patrick Larkin:

I think they played a long game and they took the philosophy, and I think they use it as a recruiting tool that if you love them, set them free. And that’s exactly what they did.

Louis Diamond:

So for the rest of the episode, I want to talk about your eventual, and not that long period of time, transaction or decision to merge Oak Hill with Cerity Partners. This is our Build, Grow, Transact subseries. And I was really struck by your story because you were three years or so into running Oak Hill, and then your merger with Cerity Partners, an amazing RIA closed. That’s a fairly short runway. Usually when I see folks go independent for the first time, it’s 10, 15, 20 years, maybe never, that they decide to merge or sell. I’m curious to understand your thinking about the transaction. Were you looking to do something? Or was it just like right place, right time and the opportunity presented itself?

Patrick Larkin:

I had started Oak Hill with the intent of eventually down the road, much closer to retirement, looking for a partner. The opportunity and what I learned early on helped change that idea and philosophy, and I adapted and made modifications to take advantage of it.

Louis Diamond:

Interesting. So you weren’t necessarily planning on selling or merging the business, it just kind of circumstances happened the way they did?

Patrick Larkin:

Yeah. When we started Oak Hill Wealth Advisors, it was a really pretty short period of time before we started getting calls from larger national RIAs about potential acquisition, much sooner than I expected. Early on, I just brushed them off, but about a year in, I took one of those calls and it really just opened my eyes up. I realized for the first time this small firm, this little practice actually had some real value, way more than I’d given it credit for.

That first call, that first exploration didn’t go anywhere. It wasn’t a good fit. But what it gave me was a much clearer picture of what the serious acquirers were actually looking for. And that changed decisions I made at Oak Hill going forward. I really at that point stopped trying to optimize for near-term profit and really thought of my business as a business and started building towards enterprise value, sometimes at the cost of short-term income. And that turned out to be exactly the right call.

Louis Diamond:

That’s such an interesting perspective. Let’s double-click into that concept. So it sounds almost counterintuitive that if you kind of had this light bulb moment that like, “Okay, maybe I want to transact my business sooner than I initially thought.” I think most people would say, “Let’s become lean and mean. Let’s become as profitable as possible so my EBITDA’s higher.” But you took the different approach. What were the decisions you did to invest more in enterprise value rather than current cash flow?

Patrick Larkin:

A true business is one that doesn’t need me to be here every day to operate. And when we left Wells Fargo Advisors, it was myself and one other advisor that created Oak Hill Wealth Advisors. I was responsible for about 95% of the assets and revenue. And one of the more significant investments we made is in additional advisors. I recruited three new advisors, all CFPs, to join Oak Hill Wealth Advisors. Whereas, before I had been largely managing all the relationships myself. For someone that kind of grew up in the regional wirehouse space, it’s pretty counterintuitive to start moving relationships away from you onto other advisors. You’re trained and built to create a moat around your relationships, and realized that the potential acquirers are not interested, at least the ones I was interested in, weren’t interested in buying a book. They were interested in buying a business.

And that just meant every decision we made going forward was not profit-driven, but how can I increase the value of the business? So after that first call, I knew I probably would be looking to move forward with a transaction sooner as opposed to the end of retirement. That information that I got on that first call helped me realize that when Oak Hill Wealth Advisors opened its doors on May 9th, 2022, we effectively had an IPO. I had great familiarity with how the succession plans at Wells Fargo Advisors worked. And on that day that we opened our practice, the value of my business jumped to be four to five times the value of it in a succession plan at Wells Fargo Advisors.

Now, I knew going forward that I was going to be able to increase revenue. I was going to be able to increase EBITDA. I was going to potentially have some benefits from a market tailwind. I knew the multiples of EBITDA that the firms use may fluctuate, but the biggest change by far occurred leaving the wirehouse and having the value of my business grow four to fivefold in that same day. So what I really focused on was making sure that I was going to, when I was ready to start looking again after I had worked on improving the practice, really was going to look for a firm that was going to be a good cultural fit for both my clients, my team, and myself.

Louis Diamond:

That’s such a cool perspective. I’ve never heard anyone say that the day we launched your independent business was like an IPO. But honestly, it’s so true. You’re planting a flag in the ground that like, “Here is real value. This is value that we’ve created that we own rather than it being a book of business and a W-2 paycheck.” And it’s a fascinating perspective.

Patrick Larkin:

Yep. It really is amazing that the value changed that much on one day and the future value changes. Looking at the equity that I owned in Oak Hill Wealth Advisors, it made sense to consider is there a better way to take some risk off the table for myself and my family and diversify some of the equity that I had in Oak Hill Wealth Advisors with a larger enterprise?

Louis Diamond:

It makes complete sense. Obviously, everyone would sign up for 4 to 5X increase in value.

Patrick Larkin:

Sure.

Louis Diamond:

That’s not the reason most people go independent, but it’s important to know. And also, what I really liked about what you shared is I think a really valuable learning for anyone is those calls come in, whether it’s from annoying people like me or from an acquirer, from a firm, they’re not all noise. You took it as an opportunity to learn. Even though that first person who called wasn’t the right fit, it crystallized something in your mind and it let you make proactive decisions that ultimately paid off in spades when it came time to sign the dotted line for your transaction with Cerity. So I think it’s brilliant. And it’s very big picture, big-business-owner-type stuff that I think a lot of people will just filter out because it’s annoying and I’m young, I’m not looking to sell, but that was the journey.

Patrick Larkin:

Yeah, that first call changed my opinion about timing of when to move forward with a partnership. Originally, I thought this would be something at the end of retirement. The timing of doing so sooner seemed a lot more appealing after having that conversation and realizing what we had actually built.

Louis Diamond:

Amazing. So ultimately you decided to merge with Cerity Partners. We’ve had Kurt Miscinski from Cerity Partners on the show. They’re a real heavyweight within the RIA world. Most recently, they were valued at $8 billion in a recap, and it’s a very impressive firm. What specifically drew you to Cerity versus other potential buyers? Like you said, you got a lot of calls.

Patrick Larkin:

After that first call, I just got to work and focused on continuing to take care of our clients, building a team, adding new advisors, being a mentor to those advisors. But at the same time, we were being approached fairly regularly by that point. And I had a pretty good system for quickly deciding whether something was worth a second look, and most weren’t. But about a year ago, one of the national RIAs caught my attention and I started having conversations with them. And once I had progressed with them, I though, “You know what? If I’m giving this consideration, I really need to cast a wider net.” So I reached out to other RIAs that I had looked at and admired and been keeping an eye on. And ultimately, my longtime business coach, Barbara Kay, suggested I talk with Cerity Partners, a company that one of her other clients had just recently joined.

And from the very first call, I could tell something was different. And I talked to many different companies. Cerity Partners, and an individual I spoke with, Geoff Newman, they weren’t leading with valuation formulas or deal structure. They were asking questions about my clients, my team, and how I actually ran the practice. They had a very defined process for identifying partners who were genuinely compatible, not just advisors with books that were transferable. And that distinction mattered greatly to me. They also offered really, in my opinion, the right balance of support and still having some autonomy. And their aspiration to deliver consistent standard of care to clients, whether they be in California or Virginia, so that those individuals get the same quality of experience, resonated with how I was already running things within my practice. That combination of support and autonomy, I really liked the idea of continuing to have oversight over my local practice, over our practice, which included the budget, salaries, and bonuses.

It more than anybody else felt like a partnership and not a buyout. And I really appreciate it during that first call, Cerity was the only company that talked about a hundred-year plan. It was amazing to me to hear what their thoughts were. Most of the other firms I spoke with talked about valuations. And very quickly in the process, I found myself on a Zoom call with a Patagonia fleece vest-wearing private equity rep walking me through a valuation. And it was efficient, but it was not a cultural fit for me. And the infrastructure behind us and the combination of autonomy is really harder to find than most people think. As I progressed with Cerity, I remember early on in the process thinking to myself, “My God, I hope they want me, I hope they want me,” because I could tell I’m a very process-driven person They had a process with the way they brought me on board.

And ultimately, we had a due diligence trip set up to go to one of their larger offices where I met with one of their leaders, Claire O’Keefe, part of their practice development, and had an opportunity to meet with different leaders within the firm and really get my arms wrapped around the potential that they had. Just the quality of the people I encountered through the whole process just kept reinforcing the decision. And by the time we got to the finish line, it didn’t feel like a transaction. It felt like I was joining something that I was excited to be part of. So just a little bit more about what attracted me to Cerity, their culture is just phenomenal. Cerity Partners uses the word “meritocracy” and they actually mean it. Ownership and influence here track your contribution, not your tenure or how well you play the politics.

I just attended my first partner meeting in April, and without exaggeration, it was the most extraordinary professional meeting I’ve attended in my 25-year career. During the meeting, there was open debate about the direction of the firm, and every voice in the room carried weight. You could feel the culture. And that type of culture is built over years. You can’t fake it. Everyone in the room it felt like was rowing in the same direction. And by the time the meeting was over, I was so excited to get back to my team and tell them about what I had just witnessed, I wasn’t looking for the exit. I was looking for the brick wall to run through. I was so excited. And every once in a while I wonder having spent so much time in the wirehouse spaces, the bar just set really low for me when I talked to some of my other colleagues that have been independent for a long time.

But it was just an absolutely amazing experience. And I do want to just add, one of the last really important things to me about Cerity Partners is I’ve been very fortunate with my career and in this profession. And part of my goal over the rest of my career is to have a legacy. And my legacy currently exists with the families I’ve advised and the team that I’ve built and have served and led. But Cerity Partners is helping me achieve even a greater legacy in our industry with our shared long-term goals. During my first meeting, they talked about their hundred-year vision of being a worldwide employee-owned professional services firm. And currently, and this is very exciting, the employees are the largest shareholder of the firm.

No one else I talked to talked about their long-term goals like this, and it’s a vision I believe in. I want to contribute to help to see it accomplished. And one day when I do retire, I want to look back and see how I contribute it to a company that I believe is going to change the direction of professional wealth management.

Louis Diamond:

Wow.

Patrick Larkin:

My partnership with Cerity Partners is going to make that a reality. It’s just an amazing place. Yeah, very happy.

Louis Diamond:

Honestly, you can’t fake that type of enthusiasm. It sounds like-

Patrick Larkin:

It’s not-

Louis Diamond:

… you entered into a transaction, which is it’s like jumping into the deep end. How do you sort through what’s the sales process versus what’s real? How much of this is actually going to translate to my life? But hearing you not that long after the transaction, you still feel that and it’s very cool. In the press release I read, you cited estate planning, private markets access, and cross-border planning as key reasons for the merger. Can you talk about what it was about those? Maybe-

Patrick Larkin:

Yeah.

Louis Diamond:

… anything else that was missed?

Patrick Larkin:

Yeah.

Louis Diamond:

And were those not things that you felt like you could have delivered yourself as a standalone?

Patrick Larkin:

I thought that they were going to help me be able to be more effective in delivering those, but they weren’t the complete picture. The capabilities that we cited in the release were genuine gaps I wanted to fill and have available for clients and be able to prospect and go after new additional clients. But being fully honest, there were also deeper drivers. One was my team. Sometimes we get emotional about this. Being someone who’s trusted is really important to me, and that’s something I hold in high priority. There are people that followed me out of Wells Fargo to join me. One of my client associates had delayed her retirement so that she could join me and help us launch for the first three months. One of my other client associates has been with me close to 15 years. These are people that trusted me to do the right thing and to make sure that I wasn’t walking them off the plank.

Being able to join Cerity Partners and give them a future that didn’t hinge entirely on my personal longevity was a huge relief. And Cerity Partners is an ownership culture. I’m so happy to say today that every single individual on my team in our practice in Lansdowne is now either an equity owner in Cerity Partners or very shortly will be an equity-

Louis Diamond:

So cool.

Patrick Larkin:

… equity owner. So they have a stake as well in what they’re building. It matters. My youngest client associate noticed how much it costs to send to FedEx. And he goes, “Now that I’m an owner, maybe we should rethink about sending regular mail.” Another driver was my family. And I’ve always had the philosophy of trying to prioritize and clients first, team and colleagues, and then my family. And I’ve always made decisions that if I put those others before myself, eventually I’ll be taken care of.

And going through this transaction, it was so generous to my family and provided such security. There was a little bit of guilt that, “Am I doing this for all the right reasons?” But being able to secure my family’s future, converting equity in a three-year-old RIA into a stake of a $8 billion-plus valuation with institutional backing, that was a meaningful moment and I’d be less than honest if I glossed over that. I also really wanted to be part of something larger than myself. And the opportunity to help build a legacy in this business with Cerity Partners really gives me the platform to do that.

Louis Diamond:

Very cool. I can tell that you’re genuine, not just because of the way you sound, the way you’re speaking, but in the very beginning of the episode, you talked about the reason you got into this business was because you thought it gave you the dual purpose of being able to help people, but also being able to enrich yourself or your family. So this answer, it comes full circle. You’re able to accomplish all these goals, which made it the right decision. And I think, look, I say to advisors all the time, “You’re allowed to be greedy, you’re allowed to be selfish as long as the clients are still in the front of your mind as the most important thing.”

There’s nothing wrong with doing better for clients, building a legacy in your case, but also reaping the rewards of all your hard work and labor and also all the risks that you’ve taken over your career. I got to ask you, though, from being an employee of Wells, where you were running your team, for the most part, you can run the business within their guardrails the way you want, to then running an RIA, which is really like you’re fully in control of everything, to now being a partner, but you’re not the one who has the name on the door anymore.

Patrick Larkin:

Right, right.

Louis Diamond:

Well, how do you think about the giving up control and full ownership of your practice versus owning a very small amount of a much larger entity?

Patrick Larkin:

There was such continuity. Oak Hill Wealth Advisors and Cerity Partners were so philosophically aligned that I genuinely never felt like I was giving up anything that I wasn’t glad to let go. My wife joined the business shortly before I left Wells Fargo Advisors. And still to this day, on my drive home from work, I call her up and say, “You’re not going to believe this.” And it’s all a positive, good thing. So Cerity has struck the perfect balance of that autonomy and support combination that I was looking for. So I still have control and a say over the way our practice is managed. Very shortly after the merger, my supervisor came down and met me for the first time, and we went out together after the day had ended. And early in the conversation I said to him, “What can I do to make your life easier?” And he said, “Pat, what can I do to make your life easier?” And that set the tone that still exists to this day.

I almost cried when he said that because that was so different than what I had experienced up to that point. So the collaboration, the way we work together, it’s just absolutely amazing. And not once for a single moment have I second-guessed my decision. And it’s really weird because I’ve now been part of this organization for nearly nine months, and there just has not been one thing that’s occurred where I said, “That’s a disappointment.” It’s just been absolutely amazing every single day.

Louis Diamond:

Very cool. To me, there’s different arcs of when you want to ask people the question of, “Hey, any regrets?” And usually you don’t want to ask them too soon because they’re still going through the transition and integration and growing pains. And you don’t want to ask them too far in the future because you forget about what was life before. To be this short of a duration into this new partnership and to have these feelings, that’s absolutely pretty special. I got two more questions for you, Pat, if you don’t mind.

Patrick Larkin:

Sure.

Louis Diamond:

First one, economically, to me, one of the hardest things for really any advisor to really grapple with or to fully comprehend or make their own is, “I own 100% of the equity in my business. I get to decide when I want to sell in the future. My business is growing 10% per year. I wait to sell until 10 years from now, my business is going to be much bigger and I get to keep all the cash flow. I get to make all the decisions.” That compared to the path that you took, which was take cash off the table, which everyone understands, to, “Now, I own a much smaller piece of a much larger pie.” How would you talk to someone about the financial trade-off between a hundred percent ownership in their business, full control, full discretion over everything, versus becoming a minority equity partner in a larger entity?

Patrick Larkin:

You have to look at the valuation of my business, again, the day that we opened our doors as Oak Hill Wealth Advisors. There was such a massive jump in the value of the business. There was not going to be an opportunity for an appreciation at that level. So then, you have to compare what the growth rate is of Oak Hill Wealth Advisors versus a Cerity Partners. And I’m not embarrassed to say that Cerity Partners is and has been growing at a much faster rate of return. The value of the equity that I have retained in Cerity Partners, my ownership stake, I fully expect by the time I transact that business as I get closer to retirement, that’s going to be worth many times more than whatever opportunity I would have had at Wells Fargo with the valuation they would have provided me.

Nevermind, very important, the tax consequences of a structure like this is all the retiring advisors that I worked with were taxed at their highest marginal rate. I owned a business and we were taxed at long-term capital gains rates. A significant difference in savings in what as the owner we actually realize. So yeah, I feel very comfortable with the ownership that I have and the control and continued opportunity with the meritocracy culture to increase my share of ownership in the company.

Louis Diamond:

Okay, and let’s do one more question here. I’ll pick it back up. So Pat, I think it’s a really cool perspective. It’s almost do your homework, and if you find the right horse and the right jockey that can run faster than you can on your own, that the equity value will compound and grow and appreciate in a faster, more efficient way than what you’re doing on your own, which makes complete sense. It’s the ultimate trade-off. And again, it’s like jumping into the deep end. On the one hand, Oak Hill was all you, right? You control the growth, for better or worse, for the good days, the bad days, the good years, the bad years, versus now your growth is diversified amongst hundreds of partners across M&A, across different lead flow channels, et cetera. It makes complete sense. But honestly, if I were an advisor, I don’t know how I would think about it.

I think it’s all just fact-and-circumstance-based on where I am in my life and who the firm is and what I’m trying to accomplish. But it’s such a cool perspective because usually the playbook that we see, which is why we did this series, is go independent and there’s a long pause until there is a realization of all the value that’s been created. So seeing you do this in a much quicker timeframe, it seems like it was the absolutely right decision. To me, it just is another path, another way that an advisor or a firm is able to think about their future. Any final advice or parting words for someone who is sitting right where you were in 2021 or 2022 thinking about making the leap? And we’ll say a transition in general, or really anything you want to share to wrap our episode here.

Patrick Larkin:

Thank you for having me, and this is a great question. Happy to give a thoughtful answer to it. Before I’d left Wells Fargo Advisors through the program and started Oak Hill Wealth Advisors, I had an opportunity to go through a due diligence process and make sure that this was going to be a right move for me. There was no carrot out there that was obvious. I learned after that first conversation that I had built a practice that had some value to it. I was leaving behind the security of something I knew, leaving behind a significant amount in deferred compensation, and I wanted to make sure I was making the right decision. And through that due diligence process, talked to about five other firms that had recently left Wells Fargo to join this RIA program.

I asked them a lot of different questions about what their experience was. And at every point during those conversations, they all said the same thing at different points. And it sounded like this. They said, “I’m working harder than I ever have before, but I wish I had done this sooner.” So my advice to those people, do it. I know that sounds simple, but I mean it. The fear of leaving is almost always worse than the actual experience of leaving. And I understand the inertia of not leaving and the real apprehension of what was on the other side. But what I found was a version of this profession I genuinely didn’t know was possible.

One where I could do things the right way on my terms for the people I care most about serving. And not every path is going to look like mine. Some advisors should go fully independent and stay there, and that can be an incredible life. But when it comes time to look for a partner, quite frankly, if Cerity Partners is not on your shortlist, you’re making a significant mistake. And I say that not to sell anything, but because I’ve lived the comparison firsthand and there’s simply nothing else like it.

Louis Diamond:

So Pat, it’s been really fun, but I don’t think we’ve had anyone on the eight years or so we’ve been doing this show that’s gone through this type of arc or journey that you have. One of my big takeaways or sticking points that this episode brought for me is by going independent and taking control over your future, you created complete optionality for yourself to do exactly what you wanted to do with your business, even if that was different than what you initially planned. So in your case, it was selling within three years of going independent, but by taking action, being proactive, playing some offense, you made the opportunity happen on your terms and your timeline.

So this has been fun in so many different ways. I loved your comment about how when you went independent, it’s basically like the day of your IPO, the four-to-five-times increase in value versus an internal succession deal, and even just the way to think about getting equity in a larger entity versus running your own plays only. So thank you so much for doing this. This has been fun.

Mindy Diamond:

As a financial advisor, you hold yourself to the highest standards of integrity, honesty, and credibility. You are successful because you take your professional responsibility seriously and are dedicated to your clients. But are you living your best business life? Are your goals aligned with your firm’s or could a better option exist? Should I Stay or Should I Go? Is a book written with you in mind? It’s a self-guided journey that walks you through the key steps that we take with our advisor clients. This strategic thought process and roadmap to professional self-discovery is designed to help you ask the right questions and think critically and objectively, whether you’re considering change or not. Learn how to get your copy at diamond-consultants.com/thebook.

Build, Grow & Transact: From Breakaway to Transaction in 3 Years

A conversation with Louis Diamond and Patrick Larkin, Partner & Practice Leader at Cerity Partners.     

Louis Diamond:

Welcome to the latest episode of our podcast series for financial advisors. Today’s episode is Build, Grow & Transact: From Breakaway to Transaction in 3 Years. It’s a conversation with Patrick Larkin, Partner and Practice Leader at Cerity Partners. I’m Louis Diamond, and this is The Diamond Podcast for Financial Advisors.

Mindy Diamond:

At Diamond Consultants, we help elite advisors identify the right environment for their businesses to thrive, whether that’s at a wirehouse, boutique, or independent firm. With nearly three decades of experience, we’ve guided thousands of advisors and represented more than a quarter of a trillion dollars in assets transitioned. And each year, one in four advisors managing a billion dollars or more who change firms are our clients. Our process is education-driven and based on building relationships, starting as your strategic partner well before you’re even thinking of a move. To schedule a confidential conversation, call us at 908-879-1002.

Wondering why advisors change firms and where they’re headed? Are transition deals going up or down? Those very questions and more inspired us to create our annual Advisor Transition Report. It’s the award-winning, data-driven resource designed for advisors that connects the dots between the motivations around movement and the firm’s appetite for top talent. Arm yourself with the knowledge you need to make smart decisions. Download your copy at diamond-consultants.com/transitionreport.

Louis Diamond:

Ownership as a way of creating opportunities you can’t always predict. That’s exactly why we created our Build, Grow, and Transact series. Independence isn’t the end of the story. It’s often the beginning of thinking differently about enterprise value, optionality, and what comes next. Today’s guest is Patrick Larkin, Partner and Practice Leader at Cerity Partners, and formerly the founder of Oak Hill Wealth Advisors. Patrick spent nearly 15 years building a successful practice at A.G. Edwards, Wachovia, and eventually Wells Fargo before launching his own independent firm in 2022. Just three years later, he merged that firm into Cerity.

At first glance, that timeline might seem surprisingly short, but as you’ll hear, the merger wasn’t a change in direction. It was the result of seeing his business differently once he owned it. Yet, it’s this perspective that really brings that thought home. Patrick said the day Oak Hill launched felt like the business had gone public because overnight, what had been viewed as a book of business became an enterprise with substantially greater value, some four to five times the value of what it was worth at Wells. And that realization changed the way he invested, the way he hired, and ultimately the way he thought about the future.

Pat and I also talk about something advisors don’t often discuss candidly, what life actually looks like after a merger. How much control do you give up? What changes day to day? How do you know whether you’re joining a partner or simply selling a business? Whether your long-term plan is to remain independent forever or eventually join a larger organization, Patrick’s experience is a reminder that ownership isn’t simply about control. It’s about creating optionality and putting yourself in a position where the next decision is yours to make. So let’s get to it.

Patrick, thanks for coming on our show today.

Patrick Larkin:

Oh, my pleasure. Nice to meet you, Louis.

Louis Diamond:

You too. So let’s start off basically how we start every interview. Tell us about yourself, your background, and how you found your way into our industry in the first place.

Patrick Larkin:

Yeah, thank you for asking. I knew I always wanted to be a financial advisor. That part really wasn’t in question, but upon graduating college and being a 22-year-old, I knew that it was probably not practical to walk in and start advising people my parents’ age with their life savings. Probably wasn’t going to be a recipe for success. So I took a quick tour through the pharmaceutical industry first, which ended up being unexpectedly valuable. My employers there pushed me to think like an entrepreneur and within our territories. And honestly, that mindset never left me. It shaped how I built everything that came after. Eventually, an opportunity presented itself in Loudoun County, Virginia in Northern Virginia, and I became an FA trainee with A.G. Edwards, absolutely fantastic firm to start my career.

Now, what drew me to this career was pretty simple. I felt like it was one of the professions that we had an opportunity to do so much good for others while simultaneously also doing well for yourself, and those two things aren’t in conflict. I also really loved the idea that in this profession there was no hiding. You don’t get paid to show up. You get paid for what you actually do. And perhaps for me, what was most important, I loved the weight of responsibility. I loved earning people’s trust. I loved the idea of deserving, being deserving of their trust, and being a steward of what they’ve worked a lifetime to build. I never took that lightly, and I still don’t.

Louis Diamond:

That’s amazing. Yeah, I mean, the number of people I’ve heard, you talked so fondly about A.G. Edwards and there’s a bunch of other firms that have since been absorbed or emerged that are like the regional firms of old. So not surprised to hear you loved it. A.G. Edwards, obviously, became Wells Fargo Advisors or was acquired or merged with Wells Fargo. So I know you’re at Wells and A.G. Edwards until 2022. So give us a quick version. How’d you build your practice from the pharma world into being in FA?

Patrick Larkin:

Yeah, so as I started with A.G. Edwards, I came in at really just the perfect time. It was towards the end of the financial crisis. And I built the business the old-fashioned way with a lot of cold calling and eventually did some dinner seminars, which I can tell you is a very expensive way to learn how to speak in front of a room. But I made some progress, and I was also in a great office, small enough that some of the advisors there would hand off some of the smaller accounts that they weren’t interested in working with, and got an opportunity to get a lot of reps in working with real life clients and individuals. I knew early on I didn’t have enough talent to win on talent alone, so I made up for it and compensated for that with really hard work.

The real turning point came for me when A.G. Edwards was first acquired by Wachovia Securities, and that was about five years into my career. And at that point, my branch manager, who was eyeing retirement, asked me to step in as her partner, and that changed everything. We eventually moved over to a Wachovia Securities office, another really great local office in Loudoun County, Virginia. And from that office, I worked on and became a CIMA, a CFP, worked with the clients, built a business through referrals. And I found at that point in my career when I would go to a meeting with Wachovia, eventually Wells Fargo, as a young 30-year-old, I would look around the room often and realize that I was the youngest person in the room.

The funny thing was 10 years later, I would go into that same room and I’d look around and I still was the youngest guy in that room. And those demographics in our industry, and when I came into our industry, ultimately led that office that I worked in with Wells Fargo Advisors, I eventually was the recipient and party to five different succession plans-

Louis Diamond:

Wow.

Patrick Larkin:

… at Wells Fargo Advisors. I hoped that I had built a reputation as somebody that these other advisors would entrust with their clients. And over that time period, really, I would say professionally, one of my accomplishments I’m most proud of is all five of those retired advisors that I used to work with, who had an opportunity to see me work with clients, all became clients of mine, I still continue to work with. And it’s professionally just one of the greatest honors that I’ve ever had.

Louis Diamond:

I mean, that’s a large number of advisors you helped sunset, but I would agree it’s the ultimate proof of concept that they not only trusted you with their clients and their life’s work, but now also with their family’s wealth. So I like that, kind of the full life cycle there. So I’m curious, though, you stayed at Wells through a really turbulent time through the fake bank scandal. There’s a lot of attrition. I mean, obviously, they’re still a powerhouse to this day, but what kept you at Wells for as long as it did before you left in 2022?

Patrick Larkin:

You described it as a turbulent time. Pretty turbulent might be an understatement. Even before Wells, the transition to Wells, Wachovia Bank had been the first company that we transitioned to from A.G. Edwards. And we, of course, went through the financial crisis during that time period and handholding our clients and helping them get through that time period and dealing with concerns that we shouldn’t really have to be prepared with. “Is my money safe? It’s not what’s happening to the market, but is my money safe in your institution?” But once things stabilized, I found real purpose in partnering with some of the retiring advisors and opportunities that came up. It was a really wonderful climate and atmosphere in our local office. It was really a family-like atmosphere, and I still had a lot to learn. And all those advisors that I partnered with, I’ve joked I’ve never had an original idea in my entire life.

I stole all my good ideas from them. And some of them were really ahead of their time, and I learned, adopted, and built my own philosophies by working closely with them. Ultimately, by the time I left Wells Fargo, I was finishing up the fifth sunset program and had only made my way halfway through the sunset before the opportunity presented itself to create my own practice.

Louis Diamond:

So I’m curious, when did you first seriously start thinking about leaving and what really tipped the scales for you? What was the proverbial straw that broke the camel’s back?

Patrick Larkin:

Yeah, it really was a number of small items and ultimately one big one. But for a long time, I’d been content, but as I tried to grow the business beyond what I could do individually, I felt like I kept running into walls. There were it felt like limitations on how I could build out my team and structure the practice the way I envisioned it. Additionally, there were some new policies that also started to bother me. One of them was the platform advisory fee, which in my eyes was less about client transparency and more about replacing a declining revenue source on the firm’s balance sheet. And after dealing with clients and helping them through the bank scandal at the firm, I was concerned that this would come back and hurt me and the relationships that I had with my clients. Incidentally, I just recently onboarded a new client that transferred to us. And for them, looking at their statement, identifying this platform advisory fee-

Louis Diamond:

Oh boy.

Patrick Larkin:

… was the last straw for them before they moved about 15 million of assets to us. Also, I thought I would be I would be a better allocator of resources than Wells Fargo. Wells Fargo retained about half of the revenue that I earned for the business.

They seemed to think that the best allocation of that money was additional middle management. Whereas, I thought investment in technology, investment in additional personnel, and an investment in marketing were best places to continue to build out my vision. The final straw, and really a thing that crystallized everything for me was when I read a book in 2021 called The Infinite Game, a book written by Simon Sinek. Chapter eight, the title is Ethical Fading. And it uses the Wells Fargo bank scandal as a case study in what happens when a firm loses its moral compass. I read the chapter and thought, “There it is, I have to do something.” That was really the final push I needed.

I mentioned earlier I was very fortunate to start my career with a company called A.G. Edwards, a regional brokerage firm. And while I was at A.G. Edwards, there was a research report that came out on A.G. Edwards as a company. And I’m going to paraphrase a little bit on what was said in that report, but ultimately there was a line in there, and it was a criticism, but I took it as a huge positive as being an employee there. The line said, “While management does not necessarily say it, we believe the client is put ahead of the shareholder.” And that was something I was very proud of. And I just, upon reflecting on it, felt confident those were words that I never was going to see go to print about Wells Fargo.

Louis Diamond:

So you left Wells in 2022 and founded Oak Hill Wealth Partners in Lansdowne, Virginia. Walk us through that decision. Why go independent rather than going to another firm?

Patrick Larkin:

I really thought moving to another firm, the things that I had grown frustrated with at Wells Fargo Advisors, I would also find at another wirehouse firm. I was ready, and honestly, the simple answer is I thought I could do better. And I wanted control after having what I felt like was very little control. I had grown frustrated with others making important decisions, and I wanted an opportunity to grab the reins and make decisions on my own. I believe at that time, the future of wealth management was going to be built around fiduciary advice, and I didn’t want to watch that from the sidelines anymore. I was watching what was happening in the industry. And as we were trying to hire new advisors, reaching out to college graduates who were studying CFP programs, identified that they were more inclined to want to start employment with an RIA than a wirehouse.

What made the timing work really well was Wells Fargo had actually introduced a program to help advisors in the private client group spin off and establish their own RIAs. Now, whenever I tell this to another advisor, particularly ones that are wirehouses, they can’t understand it. And quite frankly, I don’t understand why they helped us do it, but we were about the 30th practice that they helped us through this process and they provided real support. They hired consultants, made vendor recommendations, even referrals to financing so I could pay off my last succession plan before I left. The only really upside for Wells Fargo was that the ask was that we continue to use First Clearing as the custodian. And one of the downsides for me was I was going to leave all of my deferred comp behind with Wells Fargo.

Now, all clients had to do to join me was sign a positive consent. And on May 9th, 2020, we turned on our computers in our new office and our clients were already there. That same day, we launched and started a relationship with Charles Schwab. And it was so exciting to be able to start shopping for what I thought was the best FinTech, really feeling like I was stuck with proprietary tools that Wells Fargo advisors had offered. I felt like I was a kid in a candy store. And if there was a cool tool that I identified that would help us serve our clients better, I was all in and I was buying it. I really feel that some of the technology that Oak Hill eventually bought into and some of the tools we’re using now are going to take years and years before they eventually trickle down to where the wirehouses are, if ever.

Louis Diamond:

Interesting. So it was really it was for the most part an internal move from one-

Patrick Larkin:

It was-

Louis Diamond:

… channel to the other.

Patrick Larkin:

… it was an internal move, but there was no requirement to stay at First Clearing. As a fiduciary, they couldn’t make those demands. And again, they helped us with the financing, which is really unusual that they helped us secure a loan so I could pay off the last retiring advisor. It’s really unusual that a bank will loan money where there is no business at the time, but because of previous experience that financial institution had working with Wells, they helped us facilitate the transaction. And the program is still in place at Wells Fargo, which is absolutely amazing to me after the experience that I’ve just had myself.

Louis Diamond:

Yeah, it’s interesting. I mean, does it cannibalize a more profitable revenue source? Sure. But if the alternative was all the assets go to Schwab or Fidelity, to me, honestly, it’s smart. I think they played the long game by not being adversarial on it.

Patrick Larkin:

I think they played a long game and they took the philosophy, and I think they use it as a recruiting tool that if you love them, set them free. And that’s exactly what they did.

Louis Diamond:

So for the rest of the episode, I want to talk about your eventual, and not that long period of time, transaction or decision to merge Oak Hill with Cerity Partners. This is our Build, Grow, Transact subseries. And I was really struck by your story because you were three years or so into running Oak Hill, and then your merger with Cerity Partners, an amazing RIA closed. That’s a fairly short runway. Usually when I see folks go independent for the first time, it’s 10, 15, 20 years, maybe never, that they decide to merge or sell. I’m curious to understand your thinking about the transaction. Were you looking to do something? Or was it just like right place, right time and the opportunity presented itself?

Patrick Larkin:

I had started Oak Hill with the intent of eventually down the road, much closer to retirement, looking for a partner. The opportunity and what I learned early on helped change that idea and philosophy, and I adapted and made modifications to take advantage of it.

Louis Diamond:

Interesting. So you weren’t necessarily planning on selling or merging the business, it just kind of circumstances happened the way they did?

Patrick Larkin:

Yeah. When we started Oak Hill Wealth Advisors, it was a really pretty short period of time before we started getting calls from larger national RIAs about potential acquisition, much sooner than I expected. Early on, I just brushed them off, but about a year in, I took one of those calls and it really just opened my eyes up. I realized for the first time this small firm, this little practice actually had some real value, way more than I’d given it credit for.

That first call, that first exploration didn’t go anywhere. It wasn’t a good fit. But what it gave me was a much clearer picture of what the serious acquirers were actually looking for. And that changed decisions I made at Oak Hill going forward. I really at that point stopped trying to optimize for near-term profit and really thought of my business as a business and started building towards enterprise value, sometimes at the cost of short-term income. And that turned out to be exactly the right call.

Louis Diamond:

That’s such an interesting perspective. Let’s double-click into that concept. So it sounds almost counterintuitive that if you kind of had this light bulb moment that like, “Okay, maybe I want to transact my business sooner than I initially thought.” I think most people would say, “Let’s become lean and mean. Let’s become as profitable as possible so my EBITDA’s higher.” But you took the different approach. What were the decisions you did to invest more in enterprise value rather than current cash flow?

Patrick Larkin:

A true business is one that doesn’t need me to be here every day to operate. And when we left Wells Fargo Advisors, it was myself and one other advisor that created Oak Hill Wealth Advisors. I was responsible for about 95% of the assets and revenue. And one of the more significant investments we made is in additional advisors. I recruited three new advisors, all CFPs, to join Oak Hill Wealth Advisors. Whereas, before I had been largely managing all the relationships myself. For someone that kind of grew up in the regional wirehouse space, it’s pretty counterintuitive to start moving relationships away from you onto other advisors. You’re trained and built to create a moat around your relationships, and realized that the potential acquirers are not interested, at least the ones I was interested in, weren’t interested in buying a book. They were interested in buying a business.

And that just meant every decision we made going forward was not profit-driven, but how can I increase the value of the business? So after that first call, I knew I probably would be looking to move forward with a transaction sooner as opposed to the end of retirement. That information that I got on that first call helped me realize that when Oak Hill Wealth Advisors opened its doors on May 9th, 2022, we effectively had an IPO. I had great familiarity with how the succession plans at Wells Fargo Advisors worked. And on that day that we opened our practice, the value of my business jumped to be four to five times the value of it in a succession plan at Wells Fargo Advisors.

Now, I knew going forward that I was going to be able to increase revenue. I was going to be able to increase EBITDA. I was going to potentially have some benefits from a market tailwind. I knew the multiples of EBITDA that the firms use may fluctuate, but the biggest change by far occurred leaving the wirehouse and having the value of my business grow four to fivefold in that same day. So what I really focused on was making sure that I was going to, when I was ready to start looking again after I had worked on improving the practice, really was going to look for a firm that was going to be a good cultural fit for both my clients, my team, and myself.

Louis Diamond:

That’s such a cool perspective. I’ve never heard anyone say that the day we launched your independent business was like an IPO. But honestly, it’s so true. You’re planting a flag in the ground that like, “Here is real value. This is value that we’ve created that we own rather than it being a book of business and a W-2 paycheck.” And it’s a fascinating perspective.

Patrick Larkin:

Yep. It really is amazing that the value changed that much on one day and the future value changes. Looking at the equity that I owned in Oak Hill Wealth Advisors, it made sense to consider is there a better way to take some risk off the table for myself and my family and diversify some of the equity that I had in Oak Hill Wealth Advisors with a larger enterprise?

Louis Diamond:

It makes complete sense. Obviously, everyone would sign up for 4 to 5X increase in value.

Patrick Larkin:

Sure.

Louis Diamond:

That’s not the reason most people go independent, but it’s important to know. And also, what I really liked about what you shared is I think a really valuable learning for anyone is those calls come in, whether it’s from annoying people like me or from an acquirer, from a firm, they’re not all noise. You took it as an opportunity to learn. Even though that first person who called wasn’t the right fit, it crystallized something in your mind and it let you make proactive decisions that ultimately paid off in spades when it came time to sign the dotted line for your transaction with Cerity. So I think it’s brilliant. And it’s very big picture, big-business-owner-type stuff that I think a lot of people will just filter out because it’s annoying and I’m young, I’m not looking to sell, but that was the journey.

Patrick Larkin:

Yeah, that first call changed my opinion about timing of when to move forward with a partnership. Originally, I thought this would be something at the end of retirement. The timing of doing so sooner seemed a lot more appealing after having that conversation and realizing what we had actually built.

Louis Diamond:

Amazing. So ultimately you decided to merge with Cerity Partners. We’ve had Kurt Miscinski from Cerity Partners on the show. They’re a real heavyweight within the RIA world. Most recently, they were valued at $8 billion in a recap, and it’s a very impressive firm. What specifically drew you to Cerity versus other potential buyers? Like you said, you got a lot of calls.

Patrick Larkin:

After that first call, I just got to work and focused on continuing to take care of our clients, building a team, adding new advisors, being a mentor to those advisors. But at the same time, we were being approached fairly regularly by that point. And I had a pretty good system for quickly deciding whether something was worth a second look, and most weren’t. But about a year ago, one of the national RIAs caught my attention and I started having conversations with them. And once I had progressed with them, I though, “You know what? If I’m giving this consideration, I really need to cast a wider net.” So I reached out to other RIAs that I had looked at and admired and been keeping an eye on. And ultimately, my longtime business coach, Barbara Kay, suggested I talk with Cerity Partners, a company that one of her other clients had just recently joined.

And from the very first call, I could tell something was different. And I talked to many different companies. Cerity Partners, and an individual I spoke with, Geoff Newman, they weren’t leading with valuation formulas or deal structure. They were asking questions about my clients, my team, and how I actually ran the practice. They had a very defined process for identifying partners who were genuinely compatible, not just advisors with books that were transferable. And that distinction mattered greatly to me. They also offered really, in my opinion, the right balance of support and still having some autonomy. And their aspiration to deliver consistent standard of care to clients, whether they be in California or Virginia, so that those individuals get the same quality of experience, resonated with how I was already running things within my practice. That combination of support and autonomy, I really liked the idea of continuing to have oversight over my local practice, over our practice, which included the budget, salaries, and bonuses.

It more than anybody else felt like a partnership and not a buyout. And I really appreciate it during that first call, Cerity was the only company that talked about a hundred-year plan. It was amazing to me to hear what their thoughts were. Most of the other firms I spoke with talked about valuations. And very quickly in the process, I found myself on a Zoom call with a Patagonia fleece vest-wearing private equity rep walking me through a valuation. And it was efficient, but it was not a cultural fit for me. And the infrastructure behind us and the combination of autonomy is really harder to find than most people think. As I progressed with Cerity, I remember early on in the process thinking to myself, “My God, I hope they want me, I hope they want me,” because I could tell I’m a very process-driven person They had a process with the way they brought me on board.

And ultimately, we had a due diligence trip set up to go to one of their larger offices where I met with one of their leaders, Claire O’Keefe, part of their practice development, and had an opportunity to meet with different leaders within the firm and really get my arms wrapped around the potential that they had. Just the quality of the people I encountered through the whole process just kept reinforcing the decision. And by the time we got to the finish line, it didn’t feel like a transaction. It felt like I was joining something that I was excited to be part of. So just a little bit more about what attracted me to Cerity, their culture is just phenomenal. Cerity Partners uses the word “meritocracy” and they actually mean it. Ownership and influence here track your contribution, not your tenure or how well you play the politics.

I just attended my first partner meeting in April, and without exaggeration, it was the most extraordinary professional meeting I’ve attended in my 25-year career. During the meeting, there was open debate about the direction of the firm, and every voice in the room carried weight. You could feel the culture. And that type of culture is built over years. You can’t fake it. Everyone in the room it felt like was rowing in the same direction. And by the time the meeting was over, I was so excited to get back to my team and tell them about what I had just witnessed, I wasn’t looking for the exit. I was looking for the brick wall to run through. I was so excited. And every once in a while I wonder having spent so much time in the wirehouse spaces, the bar just set really low for me when I talked to some of my other colleagues that have been independent for a long time.

But it was just an absolutely amazing experience. And I do want to just add, one of the last really important things to me about Cerity Partners is I’ve been very fortunate with my career and in this profession. And part of my goal over the rest of my career is to have a legacy. And my legacy currently exists with the families I’ve advised and the team that I’ve built and have served and led. But Cerity Partners is helping me achieve even a greater legacy in our industry with our shared long-term goals. During my first meeting, they talked about their hundred-year vision of being a worldwide employee-owned professional services firm. And currently, and this is very exciting, the employees are the largest shareholder of the firm.

No one else I talked to talked about their long-term goals like this, and it’s a vision I believe in. I want to contribute to help to see it accomplished. And one day when I do retire, I want to look back and see how I contribute it to a company that I believe is going to change the direction of professional wealth management.

Louis Diamond:

Wow.

Patrick Larkin:

My partnership with Cerity Partners is going to make that a reality. It’s just an amazing place. Yeah, very happy.

Louis Diamond:

Honestly, you can’t fake that type of enthusiasm. It sounds like-

Patrick Larkin:

It’s not-

Louis Diamond:

… you entered into a transaction, which is it’s like jumping into the deep end. How do you sort through what’s the sales process versus what’s real? How much of this is actually going to translate to my life? But hearing you not that long after the transaction, you still feel that and it’s very cool. In the press release I read, you cited estate planning, private markets access, and cross-border planning as key reasons for the merger. Can you talk about what it was about those? Maybe-

Patrick Larkin:

Yeah.

Louis Diamond:

… anything else that was missed?

Patrick Larkin:

Yeah.

Louis Diamond:

And were those not things that you felt like you could have delivered yourself as a standalone?

Patrick Larkin:

I thought that they were going to help me be able to be more effective in delivering those, but they weren’t the complete picture. The capabilities that we cited in the release were genuine gaps I wanted to fill and have available for clients and be able to prospect and go after new additional clients. But being fully honest, there were also deeper drivers. One was my team. Sometimes we get emotional about this. Being someone who’s trusted is really important to me, and that’s something I hold in high priority. There are people that followed me out of Wells Fargo to join me. One of my client associates had delayed her retirement so that she could join me and help us launch for the first three months. One of my other client associates has been with me close to 15 years. These are people that trusted me to do the right thing and to make sure that I wasn’t walking them off the plank.

Being able to join Cerity Partners and give them a future that didn’t hinge entirely on my personal longevity was a huge relief. And Cerity Partners is an ownership culture. I’m so happy to say today that every single individual on my team in our practice in Lansdowne is now either an equity owner in Cerity Partners or very shortly will be an equity-

Louis Diamond:

So cool.

Patrick Larkin:

… equity owner. So they have a stake as well in what they’re building. It matters. My youngest client associate noticed how much it costs to send to FedEx. And he goes, “Now that I’m an owner, maybe we should rethink about sending regular mail.” Another driver was my family. And I’ve always had the philosophy of trying to prioritize and clients first, team and colleagues, and then my family. And I’ve always made decisions that if I put those others before myself, eventually I’ll be taken care of.

And going through this transaction, it was so generous to my family and provided such security. There was a little bit of guilt that, “Am I doing this for all the right reasons?” But being able to secure my family’s future, converting equity in a three-year-old RIA into a stake of a $8 billion-plus valuation with institutional backing, that was a meaningful moment and I’d be less than honest if I glossed over that. I also really wanted to be part of something larger than myself. And the opportunity to help build a legacy in this business with Cerity Partners really gives me the platform to do that.

Louis Diamond:

Very cool. I can tell that you’re genuine, not just because of the way you sound, the way you’re speaking, but in the very beginning of the episode, you talked about the reason you got into this business was because you thought it gave you the dual purpose of being able to help people, but also being able to enrich yourself or your family. So this answer, it comes full circle. You’re able to accomplish all these goals, which made it the right decision. And I think, look, I say to advisors all the time, “You’re allowed to be greedy, you’re allowed to be selfish as long as the clients are still in the front of your mind as the most important thing.”

There’s nothing wrong with doing better for clients, building a legacy in your case, but also reaping the rewards of all your hard work and labor and also all the risks that you’ve taken over your career. I got to ask you, though, from being an employee of Wells, where you were running your team, for the most part, you can run the business within their guardrails the way you want, to then running an RIA, which is really like you’re fully in control of everything, to now being a partner, but you’re not the one who has the name on the door anymore.

Patrick Larkin:

Right, right.

Louis Diamond:

Well, how do you think about the giving up control and full ownership of your practice versus owning a very small amount of a much larger entity?

Patrick Larkin:

There was such continuity. Oak Hill Wealth Advisors and Cerity Partners were so philosophically aligned that I genuinely never felt like I was giving up anything that I wasn’t glad to let go. My wife joined the business shortly before I left Wells Fargo Advisors. And still to this day, on my drive home from work, I call her up and say, “You’re not going to believe this.” And it’s all a positive, good thing. So Cerity has struck the perfect balance of that autonomy and support combination that I was looking for. So I still have control and a say over the way our practice is managed. Very shortly after the merger, my supervisor came down and met me for the first time, and we went out together after the day had ended. And early in the conversation I said to him, “What can I do to make your life easier?” And he said, “Pat, what can I do to make your life easier?” And that set the tone that still exists to this day.

I almost cried when he said that because that was so different than what I had experienced up to that point. So the collaboration, the way we work together, it’s just absolutely amazing. And not once for a single moment have I second-guessed my decision. And it’s really weird because I’ve now been part of this organization for nearly nine months, and there just has not been one thing that’s occurred where I said, “That’s a disappointment.” It’s just been absolutely amazing every single day.

Louis Diamond:

Very cool. To me, there’s different arcs of when you want to ask people the question of, “Hey, any regrets?” And usually you don’t want to ask them too soon because they’re still going through the transition and integration and growing pains. And you don’t want to ask them too far in the future because you forget about what was life before. To be this short of a duration into this new partnership and to have these feelings, that’s absolutely pretty special. I got two more questions for you, Pat, if you don’t mind.

Patrick Larkin:

Sure.

Louis Diamond:

First one, economically, to me, one of the hardest things for really any advisor to really grapple with or to fully comprehend or make their own is, “I own 100% of the equity in my business. I get to decide when I want to sell in the future. My business is growing 10% per year. I wait to sell until 10 years from now, my business is going to be much bigger and I get to keep all the cash flow. I get to make all the decisions.” That compared to the path that you took, which was take cash off the table, which everyone understands, to, “Now, I own a much smaller piece of a much larger pie.” How would you talk to someone about the financial trade-off between a hundred percent ownership in their business, full control, full discretion over everything, versus becoming a minority equity partner in a larger entity?

Patrick Larkin:

You have to look at the valuation of my business, again, the day that we opened our doors as Oak Hill Wealth Advisors. There was such a massive jump in the value of the business. There was not going to be an opportunity for an appreciation at that level. So then, you have to compare what the growth rate is of Oak Hill Wealth Advisors versus a Cerity Partners. And I’m not embarrassed to say that Cerity Partners is and has been growing at a much faster rate of return. The value of the equity that I have retained in Cerity Partners, my ownership stake, I fully expect by the time I transact that business as I get closer to retirement, that’s going to be worth many times more than whatever opportunity I would have had at Wells Fargo with the valuation they would have provided me.

Nevermind, very important, the tax consequences of a structure like this is all the retiring advisors that I worked with were taxed at their highest marginal rate. I owned a business and we were taxed at long-term capital gains rates. A significant difference in savings in what as the owner we actually realize. So yeah, I feel very comfortable with the ownership that I have and the control and continued opportunity with the meritocracy culture to increase my share of ownership in the company.

Louis Diamond:

Okay, and let’s do one more question here. I’ll pick it back up. So Pat, I think it’s a really cool perspective. It’s almost do your homework, and if you find the right horse and the right jockey that can run faster than you can on your own, that the equity value will compound and grow and appreciate in a faster, more efficient way than what you’re doing on your own, which makes complete sense. It’s the ultimate trade-off. And again, it’s like jumping into the deep end. On the one hand, Oak Hill was all you, right? You control the growth, for better or worse, for the good days, the bad days, the good years, the bad years, versus now your growth is diversified amongst hundreds of partners across M&A, across different lead flow channels, et cetera. It makes complete sense. But honestly, if I were an advisor, I don’t know how I would think about it.

I think it’s all just fact-and-circumstance-based on where I am in my life and who the firm is and what I’m trying to accomplish. But it’s such a cool perspective because usually the playbook that we see, which is why we did this series, is go independent and there’s a long pause until there is a realization of all the value that’s been created. So seeing you do this in a much quicker timeframe, it seems like it was the absolutely right decision. To me, it just is another path, another way that an advisor or a firm is able to think about their future. Any final advice or parting words for someone who is sitting right where you were in 2021 or 2022 thinking about making the leap? And we’ll say a transition in general, or really anything you want to share to wrap our episode here.

Patrick Larkin:

Thank you for having me, and this is a great question. Happy to give a thoughtful answer to it. Before I’d left Wells Fargo Advisors through the program and started Oak Hill Wealth Advisors, I had an opportunity to go through a due diligence process and make sure that this was going to be a right move for me. There was no carrot out there that was obvious. I learned after that first conversation that I had built a practice that had some value to it. I was leaving behind the security of something I knew, leaving behind a significant amount in deferred compensation, and I wanted to make sure I was making the right decision. And through that due diligence process, talked to about five other firms that had recently left Wells Fargo to join this RIA program.

I asked them a lot of different questions about what their experience was. And at every point during those conversations, they all said the same thing at different points. And it sounded like this. They said, “I’m working harder than I ever have before, but I wish I had done this sooner.” So my advice to those people, do it. I know that sounds simple, but I mean it. The fear of leaving is almost always worse than the actual experience of leaving. And I understand the inertia of not leaving and the real apprehension of what was on the other side. But what I found was a version of this profession I genuinely didn’t know was possible.

One where I could do things the right way on my terms for the people I care most about serving. And not every path is going to look like mine. Some advisors should go fully independent and stay there, and that can be an incredible life. But when it comes time to look for a partner, quite frankly, if Cerity Partners is not on your shortlist, you’re making a significant mistake. And I say that not to sell anything, but because I’ve lived the comparison firsthand and there’s simply nothing else like it.

Louis Diamond:

So Pat, it’s been really fun, but I don’t think we’ve had anyone on the eight years or so we’ve been doing this show that’s gone through this type of arc or journey that you have. One of my big takeaways or sticking points that this episode brought for me is by going independent and taking control over your future, you created complete optionality for yourself to do exactly what you wanted to do with your business, even if that was different than what you initially planned. So in your case, it was selling within three years of going independent, but by taking action, being proactive, playing some offense, you made the opportunity happen on your terms and your timeline.

So this has been fun in so many different ways. I loved your comment about how when you went independent, it’s basically like the day of your IPO, the four-to-five-times increase in value versus an internal succession deal, and even just the way to think about getting equity in a larger entity versus running your own plays only. So thank you so much for doing this. This has been fun.

Mindy Diamond:

As a financial advisor, you hold yourself to the highest standards of integrity, honesty, and credibility. You are successful because you take your professional responsibility seriously and are dedicated to your clients. But are you living your best business life? Are your goals aligned with your firm’s or could a better option exist? Should I Stay or Should I Go? Is a book written with you in mind? It’s a self-guided journey that walks you through the key steps that we take with our advisor clients. This strategic thought process and roadmap to professional self-discovery is designed to help you ask the right questions and think critically and objectively, whether you’re considering change or not. Learn how to get your copy at diamond-consultants.com/thebook.

Most firms are adding AI to existing workflows. Ryan Belanger chose a different path, acquiring a fintech company and rebuilding Claro Advisors around an AI-native platform. He explains why he believes the future belongs to firms that rethink how they operate, not just the tools they use.

Most firms view AI as another technology investment. Ryan Belanger sees it as a business strategy.

Louis sits down with the Founder & CEO of Claro Advisors to discuss why his $1.5 billion RIA acquired a fintech company, built an AI-native operating platform, and believes the firms that gain the biggest advantage won’t simply adopt new technology—they’ll rethink how their businesses are built.

The conversation also explores the broader philosophy behind that decision. Ryan shares why he’s consistently chosen unconventional paths—from recruiting younger advisors and embracing a partnership model built around ownership to investing in proprietary technology instead of relying on third-party solutions. For advisors, the bigger question isn’t simply how AI will change their workflow. It’s how it may change what it takes to build a durable, differentiated advisory firm.

Every generation of wealth management has been shaped by a different competitive advantage.

For some, independence paved the way to build unique branding and a bespoke client experience. Inorganic growth and M&A gave many firms access to scale and growth.

Today, many believe the next advantage will come from artificial intelligence. But simply adopting AI may not be enough.

Ryan Belanger has spent his career challenging conventional thinking. He left Morgan Stanley in 2012, well before independence became mainstream. He built Claro Advisors by investing in younger advisors instead of competing for established producers. He embraced a partnership model centered on advisor ownership rather than restrictive employment structures. And when AI began reshaping the industry, he made another unconventional decision: instead of licensing another technology platform, Claro acquired a fintech company and built its own AI-native operating system.

Louis explores the reasoning behind each decision and the philosophy that connects them. Ryan explains why he believes proprietary technology will become a defining competitive advantage, how Claro’s AI platform, Claire, is changing advisor workflows, and why the biggest opportunity isn’t replacing advisors; it’s giving them more time to do the work clients value most.

The conversation also tackles practical questions facing every advisory firm: how to integrate AI responsibly, where human judgment continues to matter most, and why the firms best positioned for the future may be the ones willing to redesign their businesses instead of simply adding another layer of technology.

> Download a transcript of this episode…

Why did Ryan launch independently long before it became common? (7:30)

Ryan explains why leaving Morgan Stanley in 2012 wasn’t simply about independence—it was about creating a better business model while betting on himself.

Why recruit emerging advisors instead of established producers? (15:00)

Ryan shares why investing in younger advisors has become one of Claro’s greatest competitive advantages and succession strategies.

Why would an RIA buy a technology company? (23:45)

Rather than licensing another platform, Ryan explains why Claro acquired NDVR to build proprietary technology that could fundamentally change advisor workflows.

How does Claire actually help advisors day-to-day? (33:00)

From meeting preparation and client follow-up to portfolio management and workflow automation, Ryan walks through how AI is saving advisors meaningful time.

Will AI replace advisors—or make them better? (36:30)

Ryan discusses where AI belongs, where human advice remains essential, and why he believes technology should enhance – not replace – the advisor relationship.

What does the advisory firm of the future look like? (38:20)

Ryan shares his long-term view of how AI, proprietary technology, and advisor expectations will reshape wealth management over the next decade.

https://youtu.be/7XvSXi0PzXI

“I wanted to build something that was integrated instead of just layering another tool on top.”

“We’re trying to make really good advisors become super advisors.”

“Clients still want advice from a person—but they’re going to expect that person to know how to use AI.”

“The firms that win won’t necessarily be the ones using the most technology. They’ll be the ones building differently.”

Ryan believed owning proprietary technology would create greater long-term differentiation than licensing another collection of third-party tools.

Claire is Claro Advisors’ AI-powered chief of staff, designed to automate advisor workflows, prepare meetings, organize client information, and streamline operational tasks.

Rather than layering AI onto multiple disconnected applications, Claro built an integrated operating platform where AI has access to the advisor’s workflow, planning, portfolio, and client information.

Ryan believes AI will automate much of the administrative work advisors perform today, but that clients—particularly those with more complex needs—will continue to value human advice and relationships.

The firm emphasizes advisor ownership, partnership, equity participation, technology, and operational support instead of relying primarily on acquisition-based recruiting models.

He believes proprietary technology, integrated AI, and the ability to improve advisor productivity will become increasingly important competitive advantages.

Ryan believed owning proprietary technology would create greater long-term differentiation than licensing another collection of third-party tools.

Claire is Claro Advisors’ AI-powered chief of staff, designed to automate advisor workflows, prepare meetings, organize client information, and streamline operational tasks.

Rather than layering AI onto multiple disconnected applications, Claro built an integrated operating platform where AI has access to the advisor’s workflow, planning, portfolio, and client information.

Ryan believes AI will automate much of the administrative work advisors perform today, but that clients—particularly those with more complex needs—will continue to value human advice and relationships.

The firm emphasizes advisor ownership, partnership, equity participation, technology, and operational support instead of relying primarily on acquisition-based recruiting models.

He believes proprietary technology, integrated AI, and the ability to improve advisor productivity will become increasingly important competitive advantages.

Ryan founded Claro Advisors in 2012 after seven years at Morgan Stanley. He named the company after a Latin phrase “to make clear in the mind.” All Claro advisors strive to give their clients clarity and transparency, core tenants of the firm. Claro is continuously recognized within industry for its growth and thought leadership. In 2004, Ryan received a BA in Economics from The College of the Holy Cross and in 2009, he earned the Certified Financial Planner™ distinction.

He is most proud of his philanthropic activity. Along with his wife Rachel, they started a foundation that raises money for genetic research in the name of their late daughter, Bella. Their focus is on extreme rare disease.

Ryan resides in Boston’s Back Bay with his wife Rachel and their three children. He enjoys exercising, golfing, reading and spending time with his family. He has been featured in numerous magazines and industry publications and is regularly on television sharing his market thoughts.

NOTE: The views and opinions expressed by the guests on this podcast are their own and do not necessarily reflect the views and opinions of Diamond Consultants. Neither Diamond Consultants nor the guests on this podcast are compensated in any way for their participation.

Why AI Matters Now: How a $1.5B RIA is Building the Firm of the Future

A conversation with Louis Diamond and Ryan Belanger, Founder & CEO of Claro Advisors.     

Louis Diamond:

Welcome to the latest episode of our podcast series for financial advisors. Today’s episode is Why AI Matters Now: How a $1.5B RIA is Building the Firm of the Future. It’s a conversation with Ryan Belanger, the Founder and CEO of Claro Advisors. I’m Louis Diamond, and this is the Diamond Podcast for Financial Advisors.

Mindy Diamond:

At Diamond Consultants, we help elite advisors identify the right environment for their businesses to thrive, whether that’s at a wirehouse, boutique, or independent firm. With nearly three decades of experience, we’ve guided thousands of advisors and represented more than a quarter of a trillion dollars in assets transitioned. And each year, one in four advisors managing a billion dollars or more who change firms are our clients. Our process is education driven, and based on building relationships, starting as your strategic partner well before you’re even thinking of a move. To schedule a confidential conversation, call us at (908) 879-1002.

Wondering why advisors change firms and where they’re headed? Are transition deals going up or down? Those very questions and more inspired us to create our annual Advisor Transition Report. It’s the award-winning data-driven resource designed for advisors that connects the dots between the motivations around movement and the firm’s appetite for top talent. Arm yourself with the knowledge you need to make smart decisions. Download your copy at diamond-consultants.com/transitionreport.

Louis Diamond:

Artificial intelligence has quickly become one of the biggest topics in wealth management in the world. Almost every firm is experimenting with new tools, looking for ways to automate tasks, improve efficiency, or help advisors serve clients more effectively. But what if AI isn’t just another technology to plug into your business? What if it becomes the foundation for how your business is built? That’s exactly why I wanted to have Ryan Belanger on the show. Ryan is the Founder and CEO of Claro Advisors, a billion and a half dollar RIA that’s taken a very different path than most firms in the industry. Rather than simply adding AI to an existing tech stack, Claro acquired a FinTech company and is building its own AI native operating system designed specifically for advisors.

What’s interesting is that this isn’t really a conversation about software, it’s about strategy. Ryan has consistently gone against the grain from leaving Morgan Stanley to launch an independent firm in 2012 before it became commonplace, to recruiting younger advisors when others chased established producers, to betting that proprietary technology will become one of the biggest competitive advantages an advisory firm can have.

If AI is going to reshape wealth management, and I think it will, the firms that benefit most may not be the ones using the most tools. They may be the ones rethinking how the entire business operates. Ryan shares what that looks like in practice, what he’s seeing from advisors today, and why he believes the next generation of advisory firms will look fundamentally different from the firms we’ve known over the last two decades. There’s a lot to cover, so let’s get to it.

Ryan, thanks for joining us today.

Ryan Belanger:

Yeah, nice to see you.

Louis Diamond:

You too, good to see you again. For those who aren’t familiar with you and your firm Claro, why don’t you walk us through your background and how you found your way into the industry to set the table.

Ryan Belanger:

Yeah, sounds good. So background was after college, I got a job at Morgan Stanley. I’d done an internship while in college and that gentleman, Morgan Dewey, said you should look at the Morgan Stanley. So I applied, got a job immediately, and just a couple weeks after graduating, I began as a financial advisor in a training program at Morgan Stanley and spent a good amount of time there and was able to develop skills necessary that really I had all along just growing up, a lot of entrepreneurial spirit I think is important in this business, how to relate to people, some competitiveness. I just happened to luck out and get into a profession that rewarded some of those skill sets.

Louis Diamond:

I’d say it was the right choice for you. So I think you started at Morgan Stanley in 2004. You were 21, 22 years old, just cutting your teeth, but the financial crisis happens a handful of years later. So what was it like being a relative newbie and seeing client accounts falling, the world crumbling every day? What did living through that crash teach you that’s shaped how you’ve built your business or serve clients now?

Ryan Belanger:

I did learn a tremendous amount at Morgan Stanley and I do still tell people if they’re looking to start at a big shop with big training programs and resources and really try to figure out what you like and then you can go off and get more specialized. But I do feel like it was a great place to get trained. They would post how many cold calls we were making every day. So on the board every morning you’d walk in and say, “Okay, where did you fall?”

And I’m a competitive person, and I just want to make sure I was first every single day. So it was those type of things that really propelled me to keep interested in this business but also see the benefits. It’s really hard to get clients and that’s what people underestimate the most is to build the level of trust with someone that they’ll allow you to manage their retirement nest egg is it takes time. And I was 22, I looked really young, I had no experience, but I was fortunate to have two great mentors at Morgan Stanley, a gentleman named Todd Wetzel. He was brilliant at developing relationships, really caring for people.

And then the gentleman that I had done an internship with went to Morgan Stanley as well, and he allowed me to work on some small accounts and really cut my teeth with some customers. And I was very fortunate to have done that, but you’d asked about the crash, and I think what I learned from that when people were literally weeping when their account values were down by 50%, 60% was that money is really emotional, and you have to understand how much it means to people, it’s not just the number on your screen. So having some empathy towards someone who’s really in a period of distress is now a critical skill that those of us have been around for this long understand.

And there’s a whole generation, Louis, of advisors that have never experienced a real bear market, and I do fear for them at some point because when you go through that, it really changes the perspective that you have. But for me, it happened, I was four or five years into the business at that point, so I’m thankful that it happened just for my own personal development and I’ll never forget it.

Louis Diamond:

Yeah. Things have a way of happening for a reason and then the best advisors, best humans, they learn from them, and they’re better off for it. You’re very much right. I like that perspective about how the empathy around the emotions of money was something that you still carry and wear as a badge of honor today. So you left Morgan Stanley in 2012. I think you were 30 years old I read.

One, that’s very young to consider leaving a firm like that nonetheless to go independent when in 2012, it wasn’t like everyone was going independent. There weren’t as many infrastructure providers or tech vendors or as much capital available as there is today. It definitely wasn’t a path that was as well-worn as it was. So two-part question, what pushed you to leave the firm presumably without a huge book of business? And second part, how’d you think about risk and reward at that age?

Ryan Belanger:

Yeah, what drove me was ultimately I felt like I was not seeing the value from the firm I was at, Morgan Stanley at the time. They were just taking an exorbitant amount of the revenue I felt. And I would see product managers strolling through and going to steak dinners, and I’m thinking, geez, I’m here every night on weekends. I’m busting my butt, and I should be creating more value to myself. And so that was one kind of thing. And I think there was a right level of naivete just to think that I could pull this off.

I did believe that I had a small number of clients. I was hopeful that they would come because I had to hit a minimum for the custodian platform to start the RIA, which I was able to do. But I felt that they would come with me and that I had developed enough trust with them that I could be their advisor for a long time. And so for me, it felt like the technology wasn’t great. I was just told the mother-in-law is an expression. She says to my kids sometimes, “You get what you get and you don’t get upset.” Have you heard that expression?

Louis Diamond:

I have. My daughter reads a book where that line is repeated frequently.

Ryan Belanger:

Yeah, okay. So that’s how I felt then. I was like, “This is what you have and deal with it.” And to me, it just felt like there had to be a better way, but I didn’t have any capital backing, so I bootstrapped it. I Craigslisted an office from an estate planning attorney. I cold called Fidelity at the time they were our only custodian. I called to get some compliance help and I just thought that there’d be other people that would want to join. I named the firm, it’s a Latin phrase, it’s Claro Advisors, and it means to make clear in the mind. And I felt like not only was I trying to do that for clients, but I was trying to push advisors to challenge the norms here.

There are other solutions out there. So I purposefully did put my name on it, I knew that there’d be other people that might feel the same way. I’ve always been a team sport guy. I like being around other people and collaborating. And I did have a good friend and credit to him. He said, “If you put this together, I’ll come with you.”

And so just a couple weeks after I did, we talked and I said, “It’s up and running.” He came and Dana was our first, he’s still with us.

And then a couple of months later, another guy I used to work with called and said, “Hey, I’m at this bank, and it looks like what you’ve done is interesting.”

And I said, “We like it if you’d like to give it a try.” And so he came, his name’s Mike. He’s still with us. And so teams started to get put together.

But I met someone in 2014, so I was two years in at that point and I was doing legitimately everything, not only as an advisor, but just all the stuff that you have to do to run the business. And it was becoming too much, especially the compliance. And I think nowadays starting an RIA, the threshold is so much higher. That’s why you see better than anyone else. You just see a lot more tuck-ins. But Jen Street was someone that I met and she really allowed me to catapult the business and scale it, so she took over all the operations and compliance and that really freed me up to be an advisor. And I really was just an advisor moonlighting as someone running. I would recruit a little bit or just be introductions, very soft. All that has changed based on what we’ve done in the last couple of years.

Louis Diamond:

Amazing. So thinking about risk spectrum, obviously now if you look back and say, “Hey, I had 30 million or whatever it was, I didn’t have anything to lose.” Right?

But when you’re in it and you had income, you had recurring revenue, you had a paycheck versus the dynamic of, “I’m going to incur a bunch of expenses. I’m not positive who’s going to come with me. I’m not going to have a paycheck for a period of time.”

Did the fact that your business was relatively small and you were just getting up and running, do you think it made it easier for you to reconcile that risk, or in some ways it was harder because your dispersion, if someone didn’t come, was that much higher?

Ryan Belanger:

I think it was easier for me, I knew I could always go to another firm. They would take me and whatever clients I had. I did it at a time when I had little personal risk, no kids, no mortgage. I didn’t have a wife at that point. So for me, it felt like the right time to take a risk. And I had been entrepreneurial in my life. I mean, I had a business in high school and my parents and grandparents were entrepreneurial. So that was in me, even if I didn’t really recognize it, was that I was okay with a good level of risk. And I do say this now to anyone that I’m hoping to partner with is that if you want to bet on yourself, I’ll go all in on you too.

But you’ve got to be able to take that jump. I won’t let you fail, but you’ve got to be the one. I think that inertia is what a lot of advisors are like, “Geez, I don’t know, I got to give something up.” And that’s why the data’s important and you have all the data. The clients overwhelmingly go with the advisor. These days it’s just much harder to try to establish a new relationship with a trusted advisor than it is to just DocuSign some forms and move your account somewhere.

So to me, it’s just trying to support people, and really push them to the edge and say, “No, this is possible. You should definitely explore this.” And I get it’s totally different, and you might be at a different life stage, but you know the numbers. I mean, tens of thousands of advisors are moving every year and not all of them have a small book like I did when I did it.

Louis Diamond:

Right, exactly. On one hand, making this entrepreneurial move as early in your career as you did, it was a benefit, right? Because you didn’t have as much to lose, like you said, the stage of life you’re in allowed you to absorb more risk. On the other end of the spectrum, if someone who has a massive business with immense value, they’re well situated financially, maybe their kids are through college, et cetera. And then most people are somewhere in the middle. So it’s interesting hearing that dynamic in real time. Let’s talk about Claro today. So you launched the business, like you said, you had to work hard to meet a minimum custodial threshold. So started from a very small base in 2012, but where is it today as far as assets, team size? Just give us some stats or perspective on what you’ve built in the last decade and a half or so.

Ryan Belanger:

Yeah, sure. So we enjoyed a tremendous amount of organic growth, Louis. We are not capital-backed. We don’t buy books of businesses, so I would recruit or partner with advisors that were coming from all the various places that you could think of that were finding us to be a very friendly place to work where you had a high level of autonomy, freedom, control, just great economics. We stayed out of people’s ways. We were just good people trying to help other good people, and it was just that friendly environment that allowed us to grow. And of course, we can’t discount market. I think markets had a tremendous growth for everybody in the business. And so the business as it stands right now, we’re about 1.5 billion in assets, 15 to 20 advisors. We got a 40-person team based primarily at a Boston headquarter, but we have advisors all over. And I think as we’ll get to, we’ve just gone through a really exciting new chapter for us where the next 15 years are going to look a lot different than the previous 15 years.

Louis Diamond:

Very cool. That’s amazing, and I’m in the recruiting businesses and doing recruiting yourself, it’s not easy to tell your story, get in front of the right people, the right like-minded people too, who are willing to take the leap to you, especially if you don’t have the capital backing and you can’t pay big deals or write big checks like others could, so that’s a massive testament to you and your vision. I know the average age of an advisor at Claro is around 40, yet the average advisor in the industry is 59, 60, 61, depending upon what data source you look at. What do you think you figured out about attracting, training, and really cultivating younger advisors that the rest of the industry either gets wrong or ignores? What’s been your hack in that regard?

Ryan Belanger:

I’ll just take a chance on people that others might not. And typically what that really means is someone with nothing, I’ll make them a deal and I’ll say, “Look, I believe in you. I think you’d be a great advisor. Let’s work on an arrangement where you feel like you can do this and I’ll support you.”

And so our specialty was growing advisors from 20 million or 30 million into hundreds of million of client assets. And some of it was just being willing to look where others wouldn’t possibly want to spend their time. But when I was 22, someone took a chance on me, and so I owe it to the next generation to do that as well because there’s some great talent out there that really just isn’t getting the attention they deserve because they don’t have big books of business yet.

But one of my core values is long-term thinking, and so that’s the way I frame my decisions is it doesn’t have to be a win today, but it can be a championship tomorrow or down three or five years from now. And so that’s how I’ve positioned it. I think that’s why we tend to get younger advisors.

And then what happens when you get a lot of younger advisors, you have some older advisors say, “Hey, look, that’s an attractive bench of talent. I needed a succession plan. You guys seem to have a bunch of guys and gals that know how to do really great work and serve clients.” But I think that’s probably one of the things that I just was willing to take some chances on people at an earlier stage.

Louis Diamond:

Yep. I love it. I mean, once again, you said in the beginning, you developed an empathy for the emotional side of money and what people were going through that you carry through to this day. So not losing touch with the fact that you started. I mean, everyone starts in this business at some time, but I feel like once you’re successful or you’re through the first few years, you forget what it was like to be a newbie. So keeping that perspective and appreciation for the mentors you had, et cetera, is great.

And honestly, from a business building standpoint, to me in this environment, unless you take on private equity capital, or you have capital from a BD or from a wirehouse behind you for recruiting, it’s really hard to win advisors with large books of business. So going in the blue part of the ocean instead of the red ocean, if anyone’s read that book, is very smart, looking under rocks that others don’t or really buying into or leaning into folks that you see something in that you know you can cultivate is a brilliant way. And it’s honestly more scalable, cheaper, you build a better business as well doing it the way that you do, but still, it’s hard. And my guess is the ROI is shorter. I’m sure you’ve made some hires that don’t pan out.

So you have to have the tolerance and the demeanor to really invest in people. So long-winded way to say I love what you’re doing. How much of your recruitment of advisors and the retention of that talent as they become successful would you tie to how you compensate them, or equity if that’s available versus the culture of the firm and the mentorship that you and your team provide?

Ryan Belanger:

Yeah, I mean I’ll speak to what we’re offering now just because that’s more relevant, and so we are positioning ourselves now as the best home for advisors in the country and we really believe that’s the case, but our problem is we’re just a secret. We’ve just come to the market after our deal and all the technology that I know we’ll talk about. So we’re now marketing this message to advisors that want to partner with us. Economics will help them grow. We have a really interesting growth program. We’ll give them equity and Claro. I firmly believe that we should tie each other, just get in the same boat, so to speak. So our success is their success, but allowing them to operate in a 1099 model, which I know is not a popular strategy.

I know everyone wants to buy books and own the assets and own the clients, but I feel there’s a tremendous amount of advisors that do not that probably should not be monetizing their businesses so quickly. And so I’m trying to foster a home for those like-minded advisors that want the autonomy to own their clients, maybe even still have a brand, but partner with a firm that’s got really credible technology, just unbelievable back office support and a firm of the future so that they can grow at 10X to what they could have on their own and then they could monetize. That’s what we’ve tried to put together here with our partnership model.

Louis Diamond:

Love it. Yeah, I mean it is definitely going against the grain a little bit, leaning into growing a 1099 model versus more of an acquisition model where everyone coming over as W-2s. So do you think about those trade-offs when it comes time to raising capital down the line or if you want to sell the business or even just an advisor wants to leave, that would stink if that happened. How do you think about those trade-offs? The ability to let advisors keep control and ownership. And honestly, in my view, probably win many people that you wouldn’t otherwise versus the stickiness, and the enterprise building abilities of owning the books of business.

Ryan Belanger:

Yeah, it’s a paradox because I understand why you want to own the client, but that’s a different business model. And frankly, I think it attracts different type of people. I had to really look myself in the mirror a couple years ago. We had enjoyed a tremendous amount of success, high growth and all organic, growing at 30% more per year on a CAGR basis. Nothing could stop us. But what happened was when private equity entered the space, everyone wanted to buy Claro. And to me, it didn’t feel like I did a lot of due diligence. I talked to a lot of firms. I didn’t see any differentiation in the market, Louis. To me from a technology perspective, everyone was doing the same thing. They’re using six to 12 different tools. We all know who they are. And now there’s a bunch of AI tools they’re layering on. And to me, it just didn’t feel like that was going to be any… There was no differentiation in the market.

But admittedly, I had a couple of friends who I’d brought in at very low levels of AUMB that wanted to leave. And they said, “Look, I want to go to a firm that has more resources.”

And so I had to just make a business decision and say, “Where do I want to take this?”

And so it was only after some real adversity because you get emotionally attached to these people that you’ve developed friendships with and they still are friends, no doubt, but they can leave and they’re not captive. So we have to plan for that at Claro now, and I think we’ve got two ways that we’ve done that where it really ties the advisors to us, but in a way where they want to be here because we have something that’s really different.

Louis Diamond:

I like it. I’m sure we’ll get into that. But before we do, we’ll get into what you’re doing on the technology side, which is very cool and unique. How do you balance being an advisor and being a CEO? And what percentage of your time is advisor versus CEO and has that fluctuated or changed over time?

Ryan Belanger:

Drastically changed in the last year, two years or so. So the first 10, 12 years, I was really an advisor first and foremost. That’s inverse at this point, I’m strictly running the business. I have a great team here that deals with our clients, and I’ll still attend the client meetings and such, but I’m really laser-focused on running the business, trying to develop new partnerships with advisors, running an engineering team, sales and marketing. So the change for me has definitely occurred, and I’ll miss not keeping up with planning as much. I’m a CFP, but I just recognized that for me, I had to make a clear change and commit all my time to running the business, and so that’s the decision that I’ve made.

Louis Diamond:

It is a hard balance. I mean, there’s some people that try to do both, run a business, be an advisor, be a rainmaker, and something breaks. You’re not able to give all yourself to one thing. Then there’s others that would much prefer to be an advisor over a business owner. Others who say, “I’m over being an advisor. I want to be a business owner.”

So I think the cool thing about doing what you’ve done is you get to choose, right? Some of it might be circumstances, but you really got to decide which elements of the business you personally want to invest your time in. And you really push your chips in the middle of the table. So let’s get into what you did in November of 2025. I read that you acquired a tech company of all things called NDVR. I’ve done this podcast for a while, speak to a ton of people. I can’t really think of anyone, any advisor or RIA that’s actually bought a tech company. So what made you puck the trend, buy a tech company and not just license all the FinTech that’s available today?

Ryan Belanger:

Yeah, that was the decision I had to make was do I really want to be different, or do I want to just say that I’m different? And so I was fortunate enough to get introduced to a gentleman named Michael Simon about 18 months ago, two years ago. And him and I immediately could see that we were both trying to solve the same problem, and we had perfectly mirrored image skills of one another so I had this deep wealth experience and he had a deep tech experience.

And sometimes it’s just about timing in life, about catching someone at the right time. And I think we each caught each other at a really good time where we could see that coming together, we could create something really magical. And this AI wave was cresting. And I could see when I was talking to all the national PE firms or RIA firms about what people wanted to do, no one had quite figured out how AI was going to come into the technology mix, and it appears as though it’s just going to be another add-on tool to everything else.

And for me, I wanted to try to build something that was integrated an all- in-one platform for an advisor so they didn’t have to use a ton of different tools. And I thought if you could do that, couldn’t you have AI that’s really much more rich and purposeful to help the clients? And so I felt like here’s an opportunity to elevate financial advice throughout the country, really give the clients all the value. And so what we’ve built allows advisors who are really good advisors to become super advisors because they’ve got this technology cape that no one else has that is allowing them to save a bunch of time and do all these really cool things for their clients. But it just felt like right time, right place. I’d been through a little bit of adversity and I felt like taking another swing just like I did 15 years ago going for it. I’ve really never been averse to risk, and so this felt like it was too good to pass up and so we went for it.

Louis Diamond:

Interesting. So that makes sense on the build or acquire versus rent dynamic, wanting to own the IP that makes you actually different. What does NDVR actually do?

Ryan Belanger:

Yeah, so everything’s all integrated. So we’ve kept the Claro Advisors name. We feel like clients really want to know that they’re still getting a person to deliver the advice. And so having the advisor’s name in our brand is important, but we have a Claro Intelligent Hub, and that’s where it’s an AI native operating system for the advisors. They spend their entire day in there, Louis. So they’re not toggling between 10 different Chrome tasks to perform all their business. And so what that allows them to do is not only it’s CRM, calendar, contacts, emails, messages, but we also have all the portfolio information. So trading history and we can do tax loss harvesting and factor-based investing.

So we’ve got institutional grade portfolio management, and that’s really what Endeavor had created through their R&D was the hyper-personalized portfolios where you have a customer’s financial plan directly tied to their account. So there’s never any de-linking between the two. It’s really sophisticated technology that we can provide to our clients. So that’s all integrated as well. And so we’ve since continued to build the build upon that layer of integrated proprietary technology.

Louis Diamond:

It’s very interesting. And we have to imagine part of you maybe now or in the future is, okay, we’ve built this amazing technology mousetrap for our advisors, but do we become a FinTech? Is there any thought of eventually licensing what Endeavor is doing for your business and your clients to other RIAs? How do you think about that dynamic of just building something unique and different for Claro that advisors can latch onto versus making what you and your partners have developed into something that someone else can take and license themselves?

Ryan Belanger:

Yeah, it’s a fair question. We get it a good amount. While there might be a possibility that we license this to some other businesses, our main goal right now is to keep it captive to RIAs that want to partner with Claro. And so we feel like this gives them a true level of differentiation in the market, and so that’s the approach that we’re taking right now. Being a FinTech company, there’s a lot of different skills. The setup and tear down of getting someone to use the platform and I think all that time and resources we want on sales and marketing to try to attract new advisors and continue to develop just jaw-dropping technology for the existing advisors.

Louis Diamond:

Very cool. Let’s talk a little bit about your partnership model. So it does sound unique in that you have people that are 1099, but you don’t usually also hear partner. So how does it work?

Ryan Belanger:

Yeah, so we’re offering advisors to come and use Claro as a back office so you can have your own brand if you want or you can just be a Claro advisor. We have both here and you’ll be a 1099 advisor so you’ll still own the business that you’ve owned. So if you were at a wirehouse or something, you would actually now be creating some enterprise value for yourself. But if you’re an existing REA, you’d be coming to us because you’re tired of doing tech vendor due diligence all the time or you’re tired of the compliance, the AI regulations. That’s just coming. So that’s going to be a huge challenge for REAs, so we’re seeing a lot of interest from REAs saying, “Look, you’re not asking me to give up really anything except the stuff that I hate to do anyway, so this sounds great.” So they partner with us.

In return, they get all access to our technology And we’ll provide all the back office support, office space, dedicated resources, planning, everything you could want to have to operate a business. We do have a growth program that’s really interesting. And then we’ve got this equity in Claro. As you’re a partner with Claro, you should get equity so we give stock options to our advisors who are here and every year thereafter. And naturally, that’s a way to stay connected with the advisor. So hopefully they never want to leave, and I do believe that once you experience our technology, you never want to go back to trying to do it the way you were doing it before.

Louis Diamond:

It’s like instead of building the most enclosed box that you keep people in with sticks and with locks and keys like a lot of firms do, it’s we’re going to keep advisors here, but not by force, but because they have the stock options, because you’re delivering value, because they have this amazing technology. To me, that’s the dynamic that so many firms across the industry get wrong is that they try to keep advisors where they are by restrictive covenants and by fear, and by retribution rather than if we just do good work for people, we add value, we make ourselves indispensable to the advisor. To me, it creates a healthier dynamic. I think firms would actually retain more even if it’s a gentler approach.

And I love what you’re doing there. I think it’s the exact right way to think about we have advisors that are 1099, so yeah, they could leave us, but we’re doing things that make it that they don’t want to leave us. And that’s your charge as the owner to create the infrastructure and the structure where people could go out on their own, but there isn’t an advantage to do so.

Ryan Belanger:

Yeah, I think the culture is a big thing for us. And if you have people here that don’t want to be here, that’s a problem. And I think that’s what you see in a lot of the wirehouses. Frankly, they scare people and they don’t. It’s like, oh my God, if I leave. And for us, it’s like personally, life is too short. I want to work with people that want to work with me. I’ve got other things going on in my life and these things are just work things. And so I want to enjoy being in the office every day with people that want to be here. And if you think you’ve found a different place, you should go explore that. It’s really a soft approach. I know it’s not the most popular approach, but that’s just the style that I have.

Louis Diamond:

Yeah. I mean, it sounds like the trend in your career and in launching Claro was we’re going to do things that aren’t popular, but that work for us, like hiring younger advisors that may not have a book or have a small book, buying a tech company instead of licensing it, being 1099 when you’re recruiting instead of owning books of business. There’s a series of decisions you’ve made as the business owner that they’ve worked out, they’ve paid off, but they’re definitely against the grain. And I very much respect that.

Ryan Belanger:

I really have never been afraid to be a little different, and so I think typically you find other people that might be interested, but it’s a big pool out there. There’s 300,000 advisors so there’s something for everyone, which is awesome.

Louis Diamond:

Totally agree.

Let’s get back to the AI platform that you’ve built, or that you’re building. Maybe give a real tangible example. If I’m a Claro advisor, how has my life changed now that I’m using this platform versus before? So the old model was I log in, like you said, to 10 different Chrome tabs. I’m meeting with clients, doing planning, et cetera. What is the day in the life? How does it look different from what an advisor’s actually doing today versus before this platform was rolled out?

Ryan Belanger:

Yeah. All right. I’ll just give you a couple examples. So a client will send you a request and say, “Louis, I need $25,000.” And so a typical advisor would either write a note down, go drop it off at the CSA’s desk, or maybe forward that email to the CSA and then that person would have to input it into their CRM, and they go perform the task. And then the advisor would want to know where things are in that process so that there’s a lot of back and forth. With our system, Claire, our intelligent chief of staff, AI chief of staff, you just forward that task to [email protected]. It recognizes the email address that the client is emailing from, it knows the account number. It talks to our portfolio engineer. It knows which account to raise the cash from because it knows the tax jurisdiction, and otherwise, and it performs the task.

And the last push of a button is that CSA just moving money from the custodian. So all along the way, the advisor can check on the task and see where it is in the process. It’s beautifully integrated in the intelligent hub, but you could see how that would save a tremendous amount of time and it’s a better customer experience. The mistakes get limited. So it really allows the advisor to get things done at a much higher level. So we’re raising productivity quite a bit.

First of all, she’ll establish your meetings, Claire will. So she’ll schedule them for you. She’ll prep them for you. So we have a button, say prep the meeting because we have all the notes, emails. If you’re texting portfolio data, because she has all that information in about 30 to 45 seconds, she’s going to present to the advisor a really nice meeting summary that, “Hey, here’s the things that we should talk about.”

She’s going to surface things that the advisor’s forgotten about because she doesn’t forget things. And so she’s prepped the meeting for you, so you’ve saved a couple hours there. She joins the meeting, she takes all of your notes, stores them in the system. She’ll give you a follow-up email. She knows your writing style, so she’ll know that you like to call this client this, and you send these emails typically at this time. And so she’ll deliver a nice follow-up email instantly for the advisor. They click that button, that’s done. So there’s just a lot of things that where she’s efficiency-wise where on 20, 30 hours a week that we’re saving advisors just on the productivity tools alone, so that’s where we’re seeing advisors seeing a ton of value in this.

Louis Diamond:

It’s very cool.

Ryan Belanger:

And then there’s a whole portfolio management capabilities, sweeping idle cash and tax loss harvesting and rebalancing that gets done while advisors are having a cup of coffee. They don’t have to think about these things. It just gets done for them.

Louis Diamond:

It’s so cool because it’s like I think I can conceptualize or think of building in Claude any one of those functionalities for the most part, but the way that the flow of things works and the journey of it is unique. I think every advisor would be interested in that type of promise of saving that much time. So how do you think now in the future, how do you think about the human advisor interaction, and what the human and the advisor will do versus what can be offloaded to AI?

Ryan Belanger:

Yeah, certainly a lot of the non-client-facing activity can be unloaded and that’s where advisors spend, according to recent studies, almost 60% of their time non-client-facing. So we’re trying to take all that off of their plates for them. We strongly believe clients still want the message to come from a person that has a level of experience and understands them. But at the same point, I think there’s a growing curiosity about, geez, what could it do for me? And so shouldn’t my advisor know how to use it?

And so I think you’re seeing a lot of advisors put their head in the sand and say, “I don’t know. I’m just going to hope people don’t really want to use this and adopt it.” They’re a little bit shortsighted there. Our bet is that clients are going to want an advisor that knows how to use tech, has really sophisticated tech, but it isn’t just another tool layered on top that now my data is in that tool. The reason our system is so beautiful and integrated is because it captures everything in a structured and secure way.

So all of the compliance is in there. We whitewash all the PII that’s sensitive information, so we’re not layering another tool on, because it’s integrated, we have an AI governance committee that really takes it seriously. How are we using this information? And so we’ve got an approach and we’ve put guardrails around what it can do and what it can’t do. Might there be a generation, Louis, that wants an AI advisor? I don’t know, that could happen. A twin, a digital twin where you say, “Look, I want to talk to Louis.” It’s 10 o’clock at night. He might be in a different time zone than me.

He’s got little kids, but I do have this question. And so we’re iterating ideas on how we can surface that for an advisor to be advisable 24/7 without actually having to be available 24/7.

Louis Diamond:

Seven. It’s amazing to think about. I mean, obviously you’re deeply in this. You have a front row seat into the power of AI, how it’s transforming your business, doing due diligence on acquiring this technology five years from now, 10 years from now, what does the industry look like as a result of AI? What’s your big bet?

Ryan Belanger:

A lot of the big firms are going to try to figure out how to layer in tech. It’s going to be very difficult to do that. It’s built on extremely old legacy technology. They’ll be slow. They’ll figure out how to do some things. What we’re already seeing from advisors is the wow factor. Wow, I didn’t know this was even possible, and so I think just given our size and where we are, we have an advantage that we can build things from the ground up very quickly. I mean, what used to take an engineer a couple of months or years can be done in a couple of days or weeks, so things have really sped up in terms of the development.

It’s much easier to build it than buy it. And so I think you’ll see a lot of firms trying to do what we’ve done, really build proprietary technology. And I think there’ll be a few winners that are able to do that, but being tech forward and aligned with someone who’s thinking about it, I think is what a lot of advisors are going to want to be. That’s the type of firm people would want to partner with, I think.

Louis Diamond:

What about the dynamic of, like you said, the digital twin thing is equal parts cool as it is terrifying, how do you see, we’ll say the threat of AI impacting the profession of being a financial advisor? Do you look at it as the entire pie is going to grow because everyone’s more efficient? Or do you look at it as it’s going to take out a lot of the advisor capacity we have because it’s no longer necessary? Where do you fall on that spectrum?

Ryan Belanger:

So robo-advisors came and went, you remember those. I mean, not that they went, but they never took off the way that it was projected. They’re still great businesses, but the human advisor won that battle. Clients do want an advisor, particularly at the higher end, and so I think at the lower end of the market, you’re going to see some AI solutions where people are perfectly comfortable just talking to someone in AI, and they’ll figure out if there’s a hallucinization or not. But I think there’s definitely going to be a market for it, and so I think it just depends on where the clients are and what level of complexity they have. On the higher end, I do feel like the advisors will continue to have a huge advantage there. But we’re building tools to give optionality to advisors. There might be some advisors who say, “Look, I’ll charge half the fee that I used to charge so you can get my digital twin. And that’s a win-win situation for everybody.”

Louis Diamond:

Yep, that’s fair. So do you look at your competitive ecosystem now? Not for recruiting advisors, let’s say for winning clients. Do you look at Farther and Savvy and different AI or FinTechs as your competition or do you still look at it as the wirehouses and other traditional RIAs?

Ryan Belanger:

I mean, Farther and Savvy have done a great job of going after this market. I think we’re not as well known yet as they are. We’ve certainly built out what we think is tremendous technology second to none. There’s a huge market of the IBD space that is just these guys and gals are stuck on these old platforms and things are okay, but they’re not super compelled to switch until maybe they see something like this, and so we have a massive pipeline of advisors and I’ve been recruiting for a long time. I’ve never had a pipeline like this.

So I know it feels different to me. People really are interested in this. It’s enough for them to want to see tech demos and come visit us and really understand, okay, this is a firm that is challenging what’s possible and that’s someone that maybe I want to be aligned with, and so I think that there’s a lot of places where we can get the talent. And so for us, it’s just trying to find the right people that we want to partner with for the long term.

Louis Diamond:

Very cool, I got two more questions for you. It’s pretty remarkable that to get from where you started to now, the recruiting you’ve done, buying a FinTech, integrating it, that you still don’t have private equity investor outside capital. So you think it’s on the roadmap, whether it’s a certain size or you’re looking for personal liquidity where the business will just need it because it’s expensive to operate a FinTech platform and to scale up and to keep growing the firm. Do you think there’s a world in which you take on external capital to fuel your growth?

Ryan Belanger:

Most certainly. I mean, things have developed for us very quickly here, and outside capital and venture particular is a space that we’re actively in discussions with firms that believe in our vision, understand the value that we can create, and there’s just no doubt that you have to have some wind at your back to get to the market, and so while we’re not a household name right now, I’m confident in two years we will be, and our plan is to grow to hundreds and thousands of advisors across the country.

Louis Diamond:

Wow, big vision, but I love it. Last question for you. If you were 30 years old again, which I think everyone would kill for that opportunity, leaving Morgan Stanley today instead of in 2012, what do you think you would do differently knowing what you know now?

Ryan Belanger:

At that point, interest rates were near zero, Louis. Valuations you remember were two to three times revenue. It felt expensive then. Obviously things have changed quite a bit. So I would’ve begged, borrowed, and stole all the money I could from friends and family and said, “I need to buy as many businesses as I could at two times, three times revenue and pay, I don’t know, 3% loan.”

Just in hindsight, that’s what everyone should have done. That’s not the path that we chose, but I think there’s a huge opportunity in front of us to elevate financial advice across the country, make really good advisors even better by putting that super cape on them. And so we’re very excited about the future, what we’ve got in store, and what we’re going to deliver to the market. And it seems like just yesterday that I walked out of Morgan Stanley with very little assets and tried to start this RIA, but I’m very thankful for all the people that have been supporting me throughout this journey.

Louis Diamond:

Amazing. And that’s a great spot to end, but let me ask the inverse of that question. Let’s say you leave in 2026, so leave today, you’re 30 years old, but you have the benefit of hindsight. You know what you know now. What would you do differently around the transition or building the firm other than of course be amazing if you can buy businesses for a fraction of what they cost today?

Ryan Belanger:

I would want to make sure that I’ve got an integrated solution. I don’t want to be picking a bunch of different vendor tools. I know that’s going to become way too time-consuming for me. So I would really try to figure out how you can get something that’s integrated that can scale, but I wouldn’t change anything about the people. I think you got to be able to connect with people that are like-minded and you still take the risk. What I can’t believe, Louis, is that people that sit at the wirehouses take a home team discount and they’re so fearful of leaving Morgan Stanley or Merrill Lynch or UBS, but why are they taking that?

The market says you should be paid double what you paid. And it’s not just like that’s 20, 30 years of data here that show that. And so I just would keep pushing people to bet on yourself. Your clients will come with you. Yes, that firm that you love will be the first ones to try to steal your clients. They’re going to call them, and that’s one way, loyalty. Another thing I don’t understand, but that’s the way the business is structured. I think there’s a huge opportunity to just educate advisors about what’s out there and I would take the risk.

Louis Diamond:

Love it.

Ryan, this has been very fun. What you’ve accomplished, like I said earlier, gone against the grain at every turn. Leaving on the younger side without a huge business, buying and integrating a technology company, recruiting younger advisors without books of business. Every single thing you’ve done has been a different playbook. So I’m pumped to watch how we make Claro a household name and how this approach is going to pay off in spade. So I appreciate hearing this different perspective, and I know our listeners did as well, so much appreciated today.

Ryan Belanger:

Well, thanks for having me on. I know it’s a long time coming. Thanks for your patience. I wanted to make sure we had something really exciting to talk about when we finally did this, and hopefully I can come back in a couple years and catch up. And congratulations on everything you guys have built. You guys are just a premier name out there, and it’s been fun to watch your success as well.

Louis Diamond:

Thank you, Ryan, I appreciate it.

Mindy Diamond:

As a financial advisor, you hold yourself to the highest standards of integrity, honesty, and credibility. You are successful because you take your professional responsibilities seriously and are dedicated to your clients. But are you living your best business life? Are your goals aligned with your firms or could a better option exist? Should I Stay or Should I Go? is a book written with you in mind. It’s a self-guided journey that walks you through the key steps that we take with our advisor clients. This strategic thought process and roadmap to professional self-discovery is designed to help you ask the right questions and think critically and objectively whether you’re considering change or not. Learn how to get your copy at diamond-consultants.com/thebook.

Why AI Matters Now: How a $1.5B RIA is Building the Firm of the Future

A conversation with Louis Diamond and Ryan Belanger, Founder & CEO of Claro Advisors.     

Louis Diamond:

Welcome to the latest episode of our podcast series for financial advisors. Today’s episode is Why AI Matters Now: How a $1.5B RIA is Building the Firm of the Future. It’s a conversation with Ryan Belanger, the Founder and CEO of Claro Advisors. I’m Louis Diamond, and this is the Diamond Podcast for Financial Advisors.

Mindy Diamond:

At Diamond Consultants, we help elite advisors identify the right environment for their businesses to thrive, whether that’s at a wirehouse, boutique, or independent firm. With nearly three decades of experience, we’ve guided thousands of advisors and represented more than a quarter of a trillion dollars in assets transitioned. And each year, one in four advisors managing a billion dollars or more who change firms are our clients. Our process is education driven, and based on building relationships, starting as your strategic partner well before you’re even thinking of a move. To schedule a confidential conversation, call us at (908) 879-1002.

Wondering why advisors change firms and where they’re headed? Are transition deals going up or down? Those very questions and more inspired us to create our annual Advisor Transition Report. It’s the award-winning data-driven resource designed for advisors that connects the dots between the motivations around movement and the firm’s appetite for top talent. Arm yourself with the knowledge you need to make smart decisions. Download your copy at diamond-consultants.com/transitionreport.

Louis Diamond:

Artificial intelligence has quickly become one of the biggest topics in wealth management in the world. Almost every firm is experimenting with new tools, looking for ways to automate tasks, improve efficiency, or help advisors serve clients more effectively. But what if AI isn’t just another technology to plug into your business? What if it becomes the foundation for how your business is built? That’s exactly why I wanted to have Ryan Belanger on the show. Ryan is the Founder and CEO of Claro Advisors, a billion and a half dollar RIA that’s taken a very different path than most firms in the industry. Rather than simply adding AI to an existing tech stack, Claro acquired a FinTech company and is building its own AI native operating system designed specifically for advisors.

What’s interesting is that this isn’t really a conversation about software, it’s about strategy. Ryan has consistently gone against the grain from leaving Morgan Stanley to launch an independent firm in 2012 before it became commonplace, to recruiting younger advisors when others chased established producers, to betting that proprietary technology will become one of the biggest competitive advantages an advisory firm can have.

If AI is going to reshape wealth management, and I think it will, the firms that benefit most may not be the ones using the most tools. They may be the ones rethinking how the entire business operates. Ryan shares what that looks like in practice, what he’s seeing from advisors today, and why he believes the next generation of advisory firms will look fundamentally different from the firms we’ve known over the last two decades. There’s a lot to cover, so let’s get to it.

Ryan, thanks for joining us today.

Ryan Belanger:

Yeah, nice to see you.

Louis Diamond:

You too, good to see you again. For those who aren’t familiar with you and your firm Claro, why don’t you walk us through your background and how you found your way into the industry to set the table.

Ryan Belanger:

Yeah, sounds good. So background was after college, I got a job at Morgan Stanley. I’d done an internship while in college and that gentleman, Morgan Dewey, said you should look at the Morgan Stanley. So I applied, got a job immediately, and just a couple weeks after graduating, I began as a financial advisor in a training program at Morgan Stanley and spent a good amount of time there and was able to develop skills necessary that really I had all along just growing up, a lot of entrepreneurial spirit I think is important in this business, how to relate to people, some competitiveness. I just happened to luck out and get into a profession that rewarded some of those skill sets.

Louis Diamond:

I’d say it was the right choice for you. So I think you started at Morgan Stanley in 2004. You were 21, 22 years old, just cutting your teeth, but the financial crisis happens a handful of years later. So what was it like being a relative newbie and seeing client accounts falling, the world crumbling every day? What did living through that crash teach you that’s shaped how you’ve built your business or serve clients now?

Ryan Belanger:

I did learn a tremendous amount at Morgan Stanley and I do still tell people if they’re looking to start at a big shop with big training programs and resources and really try to figure out what you like and then you can go off and get more specialized. But I do feel like it was a great place to get trained. They would post how many cold calls we were making every day. So on the board every morning you’d walk in and say, “Okay, where did you fall?”

And I’m a competitive person, and I just want to make sure I was first every single day. So it was those type of things that really propelled me to keep interested in this business but also see the benefits. It’s really hard to get clients and that’s what people underestimate the most is to build the level of trust with someone that they’ll allow you to manage their retirement nest egg is it takes time. And I was 22, I looked really young, I had no experience, but I was fortunate to have two great mentors at Morgan Stanley, a gentleman named Todd Wetzel. He was brilliant at developing relationships, really caring for people.

And then the gentleman that I had done an internship with went to Morgan Stanley as well, and he allowed me to work on some small accounts and really cut my teeth with some customers. And I was very fortunate to have done that, but you’d asked about the crash, and I think what I learned from that when people were literally weeping when their account values were down by 50%, 60% was that money is really emotional, and you have to understand how much it means to people, it’s not just the number on your screen. So having some empathy towards someone who’s really in a period of distress is now a critical skill that those of us have been around for this long understand.

And there’s a whole generation, Louis, of advisors that have never experienced a real bear market, and I do fear for them at some point because when you go through that, it really changes the perspective that you have. But for me, it happened, I was four or five years into the business at that point, so I’m thankful that it happened just for my own personal development and I’ll never forget it.

Louis Diamond:

Yeah. Things have a way of happening for a reason and then the best advisors, best humans, they learn from them, and they’re better off for it. You’re very much right. I like that perspective about how the empathy around the emotions of money was something that you still carry and wear as a badge of honor today. So you left Morgan Stanley in 2012. I think you were 30 years old I read.

One, that’s very young to consider leaving a firm like that nonetheless to go independent when in 2012, it wasn’t like everyone was going independent. There weren’t as many infrastructure providers or tech vendors or as much capital available as there is today. It definitely wasn’t a path that was as well-worn as it was. So two-part question, what pushed you to leave the firm presumably without a huge book of business? And second part, how’d you think about risk and reward at that age?

Ryan Belanger:

Yeah, what drove me was ultimately I felt like I was not seeing the value from the firm I was at, Morgan Stanley at the time. They were just taking an exorbitant amount of the revenue I felt. And I would see product managers strolling through and going to steak dinners, and I’m thinking, geez, I’m here every night on weekends. I’m busting my butt, and I should be creating more value to myself. And so that was one kind of thing. And I think there was a right level of naivete just to think that I could pull this off.

I did believe that I had a small number of clients. I was hopeful that they would come because I had to hit a minimum for the custodian platform to start the RIA, which I was able to do. But I felt that they would come with me and that I had developed enough trust with them that I could be their advisor for a long time. And so for me, it felt like the technology wasn’t great. I was just told the mother-in-law is an expression. She says to my kids sometimes, “You get what you get and you don’t get upset.” Have you heard that expression?

Louis Diamond:

I have. My daughter reads a book where that line is repeated frequently.

Ryan Belanger:

Yeah, okay. So that’s how I felt then. I was like, “This is what you have and deal with it.” And to me, it just felt like there had to be a better way, but I didn’t have any capital backing, so I bootstrapped it. I Craigslisted an office from an estate planning attorney. I cold called Fidelity at the time they were our only custodian. I called to get some compliance help and I just thought that there’d be other people that would want to join. I named the firm, it’s a Latin phrase, it’s Claro Advisors, and it means to make clear in the mind. And I felt like not only was I trying to do that for clients, but I was trying to push advisors to challenge the norms here.

There are other solutions out there. So I purposefully did put my name on it, I knew that there’d be other people that might feel the same way. I’ve always been a team sport guy. I like being around other people and collaborating. And I did have a good friend and credit to him. He said, “If you put this together, I’ll come with you.”

And so just a couple weeks after I did, we talked and I said, “It’s up and running.” He came and Dana was our first, he’s still with us.

And then a couple of months later, another guy I used to work with called and said, “Hey, I’m at this bank, and it looks like what you’ve done is interesting.”

And I said, “We like it if you’d like to give it a try.” And so he came, his name’s Mike. He’s still with us. And so teams started to get put together.

But I met someone in 2014, so I was two years in at that point and I was doing legitimately everything, not only as an advisor, but just all the stuff that you have to do to run the business. And it was becoming too much, especially the compliance. And I think nowadays starting an RIA, the threshold is so much higher. That’s why you see better than anyone else. You just see a lot more tuck-ins. But Jen Street was someone that I met and she really allowed me to catapult the business and scale it, so she took over all the operations and compliance and that really freed me up to be an advisor. And I really was just an advisor moonlighting as someone running. I would recruit a little bit or just be introductions, very soft. All that has changed based on what we’ve done in the last couple of years.

Louis Diamond:

Amazing. So thinking about risk spectrum, obviously now if you look back and say, “Hey, I had 30 million or whatever it was, I didn’t have anything to lose.” Right?

But when you’re in it and you had income, you had recurring revenue, you had a paycheck versus the dynamic of, “I’m going to incur a bunch of expenses. I’m not positive who’s going to come with me. I’m not going to have a paycheck for a period of time.”

Did the fact that your business was relatively small and you were just getting up and running, do you think it made it easier for you to reconcile that risk, or in some ways it was harder because your dispersion, if someone didn’t come, was that much higher?

Ryan Belanger:

I think it was easier for me, I knew I could always go to another firm. They would take me and whatever clients I had. I did it at a time when I had little personal risk, no kids, no mortgage. I didn’t have a wife at that point. So for me, it felt like the right time to take a risk. And I had been entrepreneurial in my life. I mean, I had a business in high school and my parents and grandparents were entrepreneurial. So that was in me, even if I didn’t really recognize it, was that I was okay with a good level of risk. And I do say this now to anyone that I’m hoping to partner with is that if you want to bet on yourself, I’ll go all in on you too.

But you’ve got to be able to take that jump. I won’t let you fail, but you’ve got to be the one. I think that inertia is what a lot of advisors are like, “Geez, I don’t know, I got to give something up.” And that’s why the data’s important and you have all the data. The clients overwhelmingly go with the advisor. These days it’s just much harder to try to establish a new relationship with a trusted advisor than it is to just DocuSign some forms and move your account somewhere.

So to me, it’s just trying to support people, and really push them to the edge and say, “No, this is possible. You should definitely explore this.” And I get it’s totally different, and you might be at a different life stage, but you know the numbers. I mean, tens of thousands of advisors are moving every year and not all of them have a small book like I did when I did it.

Louis Diamond:

Right, exactly. On one hand, making this entrepreneurial move as early in your career as you did, it was a benefit, right? Because you didn’t have as much to lose, like you said, the stage of life you’re in allowed you to absorb more risk. On the other end of the spectrum, if someone who has a massive business with immense value, they’re well situated financially, maybe their kids are through college, et cetera. And then most people are somewhere in the middle. So it’s interesting hearing that dynamic in real time. Let’s talk about Claro today. So you launched the business, like you said, you had to work hard to meet a minimum custodial threshold. So started from a very small base in 2012, but where is it today as far as assets, team size? Just give us some stats or perspective on what you’ve built in the last decade and a half or so.

Ryan Belanger:

Yeah, sure. So we enjoyed a tremendous amount of organic growth, Louis. We are not capital-backed. We don’t buy books of businesses, so I would recruit or partner with advisors that were coming from all the various places that you could think of that were finding us to be a very friendly place to work where you had a high level of autonomy, freedom, control, just great economics. We stayed out of people’s ways. We were just good people trying to help other good people, and it was just that friendly environment that allowed us to grow. And of course, we can’t discount market. I think markets had a tremendous growth for everybody in the business. And so the business as it stands right now, we’re about 1.5 billion in assets, 15 to 20 advisors. We got a 40-person team based primarily at a Boston headquarter, but we have advisors all over. And I think as we’ll get to, we’ve just gone through a really exciting new chapter for us where the next 15 years are going to look a lot different than the previous 15 years.

Louis Diamond:

Very cool. That’s amazing, and I’m in the recruiting businesses and doing recruiting yourself, it’s not easy to tell your story, get in front of the right people, the right like-minded people too, who are willing to take the leap to you, especially if you don’t have the capital backing and you can’t pay big deals or write big checks like others could, so that’s a massive testament to you and your vision. I know the average age of an advisor at Claro is around 40, yet the average advisor in the industry is 59, 60, 61, depending upon what data source you look at. What do you think you figured out about attracting, training, and really cultivating younger advisors that the rest of the industry either gets wrong or ignores? What’s been your hack in that regard?

Ryan Belanger:

I’ll just take a chance on people that others might not. And typically what that really means is someone with nothing, I’ll make them a deal and I’ll say, “Look, I believe in you. I think you’d be a great advisor. Let’s work on an arrangement where you feel like you can do this and I’ll support you.”

And so our specialty was growing advisors from 20 million or 30 million into hundreds of million of client assets. And some of it was just being willing to look where others wouldn’t possibly want to spend their time. But when I was 22, someone took a chance on me, and so I owe it to the next generation to do that as well because there’s some great talent out there that really just isn’t getting the attention they deserve because they don’t have big books of business yet.

But one of my core values is long-term thinking, and so that’s the way I frame my decisions is it doesn’t have to be a win today, but it can be a championship tomorrow or down three or five years from now. And so that’s how I’ve positioned it. I think that’s why we tend to get younger advisors.

And then what happens when you get a lot of younger advisors, you have some older advisors say, “Hey, look, that’s an attractive bench of talent. I needed a succession plan. You guys seem to have a bunch of guys and gals that know how to do really great work and serve clients.” But I think that’s probably one of the things that I just was willing to take some chances on people at an earlier stage.

Louis Diamond:

Yep. I love it. I mean, once again, you said in the beginning, you developed an empathy for the emotional side of money and what people were going through that you carry through to this day. So not losing touch with the fact that you started. I mean, everyone starts in this business at some time, but I feel like once you’re successful or you’re through the first few years, you forget what it was like to be a newbie. So keeping that perspective and appreciation for the mentors you had, et cetera, is great.

And honestly, from a business building standpoint, to me in this environment, unless you take on private equity capital, or you have capital from a BD or from a wirehouse behind you for recruiting, it’s really hard to win advisors with large books of business. So going in the blue part of the ocean instead of the red ocean, if anyone’s read that book, is very smart, looking under rocks that others don’t or really buying into or leaning into folks that you see something in that you know you can cultivate is a brilliant way. And it’s honestly more scalable, cheaper, you build a better business as well doing it the way that you do, but still, it’s hard. And my guess is the ROI is shorter. I’m sure you’ve made some hires that don’t pan out.

So you have to have the tolerance and the demeanor to really invest in people. So long-winded way to say I love what you’re doing. How much of your recruitment of advisors and the retention of that talent as they become successful would you tie to how you compensate them, or equity if that’s available versus the culture of the firm and the mentorship that you and your team provide?

Ryan Belanger:

Yeah, I mean I’ll speak to what we’re offering now just because that’s more relevant, and so we are positioning ourselves now as the best home for advisors in the country and we really believe that’s the case, but our problem is we’re just a secret. We’ve just come to the market after our deal and all the technology that I know we’ll talk about. So we’re now marketing this message to advisors that want to partner with us. Economics will help them grow. We have a really interesting growth program. We’ll give them equity and Claro. I firmly believe that we should tie each other, just get in the same boat, so to speak. So our success is their success, but allowing them to operate in a 1099 model, which I know is not a popular strategy.

I know everyone wants to buy books and own the assets and own the clients, but I feel there’s a tremendous amount of advisors that do not that probably should not be monetizing their businesses so quickly. And so I’m trying to foster a home for those like-minded advisors that want the autonomy to own their clients, maybe even still have a brand, but partner with a firm that’s got really credible technology, just unbelievable back office support and a firm of the future so that they can grow at 10X to what they could have on their own and then they could monetize. That’s what we’ve tried to put together here with our partnership model.

Louis Diamond:

Love it. Yeah, I mean it is definitely going against the grain a little bit, leaning into growing a 1099 model versus more of an acquisition model where everyone coming over as W-2s. So do you think about those trade-offs when it comes time to raising capital down the line or if you want to sell the business or even just an advisor wants to leave, that would stink if that happened. How do you think about those trade-offs? The ability to let advisors keep control and ownership. And honestly, in my view, probably win many people that you wouldn’t otherwise versus the stickiness, and the enterprise building abilities of owning the books of business.

Ryan Belanger:

Yeah, it’s a paradox because I understand why you want to own the client, but that’s a different business model. And frankly, I think it attracts different type of people. I had to really look myself in the mirror a couple years ago. We had enjoyed a tremendous amount of success, high growth and all organic, growing at 30% more per year on a CAGR basis. Nothing could stop us. But what happened was when private equity entered the space, everyone wanted to buy Claro. And to me, it didn’t feel like I did a lot of due diligence. I talked to a lot of firms. I didn’t see any differentiation in the market, Louis. To me from a technology perspective, everyone was doing the same thing. They’re using six to 12 different tools. We all know who they are. And now there’s a bunch of AI tools they’re layering on. And to me, it just didn’t feel like that was going to be any… There was no differentiation in the market.

But admittedly, I had a couple of friends who I’d brought in at very low levels of AUMB that wanted to leave. And they said, “Look, I want to go to a firm that has more resources.”

And so I had to just make a business decision and say, “Where do I want to take this?”

And so it was only after some real adversity because you get emotionally attached to these people that you’ve developed friendships with and they still are friends, no doubt, but they can leave and they’re not captive. So we have to plan for that at Claro now, and I think we’ve got two ways that we’ve done that where it really ties the advisors to us, but in a way where they want to be here because we have something that’s really different.

Louis Diamond:

I like it. I’m sure we’ll get into that. But before we do, we’ll get into what you’re doing on the technology side, which is very cool and unique. How do you balance being an advisor and being a CEO? And what percentage of your time is advisor versus CEO and has that fluctuated or changed over time?

Ryan Belanger:

Drastically changed in the last year, two years or so. So the first 10, 12 years, I was really an advisor first and foremost. That’s inverse at this point, I’m strictly running the business. I have a great team here that deals with our clients, and I’ll still attend the client meetings and such, but I’m really laser-focused on running the business, trying to develop new partnerships with advisors, running an engineering team, sales and marketing. So the change for me has definitely occurred, and I’ll miss not keeping up with planning as much. I’m a CFP, but I just recognized that for me, I had to make a clear change and commit all my time to running the business, and so that’s the decision that I’ve made.

Louis Diamond:

It is a hard balance. I mean, there’s some people that try to do both, run a business, be an advisor, be a rainmaker, and something breaks. You’re not able to give all yourself to one thing. Then there’s others that would much prefer to be an advisor over a business owner. Others who say, “I’m over being an advisor. I want to be a business owner.”

So I think the cool thing about doing what you’ve done is you get to choose, right? Some of it might be circumstances, but you really got to decide which elements of the business you personally want to invest your time in. And you really push your chips in the middle of the table. So let’s get into what you did in November of 2025. I read that you acquired a tech company of all things called NDVR. I’ve done this podcast for a while, speak to a ton of people. I can’t really think of anyone, any advisor or RIA that’s actually bought a tech company. So what made you puck the trend, buy a tech company and not just license all the FinTech that’s available today?

Ryan Belanger:

Yeah, that was the decision I had to make was do I really want to be different, or do I want to just say that I’m different? And so I was fortunate enough to get introduced to a gentleman named Michael Simon about 18 months ago, two years ago. And him and I immediately could see that we were both trying to solve the same problem, and we had perfectly mirrored image skills of one another so I had this deep wealth experience and he had a deep tech experience.

And sometimes it’s just about timing in life, about catching someone at the right time. And I think we each caught each other at a really good time where we could see that coming together, we could create something really magical. And this AI wave was cresting. And I could see when I was talking to all the national PE firms or RIA firms about what people wanted to do, no one had quite figured out how AI was going to come into the technology mix, and it appears as though it’s just going to be another add-on tool to everything else.

And for me, I wanted to try to build something that was integrated an all- in-one platform for an advisor so they didn’t have to use a ton of different tools. And I thought if you could do that, couldn’t you have AI that’s really much more rich and purposeful to help the clients? And so I felt like here’s an opportunity to elevate financial advice throughout the country, really give the clients all the value. And so what we’ve built allows advisors who are really good advisors to become super advisors because they’ve got this technology cape that no one else has that is allowing them to save a bunch of time and do all these really cool things for their clients. But it just felt like right time, right place. I’d been through a little bit of adversity and I felt like taking another swing just like I did 15 years ago going for it. I’ve really never been averse to risk, and so this felt like it was too good to pass up and so we went for it.

Louis Diamond:

Interesting. So that makes sense on the build or acquire versus rent dynamic, wanting to own the IP that makes you actually different. What does NDVR actually do?

Ryan Belanger:

Yeah, so everything’s all integrated. So we’ve kept the Claro Advisors name. We feel like clients really want to know that they’re still getting a person to deliver the advice. And so having the advisor’s name in our brand is important, but we have a Claro Intelligent Hub, and that’s where it’s an AI native operating system for the advisors. They spend their entire day in there, Louis. So they’re not toggling between 10 different Chrome tasks to perform all their business. And so what that allows them to do is not only it’s CRM, calendar, contacts, emails, messages, but we also have all the portfolio information. So trading history and we can do tax loss harvesting and factor-based investing.

So we’ve got institutional grade portfolio management, and that’s really what Endeavor had created through their R&D was the hyper-personalized portfolios where you have a customer’s financial plan directly tied to their account. So there’s never any de-linking between the two. It’s really sophisticated technology that we can provide to our clients. So that’s all integrated as well. And so we’ve since continued to build the build upon that layer of integrated proprietary technology.

Louis Diamond:

It’s very interesting. And we have to imagine part of you maybe now or in the future is, okay, we’ve built this amazing technology mousetrap for our advisors, but do we become a FinTech? Is there any thought of eventually licensing what Endeavor is doing for your business and your clients to other RIAs? How do you think about that dynamic of just building something unique and different for Claro that advisors can latch onto versus making what you and your partners have developed into something that someone else can take and license themselves?

Ryan Belanger:

Yeah, it’s a fair question. We get it a good amount. While there might be a possibility that we license this to some other businesses, our main goal right now is to keep it captive to RIAs that want to partner with Claro. And so we feel like this gives them a true level of differentiation in the market, and so that’s the approach that we’re taking right now. Being a FinTech company, there’s a lot of different skills. The setup and tear down of getting someone to use the platform and I think all that time and resources we want on sales and marketing to try to attract new advisors and continue to develop just jaw-dropping technology for the existing advisors.

Louis Diamond:

Very cool. Let’s talk a little bit about your partnership model. So it does sound unique in that you have people that are 1099, but you don’t usually also hear partner. So how does it work?

Ryan Belanger:

Yeah, so we’re offering advisors to come and use Claro as a back office so you can have your own brand if you want or you can just be a Claro advisor. We have both here and you’ll be a 1099 advisor so you’ll still own the business that you’ve owned. So if you were at a wirehouse or something, you would actually now be creating some enterprise value for yourself. But if you’re an existing REA, you’d be coming to us because you’re tired of doing tech vendor due diligence all the time or you’re tired of the compliance, the AI regulations. That’s just coming. So that’s going to be a huge challenge for REAs, so we’re seeing a lot of interest from REAs saying, “Look, you’re not asking me to give up really anything except the stuff that I hate to do anyway, so this sounds great.” So they partner with us.

In return, they get all access to our technology And we’ll provide all the back office support, office space, dedicated resources, planning, everything you could want to have to operate a business. We do have a growth program that’s really interesting. And then we’ve got this equity in Claro. As you’re a partner with Claro, you should get equity so we give stock options to our advisors who are here and every year thereafter. And naturally, that’s a way to stay connected with the advisor. So hopefully they never want to leave, and I do believe that once you experience our technology, you never want to go back to trying to do it the way you were doing it before.

Louis Diamond:

It’s like instead of building the most enclosed box that you keep people in with sticks and with locks and keys like a lot of firms do, it’s we’re going to keep advisors here, but not by force, but because they have the stock options, because you’re delivering value, because they have this amazing technology. To me, that’s the dynamic that so many firms across the industry get wrong is that they try to keep advisors where they are by restrictive covenants and by fear, and by retribution rather than if we just do good work for people, we add value, we make ourselves indispensable to the advisor. To me, it creates a healthier dynamic. I think firms would actually retain more even if it’s a gentler approach.

And I love what you’re doing there. I think it’s the exact right way to think about we have advisors that are 1099, so yeah, they could leave us, but we’re doing things that make it that they don’t want to leave us. And that’s your charge as the owner to create the infrastructure and the structure where people could go out on their own, but there isn’t an advantage to do so.

Ryan Belanger:

Yeah, I think the culture is a big thing for us. And if you have people here that don’t want to be here, that’s a problem. And I think that’s what you see in a lot of the wirehouses. Frankly, they scare people and they don’t. It’s like, oh my God, if I leave. And for us, it’s like personally, life is too short. I want to work with people that want to work with me. I’ve got other things going on in my life and these things are just work things. And so I want to enjoy being in the office every day with people that want to be here. And if you think you’ve found a different place, you should go explore that. It’s really a soft approach. I know it’s not the most popular approach, but that’s just the style that I have.

Louis Diamond:

Yeah. I mean, it sounds like the trend in your career and in launching Claro was we’re going to do things that aren’t popular, but that work for us, like hiring younger advisors that may not have a book or have a small book, buying a tech company instead of licensing it, being 1099 when you’re recruiting instead of owning books of business. There’s a series of decisions you’ve made as the business owner that they’ve worked out, they’ve paid off, but they’re definitely against the grain. And I very much respect that.

Ryan Belanger:

I really have never been afraid to be a little different, and so I think typically you find other people that might be interested, but it’s a big pool out there. There’s 300,000 advisors so there’s something for everyone, which is awesome.

Louis Diamond:

Totally agree.

Let’s get back to the AI platform that you’ve built, or that you’re building. Maybe give a real tangible example. If I’m a Claro advisor, how has my life changed now that I’m using this platform versus before? So the old model was I log in, like you said, to 10 different Chrome tabs. I’m meeting with clients, doing planning, et cetera. What is the day in the life? How does it look different from what an advisor’s actually doing today versus before this platform was rolled out?

Ryan Belanger:

Yeah. All right. I’ll just give you a couple examples. So a client will send you a request and say, “Louis, I need $25,000.” And so a typical advisor would either write a note down, go drop it off at the CSA’s desk, or maybe forward that email to the CSA and then that person would have to input it into their CRM, and they go perform the task. And then the advisor would want to know where things are in that process so that there’s a lot of back and forth. With our system, Claire, our intelligent chief of staff, AI chief of staff, you just forward that task to [email protected]. It recognizes the email address that the client is emailing from, it knows the account number. It talks to our portfolio engineer. It knows which account to raise the cash from because it knows the tax jurisdiction, and otherwise, and it performs the task.

And the last push of a button is that CSA just moving money from the custodian. So all along the way, the advisor can check on the task and see where it is in the process. It’s beautifully integrated in the intelligent hub, but you could see how that would save a tremendous amount of time and it’s a better customer experience. The mistakes get limited. So it really allows the advisor to get things done at a much higher level. So we’re raising productivity quite a bit.

First of all, she’ll establish your meetings, Claire will. So she’ll schedule them for you. She’ll prep them for you. So we have a button, say prep the meeting because we have all the notes, emails. If you’re texting portfolio data, because she has all that information in about 30 to 45 seconds, she’s going to present to the advisor a really nice meeting summary that, “Hey, here’s the things that we should talk about.”

She’s going to surface things that the advisor’s forgotten about because she doesn’t forget things. And so she’s prepped the meeting for you, so you’ve saved a couple hours there. She joins the meeting, she takes all of your notes, stores them in the system. She’ll give you a follow-up email. She knows your writing style, so she’ll know that you like to call this client this, and you send these emails typically at this time. And so she’ll deliver a nice follow-up email instantly for the advisor. They click that button, that’s done. So there’s just a lot of things that where she’s efficiency-wise where on 20, 30 hours a week that we’re saving advisors just on the productivity tools alone, so that’s where we’re seeing advisors seeing a ton of value in this.

Louis Diamond:

It’s very cool.

Ryan Belanger:

And then there’s a whole portfolio management capabilities, sweeping idle cash and tax loss harvesting and rebalancing that gets done while advisors are having a cup of coffee. They don’t have to think about these things. It just gets done for them.

Louis Diamond:

It’s so cool because it’s like I think I can conceptualize or think of building in Claude any one of those functionalities for the most part, but the way that the flow of things works and the journey of it is unique. I think every advisor would be interested in that type of promise of saving that much time. So how do you think now in the future, how do you think about the human advisor interaction, and what the human and the advisor will do versus what can be offloaded to AI?

Ryan Belanger:

Yeah, certainly a lot of the non-client-facing activity can be unloaded and that’s where advisors spend, according to recent studies, almost 60% of their time non-client-facing. So we’re trying to take all that off of their plates for them. We strongly believe clients still want the message to come from a person that has a level of experience and understands them. But at the same point, I think there’s a growing curiosity about, geez, what could it do for me? And so shouldn’t my advisor know how to use it?

And so I think you’re seeing a lot of advisors put their head in the sand and say, “I don’t know. I’m just going to hope people don’t really want to use this and adopt it.” They’re a little bit shortsighted there. Our bet is that clients are going to want an advisor that knows how to use tech, has really sophisticated tech, but it isn’t just another tool layered on top that now my data is in that tool. The reason our system is so beautiful and integrated is because it captures everything in a structured and secure way.

So all of the compliance is in there. We whitewash all the PII that’s sensitive information, so we’re not layering another tool on, because it’s integrated, we have an AI governance committee that really takes it seriously. How are we using this information? And so we’ve got an approach and we’ve put guardrails around what it can do and what it can’t do. Might there be a generation, Louis, that wants an AI advisor? I don’t know, that could happen. A twin, a digital twin where you say, “Look, I want to talk to Louis.” It’s 10 o’clock at night. He might be in a different time zone than me.

He’s got little kids, but I do have this question. And so we’re iterating ideas on how we can surface that for an advisor to be advisable 24/7 without actually having to be available 24/7.

Louis Diamond:

Seven. It’s amazing to think about. I mean, obviously you’re deeply in this. You have a front row seat into the power of AI, how it’s transforming your business, doing due diligence on acquiring this technology five years from now, 10 years from now, what does the industry look like as a result of AI? What’s your big bet?

Ryan Belanger:

A lot of the big firms are going to try to figure out how to layer in tech. It’s going to be very difficult to do that. It’s built on extremely old legacy technology. They’ll be slow. They’ll figure out how to do some things. What we’re already seeing from advisors is the wow factor. Wow, I didn’t know this was even possible, and so I think just given our size and where we are, we have an advantage that we can build things from the ground up very quickly. I mean, what used to take an engineer a couple of months or years can be done in a couple of days or weeks, so things have really sped up in terms of the development.

It’s much easier to build it than buy it. And so I think you’ll see a lot of firms trying to do what we’ve done, really build proprietary technology. And I think there’ll be a few winners that are able to do that, but being tech forward and aligned with someone who’s thinking about it, I think is what a lot of advisors are going to want to be. That’s the type of firm people would want to partner with, I think.

Louis Diamond:

What about the dynamic of, like you said, the digital twin thing is equal parts cool as it is terrifying, how do you see, we’ll say the threat of AI impacting the profession of being a financial advisor? Do you look at it as the entire pie is going to grow because everyone’s more efficient? Or do you look at it as it’s going to take out a lot of the advisor capacity we have because it’s no longer necessary? Where do you fall on that spectrum?

Ryan Belanger:

So robo-advisors came and went, you remember those. I mean, not that they went, but they never took off the way that it was projected. They’re still great businesses, but the human advisor won that battle. Clients do want an advisor, particularly at the higher end, and so I think at the lower end of the market, you’re going to see some AI solutions where people are perfectly comfortable just talking to someone in AI, and they’ll figure out if there’s a hallucinization or not. But I think there’s definitely going to be a market for it, and so I think it just depends on where the clients are and what level of complexity they have. On the higher end, I do feel like the advisors will continue to have a huge advantage there. But we’re building tools to give optionality to advisors. There might be some advisors who say, “Look, I’ll charge half the fee that I used to charge so you can get my digital twin. And that’s a win-win situation for everybody.”

Louis Diamond:

Yep, that’s fair. So do you look at your competitive ecosystem now? Not for recruiting advisors, let’s say for winning clients. Do you look at Farther and Savvy and different AI or FinTechs as your competition or do you still look at it as the wirehouses and other traditional RIAs?

Ryan Belanger:

I mean, Farther and Savvy have done a great job of going after this market. I think we’re not as well known yet as they are. We’ve certainly built out what we think is tremendous technology second to none. There’s a huge market of the IBD space that is just these guys and gals are stuck on these old platforms and things are okay, but they’re not super compelled to switch until maybe they see something like this, and so we have a massive pipeline of advisors and I’ve been recruiting for a long time. I’ve never had a pipeline like this.

So I know it feels different to me. People really are interested in this. It’s enough for them to want to see tech demos and come visit us and really understand, okay, this is a firm that is challenging what’s possible and that’s someone that maybe I want to be aligned with, and so I think that there’s a lot of places where we can get the talent. And so for us, it’s just trying to find the right people that we want to partner with for the long term.

Louis Diamond:

Very cool, I got two more questions for you. It’s pretty remarkable that to get from where you started to now, the recruiting you’ve done, buying a FinTech, integrating it, that you still don’t have private equity investor outside capital. So you think it’s on the roadmap, whether it’s a certain size or you’re looking for personal liquidity where the business will just need it because it’s expensive to operate a FinTech platform and to scale up and to keep growing the firm. Do you think there’s a world in which you take on external capital to fuel your growth?

Ryan Belanger:

Most certainly. I mean, things have developed for us very quickly here, and outside capital and venture particular is a space that we’re actively in discussions with firms that believe in our vision, understand the value that we can create, and there’s just no doubt that you have to have some wind at your back to get to the market, and so while we’re not a household name right now, I’m confident in two years we will be, and our plan is to grow to hundreds and thousands of advisors across the country.

Louis Diamond:

Wow, big vision, but I love it. Last question for you. If you were 30 years old again, which I think everyone would kill for that opportunity, leaving Morgan Stanley today instead of in 2012, what do you think you would do differently knowing what you know now?

Ryan Belanger:

At that point, interest rates were near zero, Louis. Valuations you remember were two to three times revenue. It felt expensive then. Obviously things have changed quite a bit. So I would’ve begged, borrowed, and stole all the money I could from friends and family and said, “I need to buy as many businesses as I could at two times, three times revenue and pay, I don’t know, 3% loan.”

Just in hindsight, that’s what everyone should have done. That’s not the path that we chose, but I think there’s a huge opportunity in front of us to elevate financial advice across the country, make really good advisors even better by putting that super cape on them. And so we’re very excited about the future, what we’ve got in store, and what we’re going to deliver to the market. And it seems like just yesterday that I walked out of Morgan Stanley with very little assets and tried to start this RIA, but I’m very thankful for all the people that have been supporting me throughout this journey.

Louis Diamond:

Amazing. And that’s a great spot to end, but let me ask the inverse of that question. Let’s say you leave in 2026, so leave today, you’re 30 years old, but you have the benefit of hindsight. You know what you know now. What would you do differently around the transition or building the firm other than of course be amazing if you can buy businesses for a fraction of what they cost today?

Ryan Belanger:

I would want to make sure that I’ve got an integrated solution. I don’t want to be picking a bunch of different vendor tools. I know that’s going to become way too time-consuming for me. So I would really try to figure out how you can get something that’s integrated that can scale, but I wouldn’t change anything about the people. I think you got to be able to connect with people that are like-minded and you still take the risk. What I can’t believe, Louis, is that people that sit at the wirehouses take a home team discount and they’re so fearful of leaving Morgan Stanley or Merrill Lynch or UBS, but why are they taking that?

The market says you should be paid double what you paid. And it’s not just like that’s 20, 30 years of data here that show that. And so I just would keep pushing people to bet on yourself. Your clients will come with you. Yes, that firm that you love will be the first ones to try to steal your clients. They’re going to call them, and that’s one way, loyalty. Another thing I don’t understand, but that’s the way the business is structured. I think there’s a huge opportunity to just educate advisors about what’s out there and I would take the risk.

Louis Diamond:

Love it.

Ryan, this has been very fun. What you’ve accomplished, like I said earlier, gone against the grain at every turn. Leaving on the younger side without a huge business, buying and integrating a technology company, recruiting younger advisors without books of business. Every single thing you’ve done has been a different playbook. So I’m pumped to watch how we make Claro a household name and how this approach is going to pay off in spade. So I appreciate hearing this different perspective, and I know our listeners did as well, so much appreciated today.

Ryan Belanger:

Well, thanks for having me on. I know it’s a long time coming. Thanks for your patience. I wanted to make sure we had something really exciting to talk about when we finally did this, and hopefully I can come back in a couple years and catch up. And congratulations on everything you guys have built. You guys are just a premier name out there, and it’s been fun to watch your success as well.

Louis Diamond:

Thank you, Ryan, I appreciate it.

Mindy Diamond:

As a financial advisor, you hold yourself to the highest standards of integrity, honesty, and credibility. You are successful because you take your professional responsibilities seriously and are dedicated to your clients. But are you living your best business life? Are your goals aligned with your firms or could a better option exist? Should I Stay or Should I Go? is a book written with you in mind. It’s a self-guided journey that walks you through the key steps that we take with our advisor clients. This strategic thought process and roadmap to professional self-discovery is designed to help you ask the right questions and think critically and objectively whether you’re considering change or not. Learn how to get your copy at diamond-consultants.com/thebook.

Louis Diamond and Josh Tomolak unpack today’s IBD vs. RIA landscape, explaining what has changed, where each model excels, and how to determine which path best supports the business you want to build.

The independent wealth management landscape has changed dramatically, making the decision between an independent broker dealer (IBD) and an RIA more nuanced than ever before.

Louis Diamond welcomes Diamond Consultants’ Vice President of Independent Advisor Services, Josh Tomolak, for a practical discussion of how the independent space has evolved, what truly differentiates the IBD and RIA models today, and how advisors can evaluate which path best aligns with the business they want to build.

Not long ago, the decision to become independent was relatively straightforward. Advisors either remained with a traditional firm or pursued independence through one of a limited number of models.

Today, the conversation is far more complex.

Independent broker dealers have significantly expanded their capabilities, offering stronger technology, larger transition packages, greater flexibility, and even pathways to RIA ownership. At the same time, the RIA ecosystem has matured into a sophisticated marketplace supported by multiple custodians, outsourced service providers, institutional capital, and enterprise platforms that rival many of the industry’s largest firms.

As these developments have unfolded, the traditional distinctions between an IBD and an RIA have become less obvious. Advisors evaluating their options are no longer simply asking whether they should become independent—they’re asking which model best supports the clients they serve, the business they envision, and the lifestyle they want to create.

In this Industry Update, Louis and Josh unpack the realities behind the IBD vs. RIA decision. They discuss where the two models overlap, where meaningful differences still exist, and why factors like service, technology, economics, operational responsibility, enterprise value, and long-term optionality often matter more than labels alone.

Whether you’re considering changing independent firms, launching your own RIA, or simply want a better understanding of how the independent landscape has evolved, this conversation provides an objective framework for evaluating today’s choices—and preparing for tomorrow’s opportunities.

> Download a transcript of this episode…

Why are already-independent advisors reconsidering their current model? (5:27)

Josh explains why service, technology, economics, and growing optionality are causing advisors to reevaluate their existing affiliations.

How have independent broker dealers and RIAs become more alike? (19:28)

Louis and Josh discuss the growing convergence between the two models and why the distinction is becoming less obvious than many advisors assume.

What really separates an IBD from an RIA? (25:04)

A practical discussion of autonomy, compliance, flexibility, custody, economics, and advisor experience.

What misconceptions keep advisors from launching an RIA? (36:29)

Josh outlines the “Four Pillars” of launching an RIA and explains where advisors tend to either overestimate or underestimate the operational realities.

Which advisors thrive most in each model? (33:12)

The conversation explores why there isn’t a universally “better” model—only one that’s better aligned with an advisor’s goals.

What trends are quietly reshaping independence? (42:13)

Minority investments, enterprise value, business formation, and changing revenue models may have an even greater impact than advisors realize today.

https://youtu.be/jHDVso2TsmQ

“The question is no longer, ‘Do I want to go independent?’ The question is, ‘What kind of independence makes the most sense for my clients, business, and goals?’”

“Business formation is far more important than assets under management.”

“The way you build your business will ultimately determine how valuable that business becomes.”

“Everything in an RIA is going to cost you either your time or your money.”

Yes. While the two models increasingly overlap, they differ in areas such as flexibility, compliance structure, operational responsibility, economics, and control.

Improved technology, stronger transition support, evolving economics, and better service models are prompting many advisors to reassess whether their current platform still fits their business.

Yes. Supportive independence, outsourced service providers, and improved custodial resources have significantly reduced many of the historical barriers.

No. The best fit depends on an advisor’s appetite for ownership, customization, operational responsibility, and long-term vision.

Josh argues that scalable business formation often has a greater impact on enterprise value than AUM alone.

Starting with assumptions instead of objectives. The most effective due diligence begins by defining the business you’re trying to build, then identifying the model best suited to support it.

Yes. While the two models increasingly overlap, they differ in areas such as flexibility, compliance structure, operational responsibility, economics, and control.

Improved technology, stronger transition support, evolving economics, and better service models are prompting many advisors to reassess whether their current platform still fits their business.

Yes. Supportive independence, outsourced service providers, and improved custodial resources have significantly reduced many of the historical barriers.

No. The best fit depends on an advisor’s appetite for ownership, customization, operational responsibility, and long-term vision.

Josh argues that scalable business formation often has a greater impact on enterprise value than AUM alone.

Starting with assumptions instead of objectives. The most effective due diligence begins by defining the business you’re trying to build, then identifying the model best suited to support it.

NOTE: The views and opinions expressed by the guests on this podcast are their own and do not necessarily reflect the views and opinions of Diamond Consultants. Neither Diamond Consultants nor the guests on this podcast are compensated in any way for their participation.

IBD vs. RIA: A Special Industry Update on Independence

A conversation with Louis Diamond and Josh Tomolak, Vice President of Independent Advisor Services at Diamond Consultants.     

Louis Diamond:

Welcome to the latest episode of our podcast series for financial advisors. Today’s episode is IBD vs. RIA: A Special Industry Update on Independence. It’s a conversation with Josh Tomolak, our Vice President of Independent Advisor Services. I’m Louis Diamond, and this is the Diamond Podcast for Financial Advisors.

Mindy Diamond:

At Diamond Consultants, we help elite advisors identify the right environment for their businesses to thrive, whether that’s at a wirehouse, boutique, or independent firm. With nearly three decades of experience, we’ve guided thousands of advisors and represented more than a quarter of a trillion dollars in assets transitioned. And each year, one in four advisors managing a billion dollars or more who change firms are our clients. Our process is education driven and based on building relationships, starting as your strategic partner well before you’re even thinking of a move. To schedule a confidential conversation, call us at (908) 879-1002.

Wondering why advisors change firms and where they’re headed? Are transition deals going up or down? Those very questions and more inspired us to create our annual advisor transition report. It’s the award-winning data-driven resource designed for advisors that connects the dots between the motivations around movement and the firm’s appetite for top talent. Arm yourself with the knowledge you need to make smart decisions. Download your copy at diamond-consultants.com/transitionreport.

Louis Diamond:

For a long time, going independent would suggest the destination. Today, it’s often the beginning of a different conversation. As the independent space has matured, advisors have more choices than ever before. Broker-dealers have expanded their capabilities. The RIA ecosystem has become increasingly sophisticated. Capital is more readily available and support models now exist that would’ve been difficult to imagine a decade ago. The result is that many advisors who are already independent are taking a fresh look at whether their current affiliation still aligns with what they’re trying to build. My guest is Josh Tomolak, Vice President of Independent Advisor Services here at Diamond Consultants and our resident expert on independence. Josh spends his days helping advisors evaluate independence in all its forms from independent broker dealers, the fully independent RIAs and everything in between. And his knowledge is critical because the distinction between these models is often blurred.

Many broker dealers now offer pathways to greater autonomy while supported independence has made RIA ownership more accessible than ever before. So the question is no longer simply, “Do I want to go independent?” The question is, “What kind of independence makes the most sense for client, business, and goals?” Josh shares what he’s seeing across the landscape, the misconceptions that continue to shape advisor thinking and the factors that matter most when evaluating the next chapter of an independent business. There’s a lot to discuss, so let’s get to it.

Josh, thanks for joining me today.

Joshua Tomolak:

Thanks for having me, Louis. It’s a real privilege to have come. This is a full circle moment for me going from being a student of your podcast, to working alongside you, to being a guest. So I appreciate you having me.

Louis Diamond:

Amazing. I’m excited for this one too, because you have a fresh and in the weeds perspective that a lot of our guests simply don’t have. So why don’t you start off, you spend your time helping advisors evaluate independence every day. So working with advisors who are already independent, for the most part. And to me, it feels like the independent space has really evolved dramatically over the last decade. I mean, this podcast is really the epicenter of that to prove that out, but give us a little background on your past roles in the space and then we can get into what you’re seeing right now.

Joshua Tomolak:

Yeah, I’d be happy to. So I took a very non-traditional path into wealth management. I spent a decade as a deep sea Navy diver, and upon completing my service there, I ended up working for TD Ameritrade. And in my role there, I spent about six years doing nothing but helping financial advisors explore the RIA space, whether that was to join or partner with an RIA, sell to an RIA, or in most cases, launch their own RIA. And one of the things that I ultimately came to terms with is it’s just not the right model for everybody. While I’m a huge advocate for it, we would often lose business to the major broker-dealers of the world. And at the time, I really didn’t understand why. In the last six years at Diamond Consultants has been a very interesting purview into what a lot of the broker-dealers have done and are doing to make themselves more RIA-ish and be very compelling to the right advisor.

Louis Diamond:

Perfect framing. Your background is incredibly germane to the folks you work with. So let’s start off with the softball here. What are you seeing right now?

Joshua Tomolak:

It’s not so different than the rest of the industry, the wirehouses, the regional firms, things of that nature, that if you took 10 firms, they’re all likely to go different directions, even if they were identical practices. That could be… A third would go from an independent broker-dealer to another independent broker-dealer. Certainly the supported RIA space is growing every day and has created a lot of very fun and unique solutions for advisors, very customized and curated. And then I think there’s still a lot of really great sophisticated teams and individual contributors that are making the decision to go hyper entrepreneurial and launch their own individual RIA. So the movement’s really all over the board from my perspective.

Louis Diamond:

It does feel like it’s no longer independence is an alternative option or it’s on the fringes. It’s very front and center whether for breakaways, which is a big topic on our podcast, but in general, the infrastructure has become much, much more sophisticated today than ever before. Advisors have way more tools in their toolbox to serve clients, whether in the private markets or through technology. And it’s no longer that if an advisor’s independent, they’re in the minor leagues where they don’t have the same ability to serve clients like they did if they’re at a big bank or a private bank or a wirehouse. Do you agree?

Joshua Tomolak:

I absolutely agree. And I’m reminded of a question I got one time from a great team that I worked with in New York. They asked me, “Are there really more options than ever before? Because all we see is one firm selling to another.” And I think that’s a really great point. There’s far less broker dealers on the street than there were even five years ago. But for every Commonwealth, for example, that sells to an LPL, up pops three or four really cool private equity-backed, sophisticated RIA platform firms that are built to service their own unique advisor base.

Louis Diamond:

I think that’s right. Sitting on the sidelines, sitting on top of everything going on in the industry, I feel like capital is always an interesting topic forever. If an advisor wanted to move within the independent world or break away from a big firm to go independent, the only way to get capital was to go to an independent broker dealer. So we still see that, but I feel like today between all these minority acquisition opportunities, we’re seeing firms acquire practices at time of transition, which is somewhat new. There’s debt solutions, recruiting deals are way up for firms that are paying forgivable loans. RIAs now would, in some cases, will pay a forgivable note. What are you seeing there as far as the availability of capital and just deals in general?

Joshua Tomolak:

It’s a great question and I didn’t want to take the low-hanging fruit, but capital’s been a huge innovation, I guess, in the last five years I’d say. Just to give you rough quotes, please don’t hold me to it, but traditional transition broker-dealer deals were five years ago, 40 to 60% of Trailing Twelve revenue today are somewhere between 90 and 120%, sometimes north of that for the right team. That’s really meaningful money for the team that is thinking about foregoing a wirehouse deal, for example. I’d also say a lot of these firms are getting hyper-creative in how they solve for capital. The minority investment piece that you mentioned is very interesting. We’re seeing a lot of privatized forgivable notes in the RIA space where third-party or private lenders are basically lending the money and the RIA is making the payments on that forgivable note as long as the advisor is affiliated with them.

So there’s been a recognition among the RIA space to get away from the, “Oh, they just took a check” type of mantra, and to say, “Look, I understand there are capital needs. These people are taking a risk. We need to solve for that.” So we’ve seen a lot of that in the marketplace.

Louis Diamond:

Very interesting. I think another thing financially, and then we’ll keep the train moving, that I know I’ve seen, and maybe you can weigh in if you’ve seen the same, is the cost to an advisor or a business owner to join an independent BD or to join an RIA has come way down, probably in part because of Schwab going to zero on trading. That’s been a catalyst. But it feels like we used to say independent BDs were expensive relative to the RIA world. And in some cases, they certainly could be. And if you’re at scale, maybe you can pick up a point or two being in the RIA world versus a BD. But when you have some of these BDs that have a basis point admin fee or no admin fee at a certain size and the payouts I feel like are similar, maybe have gone up a little bit, but it’s more so like the administrator fees, the platform fees, the program fees.

Anyone who’s not in that world, it’s like, “What are you talking about?” But basically the way that these broker-dealers make money, it seems like there’s been a pretty big differential in the exchange of value where advisors now get more services, better technology, get more money to join them and get it at a lower cost. Do you agree?

Joshua Tomolak:

I absolutely agree. I think that maybe that’s one of the larger changes that we’ve seen, and it’s probably one of the benefits from a lot of the industry consolidation on that independent broker-dealer side. The economies of scale of these folks have allowed them to increase their tech spend, increase their service capacities all while offering it to the advisors at a cheaper price. And when I was at TD Ameritrade, one of the biggest pitches was the idea of a 100% payout and you control the fixed expenses, your technology compliance, et cetera. But what’s changed is that broker-dealers are pretty darn comparable on the expenses. All of those admin fees and things you mentioned will still exist, but they’re on a much smaller scale. And I think the question a lot of advisors are asking is, “Am I getting congruent value from my broker-dealer for what I pay for?” And while that answer might’ve been no a couple years ago, today the answer is more often yes.

Louis Diamond:

Yeah, I would agree. A lot of times we work with advisors who are starting an RIA or affiliating with an RIA or going to a BD and they see how big the deals are in the independent BD world and the payouts are really high and the fees are relatively low. And honestly, it is a hard decision or calculus to make, like, “How does it make sense for me to turn down this extremely lucrative deal when my ongoing economics are going to be somewhat similar in the BD world versus in the RIA space?” I think it’s just an interesting dynamic and we’ll get more into that distinction. One of the stars of the show right here is we’ve seen a ton of advisor movement across the industry. Our annual advisor transition report said that in 2025, over 11,000 experienced advisors changed firms, which is a large number.

A lot of those numbers are within the independent world. So advisors who are 1099 through a BD or through an RIA transitioning to another platform or organization or starting an RIA. So why do you think we’re seeing so many advisors reconsider their current firm or their platform or their broker-dealer today than in years past?

Joshua Tomolak:

It’s a jarring number. 11,000 is definitely a significant amount of advisor movements. To me, it comes down to a few things, but I will say that it’s almost always a conglomeration of pushes and pulls. Pushes being inherent frustrations with your status quo, pulls being the new sexy, shiny things that you see in the marketplace that could be really impactful for your business. To me, it typically comes down to one of three things, at least on the push front, that drives advisors to movement. Service being number one, technology being number two, and economics being number three. And if we were just going to unpack those, I think service being, “Can you call somebody that knows your business, that knows your name? Are you getting the correct answers? Are you being pushed through a phone tree? And even if you’re not doing it, is it taking up a meaningful amount of time of your staff’s free time?”

On the technology front, there’s very significant tech spends happening in the industry right now. I think Raymond James and LPL reported, for example, they spent 500 million in 2025 on a tech spend. So advisors are going to the places that are making their life easier. People are looking for a mechanism to really scale their business without having to add staff and a lot of expenses to the bottom line. And technology is just the fastest, most efficient way to do that most times. And then economics, certainly a lot of advisors and teams have built phenomenal businesses and they’ve made a great living without really stressing out about the economics. And they eventually get to a point in their business where what they were giving up as a million dollar producer is far different than what they’re giving up as a $4 million producer. And back to the congruent value, it perhaps stops to make as much sense.

Louis Diamond:

Well said. I always say when the cost-to-value ratio is out of whack, that’s when advisors sit up and take notice. And not to name names of firms, but there definitely are firms that are more expensive. And even if you look at how much a wirehouse or a Ed Jones advisor paid their firm, it’s like, “What got me here is not necessarily what’s going to get me there.” And while the name on the business card, the resources were incredibly impactful, and I’m so grateful for what my firm, my broker-dealer did for me when I was just starting or when I was smaller. Now the business is bigger, I rely upon different resources or I don’t need the firm as much. So I’d rather plow the cost savings either into income for myself or invest it in areas that are most germane to my business. And it’s usually when that kind of light bulb moment goes off, that’s one of the major pushes that cause advisors to evaluate other options.

So I agree with you, those are the major push factors, but then what are the pull factors? What are the major advancements or changes across the independent space that’s causing advisors to say, “Hey, okay, I might have some frustrations, but at the same time, I also need to find something that’s more than marginally better than the firm I’m at. Otherwise, why am I going to go through the hassle, take the risk, et cetera? So what are some of the pull factors that advisors are latching onto today?

Joshua Tomolak:

Sure. And I might say with one final push factor, there’s a straw that breaks the proverbial camel’s back when you’ve been told for however many years that this change or that change is coming down the pipeline and it never happens. And it translates well into the pull factors is do they do what they say they’re going to do? The talking points really for the pull factors are exactly the same. So the counterpoint to service is perhaps having a direct relationship with the chief compliance officer at a firm or having a dedicated service representative that knows their stuff inside and out and can get you the answer even if they don’t know it off the top of their head. Having the technology to rebalance a household in two clicks instead of two hours. In economics, I think it’s really a transparency of economics. We’ve both worked with some really significant firms that have looked at their P&Ls and said, “where the heck is the money going?”

And we’ve looked at the same P&Ls and said, “I have no idea,” because it’s so convoluted. People are happy to pay for good service, good technology, good products, but they just want to know where the money’s coming from. So I think it’s a yin and yang. The same things that they’re the push are often the pull.

Louis Diamond:

Definitely. I’ll give you a couple other from my perspective. I’ll say first specific to the independent BD world, and then we’ll dive into the RIA, I think it’s a little bit different. But I think some other will say innovations or changes that are causing advisors to really perk up and listen and really make the case to themselves that life will be better at this new organization than the status quo or staying put. We’ve seen major advancements in transition support, whether it’s being able to do a transition without a shred of paper, being able to… I mean, we’ve seen some independent advisors move their entire book within two weeks, which never would’ve happened before. So the firms that I’d say are playing offense, the larger firms that are winning, they have insane headcount around transitions and are always investing in technology, whether now on the AI front or in general.

And we’ve seen transitions, they’re never easy. So that’s not a comment to say it’s easy, but a lot of the friction, a lot of the manual work has been taken away, which is massive. You definitely mentioned the significant technology spend. I mean, just the innovations going on across the industry. There’s definitely some firms that are laggards on technology and others that are light years ahead, whether because their tech is more integrated or they’ve built out their platform to be more, we’ll say modular, to plug in different third-party softwares where an advisor can really customize and create their own tech stack. I think there’s been some changes on compliance. It used to be if you’re at an independent BD, you had to be the OSJ by yourself or you had to roll up under an OSJ. But now most BDs offer home office supervision, so a big friction or pain point is taken away.

And then I’ll give you a bridge to talk about what we’re seeing on the RIA side. But we’ve also seen, I would say, a real blurring of the lines between what you would traditionally think of as an independent broker dealer versus what was an RIA. So whether it’s an internal pathway where it’s like, “Start off on our independent BD platform, get the big deal, get the support, but then you can ditch that and just use this as a custodian or you can sell the business to us when you want to retire and convert to W2.” So in that vein, transitioning internally to an RIA, give me the same points like, “What are the major advancements or changes you’re seeing on the RIA side today?”

Joshua Tomolak:

I love that you said that because it’s been one of the most interesting changes to watch. Independent broker dealers becoming more like RIAs, and to your point, being more flexible, having more optionality, a more curated experience in some cases. And in many cases becoming closer to independent broker dealers with some of these massive shops that we’ve seen be created over the last five years that now have hundreds, if not thousands of advisors. To your question on the internal RIA slide as we sometimes call it, this really didn’t exist many places a few years ago. And I think it’s been created as both originally a retention tool in many places for the advisors that were with a major independent broker dealer and they ultimately wanted to have their own ADV and their own RIA. And the firm didn’t want to lose all the assets to an independent custodian so they gave them the green light to…

And it’s ultimately became a sales tool in many cases. Just to use a couple of examples across the industry, I mean, Raymond James has Raymond James Custody Services, which has attracted a lot of really sophisticated teams. I know Wells Fargo Finance done something similar and even the counterparts over at Cetera and Osaic are trying to do the same thing. So it’s a recognition in my view that we want to keep the best talent possible. And if these folks are ultimately going to go RIA anyway, it’s less about the money and more about the flexibility and control that it offers them. So what can we do to keep those folks on board? And rightfully so, a lot of senior management of these firms have said, “Let’s not lose these teams. It’s going to be a lower margin business for us, but at the rate that they’re growing, it’s going to pay off in the long run.”

Louis Diamond:

Well said.

RIAs are now more mainstream. And some of these RIAs, they’re either resembling independent BDs or I would even go so far to say the valuations that are even publicly available on some RIAs is definitely having people take notice. I mean, Cerity Partners recently raised capital at an over $8 billion reported valuation. Crescent was well over a billion. Firms like Mariner, Creative Planning, Mercer, Wealth Enhancement Group, and there’s many that I’m missing, are all worth a couple billion dollars or more and growing. Do you think that’s had an impact on the legitimacy or the staying power of the RIA model?

Joshua Tomolak:

Oh, absolutely. There’s no doubt about it. I mean, those groups that you mentioned and many more are winning some of the biggest teams on the street. I mean, if you pull up a run-of-the-mill advisor hub article, for example, you’ll see as many of those RIAs win significant businesses as you will their broker-dealer counterparts, partially in my opinion, due to the massive valuations these firms are fetching. And it’s much more of a partnership in the sense that joining a Crescent or a Wealth Enhancement Group, as you mentioned, you’re a part of a boutique group of maybe a couple of hundred very sophisticated high-producing advisors all playing under the same banner, all rowing in the same direction, and that creates substantial growth.

Louis Diamond:

Exactly right. I think two other things to me that’s driving the legitimacy or the growth of the RIA segment, there’s so many different outsourcing solutions that have popped up, whether it’s more of a… We’ll say a bundled or a package outsourcing solution through firms like Dynasty and Sanctuary. LPL has done a ton with having a shared services outsourcing model. So you have those. But you also have, I mean, probably 10 different firms I could think of that can be an outsourced chief compliance officer. You have tons of marketing agencies that specialize in helping RIAs. You have all these FinTechs popping up to support the RIA space. Really, it’s like anything and everything can be outsourced now. And even the big Wall Street banks like UBS, Merrill, et cetera, they’re attempting to sell and distribute product into the RIA space. Venture funds, private equity funds, anyone you talk to is trying to get a piece of the RIA space, which means there’s more product and platform availability than ever before.

And I think it’s massive because one, it’s a catalyst for teams who say, “I love everything about the RIA world. I just don’t want to do it on my own,” or, “I don’t know where to start.” But also it means that they can look their clients in the eye and say, “Hey, not only do I have the same stuff that I had for you at XYZ firm, I can actually do more for you.” And even if you look at what the custodians are doing on the lending side now, Schwab owning a bank is massive and being able to facilitate mortgages, securities-backed loans, things that didn’t really exist in the past. I think it’s a very exciting time for advisors either that are independent or are considering the independent space because you have all these choices and it’s really like, “Choose your own adventure. Give me your top five things you want.” I’m sure it exists and we can find it and make it happen. And I don’t think we’d have the same confidence in that statement 5, 7, 10 years ago.

Joshua Tomolak:

I couldn’t agree more. That’s such a huge development is the marketplace of third party vendors in any kind of capitalism environment. There’s problems that people encounter and there’s really smart people that are trying to make a lot of money that go to market to solve them. And we’ve seen a ton of that over the last few years.

Louis Diamond:

Exactly right. Yeah, it’s like also… If an advisor looks around and says, “Hey, this is what I want,” and it doesn’t exist, oftentimes that’s a light bulb moment to be like, “Okay, I’ll go build it. I’ll do it on my own.” Whether it was Stewart Partners when they launched a number of years ago or Hightower, Dynasty, et cetera. They were all started by people that said, “Hey, I see a big gap in the ecosystem. Let’s create a business and raise capital to go solve it and then deliver this service to other like-minded advisors or business owners.” Honestly, it’s a treat to be able to watch all this happen in real time. We probably should have laid the groundwork with this next question, but I think it’s an important one. What’s the difference between a independent broker-dealer and an RIA? Really basic foundational. It sounds like the lines are blurred. There’s probably a lot of similarities. Advisors are successful in both. It’s not like one’s better than the other. How would you explain the differences, if a client of ours asked, “What’s the difference between an independent broker-dealer and IBD versus an RIA”?

Joshua Tomolak:

Get into the core of it. Again, the lines are blurred, and I’ll stay very high level on the strategic differences, but I like to use this example. I drive a Toyota Tundra. Really like the truck, gets me from A to B. Now, if I were getting to a point where I wanted a new vehicle, if I were to go get another Toyota Tundra because I really like a lot of aspects of it, but I want the one with the bigger screen and the bigger tires and the power seats, and I have rolled down windows because I have a fear of drowning. But if I want a lot of the bells and whistles, but I want to keep the foundation, that’s what I align to a independent broker-dealer to independent broker-dealer. You like the foundation of everything all under one roof. You like a lot of the resources, but you have some meaningful frustrations and you want to see if another provider in the market can solve for those or you can upgrade.

If I instead, Louis, decided that I wanted a sports car or a Jeep Wrangler or something, I would be looking at a different category altogether. That’s how I articulate the platform space. They provide the same services and support in many cases that an independent broker-dealer does, think of marketing and a tech stack and regulatory oversight and a fellowship in a community, but they’re built on an RIA TC registered chassis. They’re typically far more customized so you can shop the street to get a lot more of the things that you like, though you are walking away from maybe some of the things that you’ve liked in the independent broker-dealer model. So I guess that’s the highest level I might explain it, just a little bit more minutia in any broker-dealer is going to be a FINRA registered, FINRA member broker-dealer. So they’re subject to the FINRA rules, which basically means it’s the compliance interpretation of those rules that they have to follow. So LPL’s rules may be slightly different than Cetera’s than Ameriprise’s because it’s based on their interpretations of the rules.

In the RIA space, everybody really operates on the fiduciary standard. So it’s just a different lens that from a compliance standpoint, business is looked at. And a lot of people would make the argument that it’s just easier to get things done when you’re looking at something from that lens. I might’ve gone too compliance nerd on you there, but I’d be curious what you think some of the major differences are.

Louis Diamond:

Yeah, I think that’s right. I mean, it sounds like if you’re in the RIA world in some capacity that you as the advisor or business owner are going to have a little bit more control and autonomy and flexibility. One, do you think that’s true? And what are the reasons why that is? Is it platform? Is it strictly just compliance is easier? What are the different ways that an RIA would have more or less flexibility than someone who’s with an independent BD?

Joshua Tomolak:

Yeah, I think it’s overwhelmingly true, but it certainly depends on your business. Within most RIA platforms, you’re going to be one of a couple dozen, maybe a couple hundred, where you’re going to have people within that firm that really know your business. So the experience in getting things done is much less about, “Can I do this,” or, “Can I not do this?” And it’s, “Louis, I understand you asked for this. We’re going to run into these issues, but let’s figure out how to get to yes.” So it’s far more curated by people that are not operating on black and white rules and can actually figure out how to get to yes for your business. The other thing I would say is that most significant RIA platforms have multiple custodial options. So many times you’ll see as few as two or as many as five. So if an advisor or a team is trying to bring on a new piece of business or do something creative, that might be something they can use a different custodial relationship to accomplish.

It might be something that Goldman Sachs does really well but is in its infancy at Fidelity, or it might be international business that’s approved on Pershing’s platform but not Schwab’s platform. So the RIA partner that you’re with can really look at those custodians agnostically and say, “What’s the best home for this business? What’s the best way to get this done for Louis?” There’s a couple examples of where I see the flexibility in practice.

Louis Diamond:

Yeah, I think one more too would be the concept of being able to shop the street. I’ve heard it described as becoming a buy-side advocate for your clients versus being a professional seller. So meaning, if I’m affiliated with an RIA or I’m operating my own RIA, there’s no selling away like there is at a wirehouse or at certain BDs. So if I have a client who’s trying to get a $10 million loan for a new building that they’re breaking ground on, if I’m at UBS, Merrill, Morgan Stanley, captive to a BD, I can go to my firm and say, “Hey, this $10 million loan, here it is. What are the terms? What are the rates? Will you take on this business?” And the firm will say, “Yes. No. Yes, here are the terms. Here’s the caveats, et cetera.” But it’s a very closed market process and an advisor has to live and die by what their firm says.

Versus in the RIA world, it’s, “Okay, I have relationships with nine different banks and I can go to these different banks and private credit funds and whoever and really create either an option process for my client or really just help them in a fully agnostic open way.” And we see the same thing when it comes to alternative investments. No one at a wirehouse, let’s say, is complaining that they don’t have enough alts that they can offer clients. Those firms have done an amazing job with really boiling the ocean and having tons and tons of options for private investments, hedge funds, et cetera. But if you’re in the RIA world, you can take it to the next level and say, “Hey, this $3 million startup company that my friend is starting, I’m going to help them raise capital,” or, “My client wants to get a syndicate of investors together to have a direct investment into a qualified opportunity zone fund that they’re starting. Let’s do it when we can advise on it.”

So it really expands what an advisor is able to do on behalf of clients. Like to me, that’s the most interesting or exciting part of the RIA model. You can get some of that within the BD world, but to me, when an advisor’s business becomes more sophisticated as far as what their end client’s needs are, it tends to translate better to the RIA world than the BD world. Not to say there aren’t ultra-high net worth focused advisors at BDs, but because of that additional flexibility, autonomy, customization, et cetera, that speaks more RIA. So again, absolutely not down at all on the independent BDs because I think there’s a massive home for them. Josh, let me turn it back to you. I’m rambling now. Give me the pitch for an independent BD. What are the things that are misperceptions that people have? What are the advantages that an independent broker dealer like an LPL or a RayJ or a Cetera have over RIAs or over other models in general?

Joshua Tomolak:

Absolutely. And I’d say I’ve learned more over the last six years from some of your ramblings than most people learn in an MBA course, so keep doing what you’re doing. But it’s funny being in this position now, having spent so much time sort of selling against the IBD model within TD Ameritrade, but what I’ve learned is it’s a good home for everybody. And a lot of times the advisors that they’re entrepreneurial enough where they like having their name on the door, but they’re not so entrepreneurial where they want to build everything out themselves, that’s where the independent broker dealers absolutely kill it. Their economics have gotten to a point where they’re really competitive. They offer transition capital that isn’t even going to be comparable in the RIA space unless you’re selling a minority share of your business. And you mentioned LPL, or we could really list all of the major ones, there’s not a department that they don’t have.

It could be as nuance as finding 403(b) payroll slots or it could be as mainstream as fixed income or setting up events. There are all kinds of really neat departments that these all under one roof independent broker dealers have invested in. And a lot of times they make an effort to make you very much aware of all of the support because most people don’t use it. So I would say for the advisors that are looking to get their improved Toyota Tundra, then you can get probably 70 or 80% of what you want within the independent broker-dealer world. And you can also keep 20 or 30% of the stuff, maybe more that you really liked at your previous firm. So I think that’s where it really shines. I sometimes call it an incremental change rather than a transformational change. But for many advisors, incremental is really good enough if you get to keep the familiarity of how you’ve been doing business for the last 20-some years, but you’re able to get net improvement on the things that were really bothering you.

Louis Diamond:

Well said. Something that I’ve seen that’s been… I guess this could be either pro or con depending upon the advisor, but with some broker dealers, letting an advisor co-brand with them or really having a real consumer-facing brand, whether it’s, “I’m a franchise owner with Ameriprise,” or, “I’m independent through Raymond James,” or, “Running my own practice through Wells Fargo FiNet,” or, “I’m independent with Northwestern Mutual.” There’s definitely some brand cache or brand familiarity with some of those firms that may or may not be the same if you’re in the RIA world. So I would agree there’s a lot to like about the independent BD world and there’s a fit for people that is absolutely better with independent BDs than on the RIA side. Even if some people would say RIA is better, we’re cleaner, I wouldn’t say that. To me, it’s all about what an advisor’s goals are and then matching that up with what these firms do.

And there’s never a perfect option. I jokingly say, “If there was a perfect firm, we wouldn’t be in business.” Every firm has their advantages or disadvantages. And depending upon where an advisor’s coming from, their style of business, their pain points, that’ll match up really well with on firm or one type of firm or one model than the other.

Let’s pivot a little bit to the RIA world. A lot of your comments have been more about advisors affiliating or joining RIAs, this whole supportive version of independence concept. But what about advisors who want to go and start their own RIA? Either they’re leaving a captive firm and taking the entrepreneurial route and starting their own firm, or they’re leaving an independent BD to go start their own RIA. What do you see as some of the biggest misconceptions that advisors have about that move?

Joshua Tomolak:

That’s probably my favorite topic because there are the most misconceptions I think in this space.

Louis Diamond:

I’d agree.

Joshua Tomolak:

And I would say there’s 9 out of 10 conversations that I have with advisors and teams, they start off with the launching an RIA in mind or at least RIA curious and they want to understand what’s out there. And probably less than half the time do these folks end up actually launching their own RIA, which is okay because the ones that do are massively successful and they know they’re dang sure that’s exactly what they want to do. I think it gets a little bit romanticized sometimes that they’ll say, “Oh, I’ll just give Schwab a call,” or, “I’ll just give the custodian a call,” as if they were shopping independent broker dealers. That’s fine. You can do that and they will help you, but there’s quite a bit more to think about. And it’s not, in my opinion, the same as evaluating independent broker dealers.

If it’s all right, I was taught the four pillars of the RIA model. I can go through that with you really quickly. So the way to think about the RIA space is in four pieces. And shout out to a friend, Eli Suarez, that taught me this years ago. The first pillar… Thinking of four pillars on a bar stool, if you will. The first one being administration. And this is your compliance, this is setting up your ADV, your LLC, all of your business formation documents. The second piece being technology, what do you actually want to use? Because the benefits of the broker-dealer world and the supported independent world is they’ve already built it for you. They’ve already paid for it and scraped their knees building it. In this case, you have to. And for some people, that’s really exciting to source financial planning software and portfolio management software and your CRM and tax software, et cetera. For some people, it just sounds like a huge headache.

The third pillar being custodians. I have them third because you want to make sure that the right custodian can integrate properly with the technology that you’ve sourced that you’re passionate about. And then ultimately transition. What does a transition really look like? What are my legal and regulatory requirements? How does this work? What are the timelines? Things of that nature. So I guess I would say in closing that if those four things are things that you really want to own, then you’re in a really good position to consider an RIA launch. What do you think, Louis?

Louis Diamond:

I think that’s a great framework to break it down. Not just be like, “Okay, I can tolerate that,” or, “My team can do it,” but I think you have to be pretty excited about rolling up your sleeves and customizing and doing it yourself because in our experience, there’s a nominal differential between the economics of running your own RIA versus affiliating with an RIA or going to an independent BD. All the extra work and responsibility, you’re not really going to make it up, at least on the front end, on a higher net payout. So it has to be more about what the model means to you and having a vision that you don’t think anyone else can accomplish other than yourself.

And looking at that crazy ever-expanding Michael Kitces’ FinTech map and there’s 500 different logos on it and being like, “Yes, that’s what I want. I want to go through this. I want to pick the seven pieces of my tech stack that work for me,” rather than getting, “Here’s the tech stack, take a demo, you like it, you don’t like it, take it or leave it.” To me, the two biggest misconceptions people have about the RIA world is one, “I’m going to have to be a full-time chief compliance officer,” and just that compliance is this boogeyman, this terrible, scary thing. In some ways it is. But the reality is most, especially startup RIAs will fully outsource compliance to a firm or they’ll hire a compliance consultant or firms that are big enough even will hire a CCO or repurpose someone on their team to be CCO. But compliance is much more streamlined and simpler than BD compliance. And ultimately, it’s compliance that’s being built for your business rather than compliance that’s being built for a publicly traded multinational company that supports 20,000 financial advisors.

So I think compliance is always a big misconception. It’s definitely what a lot of firms will pry upon when they’re saying like, “Oh, you’re going to own all the legal and regulatory requirements. You could, but it’s definitely not a requirement.” And then I think another one is folks sometimes underestimate and overestimate the operational burden and how much work it is to start an RIA. Sometimes people just… They’re perfect for the RIA world, that’s their goal, but they get stopped in their tracks. They don’t really know what to do. But what we’ve seen, we said it earlier with so many different outsourcing solutions and different service providers that have popped up, if you have the fire in your belly to go build something, it doesn’t mean you’re doing it by yourself. I mean, that’s what firms like ours do. The custodians are very helpful. On the flip side though, I have seen advisors chasing payouts say, “Hey, I’m just going to go start an RIA because I want to make another 1 to 3%,” or whatever it comes to and they drastically underestimate what it really takes to build a successful firm.

Joshua Tomolak:

Exactly right. I think that’s my favorite one, Louis, overestimating and estimating the operational burden there is you could have the same conversation with two teams and it can go the completely different direction.

Louis Diamond:

Josh, let’s wrap here. I got one more question for you that I think is an exciting one, but give me three key trends or storylines that most people don’t know about or aren’t talking about that you’re passionate about or that you’re sharing with advisors or counseling today.

Joshua Tomolak:

Sure. This is the free advice portion. And I’ll tell you what, Louis, if it’s all right with you, I’ll give you two and I would love to hear one from you as well. The first one I’ve seen in both the independent broker-dealer and RIA space is the minority investor concept. A lot of folks will talk about the idea of taking chips off a table and starting to partially monetize your business. I think that’s all important, but what I’ve found is that a lot of advisors really want their partner, whether it’s an RIA broker dealer to help them grow. And that could be with M&A opportunities, that could be with traditional recruitment of advisors, that could be building a business plan. But the minority investment part really helps accelerate that for a lot of businesses because all of a sudden, not only are you cashing out a small part of your business, but you’ve just created an ally with the parent entity, it is now much more likely to help you grow in that capacity because they’re insulated from it and they profit when you profit.

So I think it’s easy to be shortsighted and say, “Well, my equity’s going to keep growing. Why would I sell you a piece of this?” But I counsel folks often to really think about what that long-term strategic partnership is and making somebody a real equity partner rather than just a vendor that provides you with technology and regulatory coverage. The other one I’d say is that… And this one’s really important to me, that business formation is far more important than your assets under management. Said a different way, the way you build your business is going to make your business far more valuable than the number of dollars underneath your name. And what I mean by that is, just to use an example, a sophisticated, well-built, centralized, scalable and repeatable business, whether it’s an RIA with a broker-dealer that is going to fetch a far higher M&A multiple than a OSJ that’s five times the size that just has a bunch of 1099 independent advisors underneath the umbrella.

What we’ve seen in the M&A space is that if you’re going to shell out 50, 60, $80 million for somebody’s business, you want to know that you have this business for the long term. So I would certainly counsel people that have been around maybe far longer than me to take a look at how you’re building this and put together a business plan on what those next 10 years should look like and not necessarily fall into the trap where your only revenue source is the override that you receive from a firm and then you in turn pay to the advisors on your team.

Louis Diamond:

Well said. I really like that line. We’d probably do a whole episode on what are the tips and tricks for building a business with the end in mind? Like the Covey quote, “Begin with the end in mind.” Transitions are like… They’re a bear. I mean, there’s no way to sugarcoat it. Advisors, when they hear transition, if you ask them, “Don’t think about it, give me your reaction.” “Terrible, risky, a lot of work. I’ll never do it again. My friend did it and it was terrible. What if my clients don’t come?” It’s all these negative emotions. And in many cases, I don’t blame an advisor because it is a big act. But to me, if someone is weighing making a transition, whether a wholesale business model change going from being an employee to being independent, going from being an advisor at an independent BD to starting an RIA, or even going independent BD to independent BD, it’s an opportunity if you rise to the occasion to build with this next act with intentionality.

So whether it’s restructuring compensation for your team, converting people from 1099 to W2, putting in place new workflows, changing how investments, instead of it being each individual advisor doing investments to more of a centralized model, cleaning up workflows, really investing in data, investing in AI. It’s something that I think, again, we can have a whole episode on it, but I think it’s a great one. Build the business the right way. And obviously, businesses that are larger, theoretically, sell for more, but we’ve certainly seen businesses that are half the size of a larger one sell for a similar amount or more because they did all the right things and the larger one did the things that really turn off a buyer or detract from a valuation. Let me give you one more and tell me if you agree, but I think we’re in this moment when Altruist, the upstart, a new kid on the block custodian, they launched a basically tokenization of cash in a way to automatically agentically source or sort cash to the highest yielding money market.

And you’re like, “This is fricking wonky. Louis, why are you telling us this?” I think this is an important one just to keep a watchful eye on. I have no idea how this is going to shake out, but really the biggest way that independent BDs or even custodians like Schwab and Fidelity really make money, it’s not on their overrides from practices or the admin fee or the custody fee. It’s really on net interest margin. So how much the broker-dealer or the firm is making on client cash and brokerage accounts relative to what they’re paying out the client. It’s essentially like free margin to these firms. And this concept, I think, has massive potential for disruption for the business model. Again, I don’t know what it’s going to look like, whether it means platform fees that are instituted at all these firms, whether it means certain models would be more beneficial than others, whether it means nothing’s going to change, which is probably the right answer given this industry.

But it’s something to keep a watchful eye on just if your firm institutes a new platform fee or there’s a fundamental way in which your firm can no longer make money. How are they going to make it up? Are they now going to be uncompetitive? They’re not going to have as much scale or profits to invest in the platform. Is it going to cause even more consolidation in the industry? So to me, that’s the one pretty under the radar, pretty wonky storyline that I don’t think enough people are talking about, but has the biggest possibility for disruption across their space than anything I’ve seen in a while.

Joshua Tomolak:

Sure. That’s the whole iceberg. Not a lot of people are talking about it. It’s not poking out of the ocean, but it’s going to be continuously brought up. I think it’s a question that a lot of advisors are going to have to ask these firms. And at the end of the day, the firms aren’t the bad guys. They have to make money too to provide a quality product. So where the money comes from matters.

Louis Diamond:

Exactly. Josh, this has been awesome. I learned a lot talking with you and just having your objective consulting hat on what I think are really the differences between IBD and RIA and some of the key trends and storylines to watch has been instrumental. I’ll also give a plug that on our website and we’ll link to it in the show notes, we have a really helpful one-page reference guide going through the differences between independent BDs or IBDs and RIAs. So feel free to click on it. We’ll make sure it gets in your inbox. Josh, thanks again for joining us today.

Joshua Tomolak:

Yeah, thanks for having me, Louis. It was a pleasure.

Mindy Diamond:

As a financial advisor, you hold yourself to the highest standards of integrity, honesty, and credibility. You are successful because you take your professional responsibilities seriously and are dedicated to your clients. But are you living your best business life? Are your goals aligned with your firms or could a better option exist? Should I stay or Should I Go? is a book written with you in mind. It’s a self-guided journey that walks you through the key steps that we take with our advisor clients. This strategic thought process and roadmap to professional self-discovery is designed to help you ask the right questions and think critically and objectively whether you’re considering change or not. Learn how to get your copy at diamond-consultants.com/thebook.

IBD vs. RIA: A Special Industry Update on Independence

A conversation with Louis Diamond and Josh Tomolak, Vice President of Independent Advisor Services at Diamond Consultants.     

Louis Diamond:

Welcome to the latest episode of our podcast series for financial advisors. Today’s episode is IBD vs. RIA: A Special Industry Update on Independence. It’s a conversation with Josh Tomolak, our Vice President of Independent Advisor Services. I’m Louis Diamond, and this is the Diamond Podcast for Financial Advisors.

Mindy Diamond:

At Diamond Consultants, we help elite advisors identify the right environment for their businesses to thrive, whether that’s at a wirehouse, boutique, or independent firm. With nearly three decades of experience, we’ve guided thousands of advisors and represented more than a quarter of a trillion dollars in assets transitioned. And each year, one in four advisors managing a billion dollars or more who change firms are our clients. Our process is education driven and based on building relationships, starting as your strategic partner well before you’re even thinking of a move. To schedule a confidential conversation, call us at (908) 879-1002.

Wondering why advisors change firms and where they’re headed? Are transition deals going up or down? Those very questions and more inspired us to create our annual advisor transition report. It’s the award-winning data-driven resource designed for advisors that connects the dots between the motivations around movement and the firm’s appetite for top talent. Arm yourself with the knowledge you need to make smart decisions. Download your copy at diamond-consultants.com/transitionreport.

Louis Diamond:

For a long time, going independent would suggest the destination. Today, it’s often the beginning of a different conversation. As the independent space has matured, advisors have more choices than ever before. Broker-dealers have expanded their capabilities. The RIA ecosystem has become increasingly sophisticated. Capital is more readily available and support models now exist that would’ve been difficult to imagine a decade ago. The result is that many advisors who are already independent are taking a fresh look at whether their current affiliation still aligns with what they’re trying to build. My guest is Josh Tomolak, Vice President of Independent Advisor Services here at Diamond Consultants and our resident expert on independence. Josh spends his days helping advisors evaluate independence in all its forms from independent broker dealers, the fully independent RIAs and everything in between. And his knowledge is critical because the distinction between these models is often blurred.

Many broker dealers now offer pathways to greater autonomy while supported independence has made RIA ownership more accessible than ever before. So the question is no longer simply, “Do I want to go independent?” The question is, “What kind of independence makes the most sense for client, business, and goals?” Josh shares what he’s seeing across the landscape, the misconceptions that continue to shape advisor thinking and the factors that matter most when evaluating the next chapter of an independent business. There’s a lot to discuss, so let’s get to it.

Josh, thanks for joining me today.

Joshua Tomolak:

Thanks for having me, Louis. It’s a real privilege to have come. This is a full circle moment for me going from being a student of your podcast, to working alongside you, to being a guest. So I appreciate you having me.

Louis Diamond:

Amazing. I’m excited for this one too, because you have a fresh and in the weeds perspective that a lot of our guests simply don’t have. So why don’t you start off, you spend your time helping advisors evaluate independence every day. So working with advisors who are already independent, for the most part. And to me, it feels like the independent space has really evolved dramatically over the last decade. I mean, this podcast is really the epicenter of that to prove that out, but give us a little background on your past roles in the space and then we can get into what you’re seeing right now.

Joshua Tomolak:

Yeah, I’d be happy to. So I took a very non-traditional path into wealth management. I spent a decade as a deep sea Navy diver, and upon completing my service there, I ended up working for TD Ameritrade. And in my role there, I spent about six years doing nothing but helping financial advisors explore the RIA space, whether that was to join or partner with an RIA, sell to an RIA, or in most cases, launch their own RIA. And one of the things that I ultimately came to terms with is it’s just not the right model for everybody. While I’m a huge advocate for it, we would often lose business to the major broker-dealers of the world. And at the time, I really didn’t understand why. In the last six years at Diamond Consultants has been a very interesting purview into what a lot of the broker-dealers have done and are doing to make themselves more RIA-ish and be very compelling to the right advisor.

Louis Diamond:

Perfect framing. Your background is incredibly germane to the folks you work with. So let’s start off with the softball here. What are you seeing right now?

Joshua Tomolak:

It’s not so different than the rest of the industry, the wirehouses, the regional firms, things of that nature, that if you took 10 firms, they’re all likely to go different directions, even if they were identical practices. That could be… A third would go from an independent broker-dealer to another independent broker-dealer. Certainly the supported RIA space is growing every day and has created a lot of very fun and unique solutions for advisors, very customized and curated. And then I think there’s still a lot of really great sophisticated teams and individual contributors that are making the decision to go hyper entrepreneurial and launch their own individual RIA. So the movement’s really all over the board from my perspective.

Louis Diamond:

It does feel like it’s no longer independence is an alternative option or it’s on the fringes. It’s very front and center whether for breakaways, which is a big topic on our podcast, but in general, the infrastructure has become much, much more sophisticated today than ever before. Advisors have way more tools in their toolbox to serve clients, whether in the private markets or through technology. And it’s no longer that if an advisor’s independent, they’re in the minor leagues where they don’t have the same ability to serve clients like they did if they’re at a big bank or a private bank or a wirehouse. Do you agree?

Joshua Tomolak:

I absolutely agree. And I’m reminded of a question I got one time from a great team that I worked with in New York. They asked me, “Are there really more options than ever before? Because all we see is one firm selling to another.” And I think that’s a really great point. There’s far less broker dealers on the street than there were even five years ago. But for every Commonwealth, for example, that sells to an LPL, up pops three or four really cool private equity-backed, sophisticated RIA platform firms that are built to service their own unique advisor base.

Louis Diamond:

I think that’s right. Sitting on the sidelines, sitting on top of everything going on in the industry, I feel like capital is always an interesting topic forever. If an advisor wanted to move within the independent world or break away from a big firm to go independent, the only way to get capital was to go to an independent broker dealer. So we still see that, but I feel like today between all these minority acquisition opportunities, we’re seeing firms acquire practices at time of transition, which is somewhat new. There’s debt solutions, recruiting deals are way up for firms that are paying forgivable loans. RIAs now would, in some cases, will pay a forgivable note. What are you seeing there as far as the availability of capital and just deals in general?

Joshua Tomolak:

It’s a great question and I didn’t want to take the low-hanging fruit, but capital’s been a huge innovation, I guess, in the last five years I’d say. Just to give you rough quotes, please don’t hold me to it, but traditional transition broker-dealer deals were five years ago, 40 to 60% of Trailing Twelve revenue today are somewhere between 90 and 120%, sometimes north of that for the right team. That’s really meaningful money for the team that is thinking about foregoing a wirehouse deal, for example. I’d also say a lot of these firms are getting hyper-creative in how they solve for capital. The minority investment piece that you mentioned is very interesting. We’re seeing a lot of privatized forgivable notes in the RIA space where third-party or private lenders are basically lending the money and the RIA is making the payments on that forgivable note as long as the advisor is affiliated with them.

So there’s been a recognition among the RIA space to get away from the, “Oh, they just took a check” type of mantra, and to say, “Look, I understand there are capital needs. These people are taking a risk. We need to solve for that.” So we’ve seen a lot of that in the marketplace.

Louis Diamond:

Very interesting. I think another thing financially, and then we’ll keep the train moving, that I know I’ve seen, and maybe you can weigh in if you’ve seen the same, is the cost to an advisor or a business owner to join an independent BD or to join an RIA has come way down, probably in part because of Schwab going to zero on trading. That’s been a catalyst. But it feels like we used to say independent BDs were expensive relative to the RIA world. And in some cases, they certainly could be. And if you’re at scale, maybe you can pick up a point or two being in the RIA world versus a BD. But when you have some of these BDs that have a basis point admin fee or no admin fee at a certain size and the payouts I feel like are similar, maybe have gone up a little bit, but it’s more so like the administrator fees, the platform fees, the program fees.

Anyone who’s not in that world, it’s like, “What are you talking about?” But basically the way that these broker-dealers make money, it seems like there’s been a pretty big differential in the exchange of value where advisors now get more services, better technology, get more money to join them and get it at a lower cost. Do you agree?

Joshua Tomolak:

I absolutely agree. I think that maybe that’s one of the larger changes that we’ve seen, and it’s probably one of the benefits from a lot of the industry consolidation on that independent broker-dealer side. The economies of scale of these folks have allowed them to increase their tech spend, increase their service capacities all while offering it to the advisors at a cheaper price. And when I was at TD Ameritrade, one of the biggest pitches was the idea of a 100% payout and you control the fixed expenses, your technology compliance, et cetera. But what’s changed is that broker-dealers are pretty darn comparable on the expenses. All of those admin fees and things you mentioned will still exist, but they’re on a much smaller scale. And I think the question a lot of advisors are asking is, “Am I getting congruent value from my broker-dealer for what I pay for?” And while that answer might’ve been no a couple years ago, today the answer is more often yes.

Louis Diamond:

Yeah, I would agree. A lot of times we work with advisors who are starting an RIA or affiliating with an RIA or going to a BD and they see how big the deals are in the independent BD world and the payouts are really high and the fees are relatively low. And honestly, it is a hard decision or calculus to make, like, “How does it make sense for me to turn down this extremely lucrative deal when my ongoing economics are going to be somewhat similar in the BD world versus in the RIA space?” I think it’s just an interesting dynamic and we’ll get more into that distinction. One of the stars of the show right here is we’ve seen a ton of advisor movement across the industry. Our annual advisor transition report said that in 2025, over 11,000 experienced advisors changed firms, which is a large number.

A lot of those numbers are within the independent world. So advisors who are 1099 through a BD or through an RIA transitioning to another platform or organization or starting an RIA. So why do you think we’re seeing so many advisors reconsider their current firm or their platform or their broker-dealer today than in years past?

Joshua Tomolak:

It’s a jarring number. 11,000 is definitely a significant amount of advisor movements. To me, it comes down to a few things, but I will say that it’s almost always a conglomeration of pushes and pulls. Pushes being inherent frustrations with your status quo, pulls being the new sexy, shiny things that you see in the marketplace that could be really impactful for your business. To me, it typically comes down to one of three things, at least on the push front, that drives advisors to movement. Service being number one, technology being number two, and economics being number three. And if we were just going to unpack those, I think service being, “Can you call somebody that knows your business, that knows your name? Are you getting the correct answers? Are you being pushed through a phone tree? And even if you’re not doing it, is it taking up a meaningful amount of time of your staff’s free time?”

On the technology front, there’s very significant tech spends happening in the industry right now. I think Raymond James and LPL reported, for example, they spent 500 million in 2025 on a tech spend. So advisors are going to the places that are making their life easier. People are looking for a mechanism to really scale their business without having to add staff and a lot of expenses to the bottom line. And technology is just the fastest, most efficient way to do that most times. And then economics, certainly a lot of advisors and teams have built phenomenal businesses and they’ve made a great living without really stressing out about the economics. And they eventually get to a point in their business where what they were giving up as a million dollar producer is far different than what they’re giving up as a $4 million producer. And back to the congruent value, it perhaps stops to make as much sense.

Louis Diamond:

Well said. I always say when the cost-to-value ratio is out of whack, that’s when advisors sit up and take notice. And not to name names of firms, but there definitely are firms that are more expensive. And even if you look at how much a wirehouse or a Ed Jones advisor paid their firm, it’s like, “What got me here is not necessarily what’s going to get me there.” And while the name on the business card, the resources were incredibly impactful, and I’m so grateful for what my firm, my broker-dealer did for me when I was just starting or when I was smaller. Now the business is bigger, I rely upon different resources or I don’t need the firm as much. So I’d rather plow the cost savings either into income for myself or invest it in areas that are most germane to my business. And it’s usually when that kind of light bulb moment goes off, that’s one of the major pushes that cause advisors to evaluate other options.

So I agree with you, those are the major push factors, but then what are the pull factors? What are the major advancements or changes across the independent space that’s causing advisors to say, “Hey, okay, I might have some frustrations, but at the same time, I also need to find something that’s more than marginally better than the firm I’m at. Otherwise, why am I going to go through the hassle, take the risk, et cetera? So what are some of the pull factors that advisors are latching onto today?

Joshua Tomolak:

Sure. And I might say with one final push factor, there’s a straw that breaks the proverbial camel’s back when you’ve been told for however many years that this change or that change is coming down the pipeline and it never happens. And it translates well into the pull factors is do they do what they say they’re going to do? The talking points really for the pull factors are exactly the same. So the counterpoint to service is perhaps having a direct relationship with the chief compliance officer at a firm or having a dedicated service representative that knows their stuff inside and out and can get you the answer even if they don’t know it off the top of their head. Having the technology to rebalance a household in two clicks instead of two hours. In economics, I think it’s really a transparency of economics. We’ve both worked with some really significant firms that have looked at their P&Ls and said, “where the heck is the money going?”

And we’ve looked at the same P&Ls and said, “I have no idea,” because it’s so convoluted. People are happy to pay for good service, good technology, good products, but they just want to know where the money’s coming from. So I think it’s a yin and yang. The same things that they’re the push are often the pull.

Louis Diamond:

Definitely. I’ll give you a couple other from my perspective. I’ll say first specific to the independent BD world, and then we’ll dive into the RIA, I think it’s a little bit different. But I think some other will say innovations or changes that are causing advisors to really perk up and listen and really make the case to themselves that life will be better at this new organization than the status quo or staying put. We’ve seen major advancements in transition support, whether it’s being able to do a transition without a shred of paper, being able to… I mean, we’ve seen some independent advisors move their entire book within two weeks, which never would’ve happened before. So the firms that I’d say are playing offense, the larger firms that are winning, they have insane headcount around transitions and are always investing in technology, whether now on the AI front or in general.

And we’ve seen transitions, they’re never easy. So that’s not a comment to say it’s easy, but a lot of the friction, a lot of the manual work has been taken away, which is massive. You definitely mentioned the significant technology spend. I mean, just the innovations going on across the industry. There’s definitely some firms that are laggards on technology and others that are light years ahead, whether because their tech is more integrated or they’ve built out their platform to be more, we’ll say modular, to plug in different third-party softwares where an advisor can really customize and create their own tech stack. I think there’s been some changes on compliance. It used to be if you’re at an independent BD, you had to be the OSJ by yourself or you had to roll up under an OSJ. But now most BDs offer home office supervision, so a big friction or pain point is taken away.

And then I’ll give you a bridge to talk about what we’re seeing on the RIA side. But we’ve also seen, I would say, a real blurring of the lines between what you would traditionally think of as an independent broker dealer versus what was an RIA. So whether it’s an internal pathway where it’s like, “Start off on our independent BD platform, get the big deal, get the support, but then you can ditch that and just use this as a custodian or you can sell the business to us when you want to retire and convert to W2.” So in that vein, transitioning internally to an RIA, give me the same points like, “What are the major advancements or changes you’re seeing on the RIA side today?”

Joshua Tomolak:

I love that you said that because it’s been one of the most interesting changes to watch. Independent broker dealers becoming more like RIAs, and to your point, being more flexible, having more optionality, a more curated experience in some cases. And in many cases becoming closer to independent broker dealers with some of these massive shops that we’ve seen be created over the last five years that now have hundreds, if not thousands of advisors. To your question on the internal RIA slide as we sometimes call it, this really didn’t exist many places a few years ago. And I think it’s been created as both originally a retention tool in many places for the advisors that were with a major independent broker dealer and they ultimately wanted to have their own ADV and their own RIA. And the firm didn’t want to lose all the assets to an independent custodian so they gave them the green light to…

And it’s ultimately became a sales tool in many cases. Just to use a couple of examples across the industry, I mean, Raymond James has Raymond James Custody Services, which has attracted a lot of really sophisticated teams. I know Wells Fargo Finance done something similar and even the counterparts over at Cetera and Osaic are trying to do the same thing. So it’s a recognition in my view that we want to keep the best talent possible. And if these folks are ultimately going to go RIA anyway, it’s less about the money and more about the flexibility and control that it offers them. So what can we do to keep those folks on board? And rightfully so, a lot of senior management of these firms have said, “Let’s not lose these teams. It’s going to be a lower margin business for us, but at the rate that they’re growing, it’s going to pay off in the long run.”

Louis Diamond:

Well said.

RIAs are now more mainstream. And some of these RIAs, they’re either resembling independent BDs or I would even go so far to say the valuations that are even publicly available on some RIAs is definitely having people take notice. I mean, Cerity Partners recently raised capital at an over $8 billion reported valuation. Crescent was well over a billion. Firms like Mariner, Creative Planning, Mercer, Wealth Enhancement Group, and there’s many that I’m missing, are all worth a couple billion dollars or more and growing. Do you think that’s had an impact on the legitimacy or the staying power of the RIA model?

Joshua Tomolak:

Oh, absolutely. There’s no doubt about it. I mean, those groups that you mentioned and many more are winning some of the biggest teams on the street. I mean, if you pull up a run-of-the-mill advisor hub article, for example, you’ll see as many of those RIAs win significant businesses as you will their broker-dealer counterparts, partially in my opinion, due to the massive valuations these firms are fetching. And it’s much more of a partnership in the sense that joining a Crescent or a Wealth Enhancement Group, as you mentioned, you’re a part of a boutique group of maybe a couple of hundred very sophisticated high-producing advisors all playing under the same banner, all rowing in the same direction, and that creates substantial growth.

Louis Diamond:

Exactly right. I think two other things to me that’s driving the legitimacy or the growth of the RIA segment, there’s so many different outsourcing solutions that have popped up, whether it’s more of a… We’ll say a bundled or a package outsourcing solution through firms like Dynasty and Sanctuary. LPL has done a ton with having a shared services outsourcing model. So you have those. But you also have, I mean, probably 10 different firms I could think of that can be an outsourced chief compliance officer. You have tons of marketing agencies that specialize in helping RIAs. You have all these FinTechs popping up to support the RIA space. Really, it’s like anything and everything can be outsourced now. And even the big Wall Street banks like UBS, Merrill, et cetera, they’re attempting to sell and distribute product into the RIA space. Venture funds, private equity funds, anyone you talk to is trying to get a piece of the RIA space, which means there’s more product and platform availability than ever before.

And I think it’s massive because one, it’s a catalyst for teams who say, “I love everything about the RIA world. I just don’t want to do it on my own,” or, “I don’t know where to start.” But also it means that they can look their clients in the eye and say, “Hey, not only do I have the same stuff that I had for you at XYZ firm, I can actually do more for you.” And even if you look at what the custodians are doing on the lending side now, Schwab owning a bank is massive and being able to facilitate mortgages, securities-backed loans, things that didn’t really exist in the past. I think it’s a very exciting time for advisors either that are independent or are considering the independent space because you have all these choices and it’s really like, “Choose your own adventure. Give me your top five things you want.” I’m sure it exists and we can find it and make it happen. And I don’t think we’d have the same confidence in that statement 5, 7, 10 years ago.

Joshua Tomolak:

I couldn’t agree more. That’s such a huge development is the marketplace of third party vendors in any kind of capitalism environment. There’s problems that people encounter and there’s really smart people that are trying to make a lot of money that go to market to solve them. And we’ve seen a ton of that over the last few years.

Louis Diamond:

Exactly right. Yeah, it’s like also… If an advisor looks around and says, “Hey, this is what I want,” and it doesn’t exist, oftentimes that’s a light bulb moment to be like, “Okay, I’ll go build it. I’ll do it on my own.” Whether it was Stewart Partners when they launched a number of years ago or Hightower, Dynasty, et cetera. They were all started by people that said, “Hey, I see a big gap in the ecosystem. Let’s create a business and raise capital to go solve it and then deliver this service to other like-minded advisors or business owners.” Honestly, it’s a treat to be able to watch all this happen in real time. We probably should have laid the groundwork with this next question, but I think it’s an important one. What’s the difference between a independent broker-dealer and an RIA? Really basic foundational. It sounds like the lines are blurred. There’s probably a lot of similarities. Advisors are successful in both. It’s not like one’s better than the other. How would you explain the differences, if a client of ours asked, “What’s the difference between an independent broker-dealer and IBD versus an RIA”?

Joshua Tomolak:

Get into the core of it. Again, the lines are blurred, and I’ll stay very high level on the strategic differences, but I like to use this example. I drive a Toyota Tundra. Really like the truck, gets me from A to B. Now, if I were getting to a point where I wanted a new vehicle, if I were to go get another Toyota Tundra because I really like a lot of aspects of it, but I want the one with the bigger screen and the bigger tires and the power seats, and I have rolled down windows because I have a fear of drowning. But if I want a lot of the bells and whistles, but I want to keep the foundation, that’s what I align to a independent broker-dealer to independent broker-dealer. You like the foundation of everything all under one roof. You like a lot of the resources, but you have some meaningful frustrations and you want to see if another provider in the market can solve for those or you can upgrade.

If I instead, Louis, decided that I wanted a sports car or a Jeep Wrangler or something, I would be looking at a different category altogether. That’s how I articulate the platform space. They provide the same services and support in many cases that an independent broker-dealer does, think of marketing and a tech stack and regulatory oversight and a fellowship in a community, but they’re built on an RIA TC registered chassis. They’re typically far more customized so you can shop the street to get a lot more of the things that you like, though you are walking away from maybe some of the things that you’ve liked in the independent broker-dealer model. So I guess that’s the highest level I might explain it, just a little bit more minutia in any broker-dealer is going to be a FINRA registered, FINRA member broker-dealer. So they’re subject to the FINRA rules, which basically means it’s the compliance interpretation of those rules that they have to follow. So LPL’s rules may be slightly different than Cetera’s than Ameriprise’s because it’s based on their interpretations of the rules.

In the RIA space, everybody really operates on the fiduciary standard. So it’s just a different lens that from a compliance standpoint, business is looked at. And a lot of people would make the argument that it’s just easier to get things done when you’re looking at something from that lens. I might’ve gone too compliance nerd on you there, but I’d be curious what you think some of the major differences are.

Louis Diamond:

Yeah, I think that’s right. I mean, it sounds like if you’re in the RIA world in some capacity that you as the advisor or business owner are going to have a little bit more control and autonomy and flexibility. One, do you think that’s true? And what are the reasons why that is? Is it platform? Is it strictly just compliance is easier? What are the different ways that an RIA would have more or less flexibility than someone who’s with an independent BD?

Joshua Tomolak:

Yeah, I think it’s overwhelmingly true, but it certainly depends on your business. Within most RIA platforms, you’re going to be one of a couple dozen, maybe a couple hundred, where you’re going to have people within that firm that really know your business. So the experience in getting things done is much less about, “Can I do this,” or, “Can I not do this?” And it’s, “Louis, I understand you asked for this. We’re going to run into these issues, but let’s figure out how to get to yes.” So it’s far more curated by people that are not operating on black and white rules and can actually figure out how to get to yes for your business. The other thing I would say is that most significant RIA platforms have multiple custodial options. So many times you’ll see as few as two or as many as five. So if an advisor or a team is trying to bring on a new piece of business or do something creative, that might be something they can use a different custodial relationship to accomplish.

It might be something that Goldman Sachs does really well but is in its infancy at Fidelity, or it might be international business that’s approved on Pershing’s platform but not Schwab’s platform. So the RIA partner that you’re with can really look at those custodians agnostically and say, “What’s the best home for this business? What’s the best way to get this done for Louis?” There’s a couple examples of where I see the flexibility in practice.

Louis Diamond:

Yeah, I think one more too would be the concept of being able to shop the street. I’ve heard it described as becoming a buy-side advocate for your clients versus being a professional seller. So meaning, if I’m affiliated with an RIA or I’m operating my own RIA, there’s no selling away like there is at a wirehouse or at certain BDs. So if I have a client who’s trying to get a $10 million loan for a new building that they’re breaking ground on, if I’m at UBS, Merrill, Morgan Stanley, captive to a BD, I can go to my firm and say, “Hey, this $10 million loan, here it is. What are the terms? What are the rates? Will you take on this business?” And the firm will say, “Yes. No. Yes, here are the terms. Here’s the caveats, et cetera.” But it’s a very closed market process and an advisor has to live and die by what their firm says.

Versus in the RIA world, it’s, “Okay, I have relationships with nine different banks and I can go to these different banks and private credit funds and whoever and really create either an option process for my client or really just help them in a fully agnostic open way.” And we see the same thing when it comes to alternative investments. No one at a wirehouse, let’s say, is complaining that they don’t have enough alts that they can offer clients. Those firms have done an amazing job with really boiling the ocean and having tons and tons of options for private investments, hedge funds, et cetera. But if you’re in the RIA world, you can take it to the next level and say, “Hey, this $3 million startup company that my friend is starting, I’m going to help them raise capital,” or, “My client wants to get a syndicate of investors together to have a direct investment into a qualified opportunity zone fund that they’re starting. Let’s do it when we can advise on it.”

So it really expands what an advisor is able to do on behalf of clients. Like to me, that’s the most interesting or exciting part of the RIA model. You can get some of that within the BD world, but to me, when an advisor’s business becomes more sophisticated as far as what their end client’s needs are, it tends to translate better to the RIA world than the BD world. Not to say there aren’t ultra-high net worth focused advisors at BDs, but because of that additional flexibility, autonomy, customization, et cetera, that speaks more RIA. So again, absolutely not down at all on the independent BDs because I think there’s a massive home for them. Josh, let me turn it back to you. I’m rambling now. Give me the pitch for an independent BD. What are the things that are misperceptions that people have? What are the advantages that an independent broker dealer like an LPL or a RayJ or a Cetera have over RIAs or over other models in general?

Joshua Tomolak:

Absolutely. And I’d say I’ve learned more over the last six years from some of your ramblings than most people learn in an MBA course, so keep doing what you’re doing. But it’s funny being in this position now, having spent so much time sort of selling against the IBD model within TD Ameritrade, but what I’ve learned is it’s a good home for everybody. And a lot of times the advisors that they’re entrepreneurial enough where they like having their name on the door, but they’re not so entrepreneurial where they want to build everything out themselves, that’s where the independent broker dealers absolutely kill it. Their economics have gotten to a point where they’re really competitive. They offer transition capital that isn’t even going to be comparable in the RIA space unless you’re selling a minority share of your business. And you mentioned LPL, or we could really list all of the major ones, there’s not a department that they don’t have.

It could be as nuance as finding 403(b) payroll slots or it could be as mainstream as fixed income or setting up events. There are all kinds of really neat departments that these all under one roof independent broker dealers have invested in. And a lot of times they make an effort to make you very much aware of all of the support because most people don’t use it. So I would say for the advisors that are looking to get their improved Toyota Tundra, then you can get probably 70 or 80% of what you want within the independent broker-dealer world. And you can also keep 20 or 30% of the stuff, maybe more that you really liked at your previous firm. So I think that’s where it really shines. I sometimes call it an incremental change rather than a transformational change. But for many advisors, incremental is really good enough if you get to keep the familiarity of how you’ve been doing business for the last 20-some years, but you’re able to get net improvement on the things that were really bothering you.

Louis Diamond:

Well said. Something that I’ve seen that’s been… I guess this could be either pro or con depending upon the advisor, but with some broker dealers, letting an advisor co-brand with them or really having a real consumer-facing brand, whether it’s, “I’m a franchise owner with Ameriprise,” or, “I’m independent through Raymond James,” or, “Running my own practice through Wells Fargo FiNet,” or, “I’m independent with Northwestern Mutual.” There’s definitely some brand cache or brand familiarity with some of those firms that may or may not be the same if you’re in the RIA world. So I would agree there’s a lot to like about the independent BD world and there’s a fit for people that is absolutely better with independent BDs than on the RIA side. Even if some people would say RIA is better, we’re cleaner, I wouldn’t say that. To me, it’s all about what an advisor’s goals are and then matching that up with what these firms do.

And there’s never a perfect option. I jokingly say, “If there was a perfect firm, we wouldn’t be in business.” Every firm has their advantages or disadvantages. And depending upon where an advisor’s coming from, their style of business, their pain points, that’ll match up really well with on firm or one type of firm or one model than the other.

Let’s pivot a little bit to the RIA world. A lot of your comments have been more about advisors affiliating or joining RIAs, this whole supportive version of independence concept. But what about advisors who want to go and start their own RIA? Either they’re leaving a captive firm and taking the entrepreneurial route and starting their own firm, or they’re leaving an independent BD to go start their own RIA. What do you see as some of the biggest misconceptions that advisors have about that move?

Joshua Tomolak:

That’s probably my favorite topic because there are the most misconceptions I think in this space.

Louis Diamond:

I’d agree.

Joshua Tomolak:

And I would say there’s 9 out of 10 conversations that I have with advisors and teams, they start off with the launching an RIA in mind or at least RIA curious and they want to understand what’s out there. And probably less than half the time do these folks end up actually launching their own RIA, which is okay because the ones that do are massively successful and they know they’re dang sure that’s exactly what they want to do. I think it gets a little bit romanticized sometimes that they’ll say, “Oh, I’ll just give Schwab a call,” or, “I’ll just give the custodian a call,” as if they were shopping independent broker dealers. That’s fine. You can do that and they will help you, but there’s quite a bit more to think about. And it’s not, in my opinion, the same as evaluating independent broker dealers.

If it’s all right, I was taught the four pillars of the RIA model. I can go through that with you really quickly. So the way to think about the RIA space is in four pieces. And shout out to a friend, Eli Suarez, that taught me this years ago. The first pillar… Thinking of four pillars on a bar stool, if you will. The first one being administration. And this is your compliance, this is setting up your ADV, your LLC, all of your business formation documents. The second piece being technology, what do you actually want to use? Because the benefits of the broker-dealer world and the supported independent world is they’ve already built it for you. They’ve already paid for it and scraped their knees building it. In this case, you have to. And for some people, that’s really exciting to source financial planning software and portfolio management software and your CRM and tax software, et cetera. For some people, it just sounds like a huge headache.

The third pillar being custodians. I have them third because you want to make sure that the right custodian can integrate properly with the technology that you’ve sourced that you’re passionate about. And then ultimately transition. What does a transition really look like? What are my legal and regulatory requirements? How does this work? What are the timelines? Things of that nature. So I guess I would say in closing that if those four things are things that you really want to own, then you’re in a really good position to consider an RIA launch. What do you think, Louis?

Louis Diamond:

I think that’s a great framework to break it down. Not just be like, “Okay, I can tolerate that,” or, “My team can do it,” but I think you have to be pretty excited about rolling up your sleeves and customizing and doing it yourself because in our experience, there’s a nominal differential between the economics of running your own RIA versus affiliating with an RIA or going to an independent BD. All the extra work and responsibility, you’re not really going to make it up, at least on the front end, on a higher net payout. So it has to be more about what the model means to you and having a vision that you don’t think anyone else can accomplish other than yourself.

And looking at that crazy ever-expanding Michael Kitces’ FinTech map and there’s 500 different logos on it and being like, “Yes, that’s what I want. I want to go through this. I want to pick the seven pieces of my tech stack that work for me,” rather than getting, “Here’s the tech stack, take a demo, you like it, you don’t like it, take it or leave it.” To me, the two biggest misconceptions people have about the RIA world is one, “I’m going to have to be a full-time chief compliance officer,” and just that compliance is this boogeyman, this terrible, scary thing. In some ways it is. But the reality is most, especially startup RIAs will fully outsource compliance to a firm or they’ll hire a compliance consultant or firms that are big enough even will hire a CCO or repurpose someone on their team to be CCO. But compliance is much more streamlined and simpler than BD compliance. And ultimately, it’s compliance that’s being built for your business rather than compliance that’s being built for a publicly traded multinational company that supports 20,000 financial advisors.

So I think compliance is always a big misconception. It’s definitely what a lot of firms will pry upon when they’re saying like, “Oh, you’re going to own all the legal and regulatory requirements. You could, but it’s definitely not a requirement.” And then I think another one is folks sometimes underestimate and overestimate the operational burden and how much work it is to start an RIA. Sometimes people just… They’re perfect for the RIA world, that’s their goal, but they get stopped in their tracks. They don’t really know what to do. But what we’ve seen, we said it earlier with so many different outsourcing solutions and different service providers that have popped up, if you have the fire in your belly to go build something, it doesn’t mean you’re doing it by yourself. I mean, that’s what firms like ours do. The custodians are very helpful. On the flip side though, I have seen advisors chasing payouts say, “Hey, I’m just going to go start an RIA because I want to make another 1 to 3%,” or whatever it comes to and they drastically underestimate what it really takes to build a successful firm.

Joshua Tomolak:

Exactly right. I think that’s my favorite one, Louis, overestimating and estimating the operational burden there is you could have the same conversation with two teams and it can go the completely different direction.

Louis Diamond:

Josh, let’s wrap here. I got one more question for you that I think is an exciting one, but give me three key trends or storylines that most people don’t know about or aren’t talking about that you’re passionate about or that you’re sharing with advisors or counseling today.

Joshua Tomolak:

Sure. This is the free advice portion. And I’ll tell you what, Louis, if it’s all right with you, I’ll give you two and I would love to hear one from you as well. The first one I’ve seen in both the independent broker-dealer and RIA space is the minority investor concept. A lot of folks will talk about the idea of taking chips off a table and starting to partially monetize your business. I think that’s all important, but what I’ve found is that a lot of advisors really want their partner, whether it’s an RIA broker dealer to help them grow. And that could be with M&A opportunities, that could be with traditional recruitment of advisors, that could be building a business plan. But the minority investment part really helps accelerate that for a lot of businesses because all of a sudden, not only are you cashing out a small part of your business, but you’ve just created an ally with the parent entity, it is now much more likely to help you grow in that capacity because they’re insulated from it and they profit when you profit.

So I think it’s easy to be shortsighted and say, “Well, my equity’s going to keep growing. Why would I sell you a piece of this?” But I counsel folks often to really think about what that long-term strategic partnership is and making somebody a real equity partner rather than just a vendor that provides you with technology and regulatory coverage. The other one I’d say is that… And this one’s really important to me, that business formation is far more important than your assets under management. Said a different way, the way you build your business is going to make your business far more valuable than the number of dollars underneath your name. And what I mean by that is, just to use an example, a sophisticated, well-built, centralized, scalable and repeatable business, whether it’s an RIA with a broker-dealer that is going to fetch a far higher M&A multiple than a OSJ that’s five times the size that just has a bunch of 1099 independent advisors underneath the umbrella.

What we’ve seen in the M&A space is that if you’re going to shell out 50, 60, $80 million for somebody’s business, you want to know that you have this business for the long term. So I would certainly counsel people that have been around maybe far longer than me to take a look at how you’re building this and put together a business plan on what those next 10 years should look like and not necessarily fall into the trap where your only revenue source is the override that you receive from a firm and then you in turn pay to the advisors on your team.

Louis Diamond:

Well said. I really like that line. We’d probably do a whole episode on what are the tips and tricks for building a business with the end in mind? Like the Covey quote, “Begin with the end in mind.” Transitions are like… They’re a bear. I mean, there’s no way to sugarcoat it. Advisors, when they hear transition, if you ask them, “Don’t think about it, give me your reaction.” “Terrible, risky, a lot of work. I’ll never do it again. My friend did it and it was terrible. What if my clients don’t come?” It’s all these negative emotions. And in many cases, I don’t blame an advisor because it is a big act. But to me, if someone is weighing making a transition, whether a wholesale business model change going from being an employee to being independent, going from being an advisor at an independent BD to starting an RIA, or even going independent BD to independent BD, it’s an opportunity if you rise to the occasion to build with this next act with intentionality.

So whether it’s restructuring compensation for your team, converting people from 1099 to W2, putting in place new workflows, changing how investments, instead of it being each individual advisor doing investments to more of a centralized model, cleaning up workflows, really investing in data, investing in AI. It’s something that I think, again, we can have a whole episode on it, but I think it’s a great one. Build the business the right way. And obviously, businesses that are larger, theoretically, sell for more, but we’ve certainly seen businesses that are half the size of a larger one sell for a similar amount or more because they did all the right things and the larger one did the things that really turn off a buyer or detract from a valuation. Let me give you one more and tell me if you agree, but I think we’re in this moment when Altruist, the upstart, a new kid on the block custodian, they launched a basically tokenization of cash in a way to automatically agentically source or sort cash to the highest yielding money market.

And you’re like, “This is fricking wonky. Louis, why are you telling us this?” I think this is an important one just to keep a watchful eye on. I have no idea how this is going to shake out, but really the biggest way that independent BDs or even custodians like Schwab and Fidelity really make money, it’s not on their overrides from practices or the admin fee or the custody fee. It’s really on net interest margin. So how much the broker-dealer or the firm is making on client cash and brokerage accounts relative to what they’re paying out the client. It’s essentially like free margin to these firms. And this concept, I think, has massive potential for disruption for the business model. Again, I don’t know what it’s going to look like, whether it means platform fees that are instituted at all these firms, whether it means certain models would be more beneficial than others, whether it means nothing’s going to change, which is probably the right answer given this industry.

But it’s something to keep a watchful eye on just if your firm institutes a new platform fee or there’s a fundamental way in which your firm can no longer make money. How are they going to make it up? Are they now going to be uncompetitive? They’re not going to have as much scale or profits to invest in the platform. Is it going to cause even more consolidation in the industry? So to me, that’s the one pretty under the radar, pretty wonky storyline that I don’t think enough people are talking about, but has the biggest possibility for disruption across their space than anything I’ve seen in a while.

Joshua Tomolak:

Sure. That’s the whole iceberg. Not a lot of people are talking about it. It’s not poking out of the ocean, but it’s going to be continuously brought up. I think it’s a question that a lot of advisors are going to have to ask these firms. And at the end of the day, the firms aren’t the bad guys. They have to make money too to provide a quality product. So where the money comes from matters.

Louis Diamond:

Exactly. Josh, this has been awesome. I learned a lot talking with you and just having your objective consulting hat on what I think are really the differences between IBD and RIA and some of the key trends and storylines to watch has been instrumental. I’ll also give a plug that on our website and we’ll link to it in the show notes, we have a really helpful one-page reference guide going through the differences between independent BDs or IBDs and RIAs. So feel free to click on it. We’ll make sure it gets in your inbox. Josh, thanks again for joining us today.

Joshua Tomolak:

Yeah, thanks for having me, Louis. It was a pleasure.

Mindy Diamond:

As a financial advisor, you hold yourself to the highest standards of integrity, honesty, and credibility. You are successful because you take your professional responsibilities seriously and are dedicated to your clients. But are you living your best business life? Are your goals aligned with your firms or could a better option exist? Should I stay or Should I Go? is a book written with you in mind. It’s a self-guided journey that walks you through the key steps that we take with our advisor clients. This strategic thought process and roadmap to professional self-discovery is designed to help you ask the right questions and think critically and objectively whether you’re considering change or not. Learn how to get your copy at diamond-consultants.com/thebook.

Matt Kilgroe shares how Cyndeo Wealth Partners grew from a newly launched $1.2B RIA to a $3.5B enterprise, and why the next challenge isn’t independence, but building a firm capable of reaching $25B. 

Five years after launching Cyndeo Wealth Partners from UBS, Matt Kilgroe returns to the podcast to discuss what happens after independence. Rather than focusing on the transition itself, Louis and Matt explore the next phase of growth: scaling an advisory business, attracting talent, developing niche expertise, taking on outside capital, and building an enterprise designed to last. Along the way, Matt shares how Cyndeo expanded from $1.2B to $3.5B, why serving professional athletes required a different business model, and what led the firm to partner with Rise Growth Partners as it looks toward a $25B future. 

For many advisors, independence is viewed as the finish line.

For Matt Kilgroe, it became the starting point.

When Cyndeo Wealth Partners launched in 2020, the goal wasn’t simply to leave the wirehouse behind. It was to build a business with the flexibility to grow in ways that simply weren’t possible before.

Five years later, that vision has evolved into something much larger. Cyndeo has nearly tripled in size, expanded its niche serving professional athletes and entertainers, recruited advisors, added specialized operational talent, and recently welcomed Rise Growth Partners as a minority investor to help accelerate its next phase of growth.

The conversation explores what changes when firm leaders stop thinking like advisors managing successful practices and begin thinking like CEOs building enduring enterprises. The discussion spans succession planning, capital strategy, recruiting, organizational design, and the mindset required to scale from billions to tens of billions—all while remaining focused on clients and culture. 

> Download a transcript of this episode…

What did Matt learn after transitioning nearly 98% of his clients? (06:20)

Why client relationships—not firm logos—proved to be the firm’s greatest asset during one of the most challenging transitions imaginable.

How did Cyndeo nearly triple in size in five years? (16:10)

Matt discusses the combination of niche specialization, disciplined organic growth, recruiting, and operational investment that fueled the firm’s expansion.

Why has Cyndeo become a destination for professional athletes? (17:15)

The conversation explores how deep industry expertise, fiduciary flexibility, and specialized service created a business that would have been difficult to build inside a wirehouse.

Why bring on a minority capital partner when the business was already thriving? (24:15)

Matt explains why succession planning, future recruiting, and long-term enterprise growth made outside capital the right decision.

How should advisors think about ownership versus compensation? (35:40)

A candid discussion about enterprise value, equity, and why many advisors underestimate the long-term economics of ownership.

What does it actually take to scale toward $25B? (42:20)

From hiring executive talent to expanding geographically, Matt shares how he’s thinking about the next chapter of Cyndeo’s evolution.

Independence creates opportunities that extend well beyond higher payouts, including enterprise value, recruiting flexibility, and ownership.

Scaling a business requires investing in operational leadership, not just adding advisors.

Specialized client niches demand expertise that goes well beyond investment management.

Outside capital can accelerate growth when it’s aligned with long-term strategy rather than an exit.

Building an enduring enterprise requires thinking differently about succession, talent, governance, and equity.

https://youtu.be/WRYJd9Lkt7o

“Don’t rent your practice. Own it.”

“You can’t work in those niches and not be a fiduciary.”

“We’re not done.”

“The road from $3B to $25B is going to really compound on your equity.” 

To support its next phase of growth, strengthen succession planning, recruit additional talent, and benefit from the experience of leaders who have successfully scaled wealth management businesses before.

Through a combination of consistent organic growth, specialized client niches, advisor recruiting, and investments in operational infrastructure.

Niche client segments often face unique financial decisions involving private investments, business opportunities, and career transitions that require specialized knowledge and a fiduciary framework.

Matt points to greater flexibility around private investments, the ability to build specialized client experiences, reward employees with equity, and create an enterprise with lasting value.

The discussion highlights the tradeoffs between creating your own firm and joining an established independent enterprise, emphasizing that ownership and long-term equity often matter more than headline payouts.

A willingness to invest beyond advisors alone, adding executive leadership, expanding geographically, recruiting strategically, and maintaining a long-term enterprise mindset.

To support its next phase of growth, strengthen succession planning, recruit additional talent, and benefit from the experience of leaders who have successfully scaled wealth management businesses before.

Through a combination of consistent organic growth, specialized client niches, advisor recruiting, and investments in operational infrastructure.

Niche client segments often face unique financial decisions involving private investments, business opportunities, and career transitions that require specialized knowledge and a fiduciary framework.

Matt points to greater flexibility around private investments, the ability to build specialized client experiences, reward employees with equity, and create an enterprise with lasting value.

The discussion highlights the tradeoffs between creating your own firm and joining an established independent enterprise, emphasizing that ownership and long-term equity often matter more than headline payouts.

A willingness to invest beyond advisors alone, adding executive leadership, expanding geographically, recruiting strategically, and maintaining a long-term enterprise mindset.

Article: Your Practice Isn’t Worth What You Think
Most advisors misjudge their business’s value, not because of the number, but because of the framework. Learn what really drives enterprise value.

Rise and Reinvent: Joe Duran on Building and Rebuilding World-Class Firms
He’s built and rebuilt some of the industry’s most successful firms and now he’s helping others do the same. In this episode, Joe Duran, the founder of Rise Growth Partners, shares lessons from building, selling, and starting again, and how staying curious and adaptable fuels lasting success.

Prior to launching Cyndeo Wealth Partners in 2020, Matt ran advisory teams at Merrill Lynch and UBS Financial for 29 years. Providing guidance, counsel, and strategy for families the firm serves is Matt’s passion. In addition to his role as an advisor, Matt works in a leadership capacity for Cyndeo while also helping with business development.

Matt has been recognized by Barron’s as a Top 1000 or Top 1200 Advisor consistently since 2009. In 2020 Forbes named him to their “Best-In-State Wealth Advisor” list. A graduate of Eckerd College, Matt has served on the Board of Trustees at his alma mater since 2012. His three children are his pride and joy. Daughter Carrington owns Sunstate Yoga studio in St. Petersburg, son Kent is a financial advisor with Cyndeo, and daughter Jillian recently graduated Florida State University. An athlete in college, Matt continues to enjoy staying in shape, playing basketball, and bike riding.

NOTE: The views and opinions expressed by the guests on this podcast are their own and do not necessarily reflect the views and opinions of Diamond Consultants. Neither Diamond Consultants nor the guests on this podcast are compensated in any way for their participation.

True Alignment: Advising Business Owners on Wealth, Significance, and Value

A conversation with Jason Diamond, Nick Hubert and Taylor Gentry – Founding Partners at Panoramic Capital Partners.

Jason Diamond:

Welcome to the latest episode of our podcast series for financial advisors. Today’s episode is True Alignment: Advising Business Owners on Wealth, Significance, and Value. It’s a conversation with Nick Hubert and Taylor Gentry, Founding Partners, Panoramic Capital Partners. I’m Jason Diamond and this is the Diamond Podcast for Financial Advisors.

Mindy Diamond:

At Diamond Consultants, we help elite advisors identify the right environment for their businesses to thrive, whether that’s at a wirehouse, boutique, or independent firm. With nearly three decades of experience, we’ve guided thousands of advisors and represented more than a quarter of a trillion dollars in assets transitioned. And each year, one in four advisors managing a billion dollars or more who change firms are our clients. Our process is education-driven and based on building relationships, starting as your strategic partner well before you’re even thinking of a move. To schedule a confidential conversation, call us at 908-879-1002.

Wondering why advisors change firms and where they’re headed? Are transition deals going up or down? Those very questions and more inspired us to create our annual advisor transition report. It’s the award-winning, data-driven resource designed for advisors that connects the dots between the motivations around movement and the firm’s appetite for top talent.

Arm yourself with the knowledge you need to make smart decisions. Download your copy at diamond-consultants.com/transitionreport.

Jason Diamond:

Advisory firms that work with business owner clients typically operate through a fairly traditional wealth management lens. The business may be the source of the wealth, but the advice itself often centers around investments, planning, and asset allocation, yet Panoramic Capital Partners approaches that equation differently.

Nick Hubert and Taylor Gentry are the founding partners of the roughly $450 million RIA, serving about 150 families with a seven-person team. And while they come from very different professional backgrounds, Nick with more of a relationship and storytelling orientation, Taylor from the analytical and private equity side, they’ve built the firm around a shared philosophy tied to what they call personal significance, personal wealth, and personal value. A big part of that philosophy, or the north star as they put it, is applying some of the same accountability and long-term thinking frameworks commonly seen in private equity to the advisory relationship itself, not in a transactional sense, but in helping clients think more intentionally about decision-making, alignment, and outcomes over long periods of time.

As a result, our conversation delves deeply into the private equity world, reframing how clients and advisors should consider this important tool as both a growth mechanism and a strategic part of their client’s plans. We talk about how that perspective also shapes not only how they think about serving business owners specifically, but also the role private equity should play in wealth management. Then we take a view of their long runway and how they and other younger advisors might see things differently about building firms today and why clarity of vision may matter more than sheer scale in the years ahead, and much, much more. It’s a narrative that is refreshing and informative, so let’s get to it.

Taylor, Nick, thank you so much for joining. Walk us through your background. What brought you to the world of wealth management? Nick, let’s start with you.

Nick Hubert:

Sure. I think I got my first taste of the industry actually in a sophomore year of college internship, or I interned at Morgan Stanley here in Oregon. I studied finance and accounting at University of Oregon, and so I had this affinity for finance and markets and had that privilege of having that internship. So I had it early on in my career. Ultimately ended up setting my sights on doing investment banking and going that route and did that for a short period of time. Ended up not going very long due to a medical reason, so you don’t have to be that sorry for me. And ultimately started my career in business consulting before pretty quickly realizing that I want to get back to finance, back to investing these things that just felt like core competencies and that thing that you keep coming back to when you’re alone in the middle of the night thinking about stuff, it was always that. Just had this desire to work with smaller units than large corporations, which is great for wealth where you get to work with families and small businesses. And so it was just a natural alignment that took me back full-time to the space in 2016.

Jason Diamond:

I like the framing it through the size of the unit you’re working with and having more of an impact on the family.

Taylor, what about you?

Taylor Gentry:

I’m a little more circuitous, if you will. Spent a couple of years in investment banking, so you can be sorry for me. Nick and I met in undergrad at the University of Oregon, had the opportunity to work in this investment group together where we were investing a portion of the university’s endowment. And like Nick, interned in wealth management and kind of walked away from it going, “Boy, that’s boring. I don’t really like that.” And so moved to New York, cut my teeth in banking for a couple years and we were working… So an investment bank for context, helping companies raise debt, raise equity, and with mergers and acquisitions, we’re working with huge companies. So the Mattels of the world, the largest toy company in the world.

Like Nick, realized, “Hey, I’m going to work with smaller companies that we can get our arms around a little bit better and be more helpful with and have a bigger impact on.” So spent about 10 years with a private equity firm in the western half of the US and we invested in companies in what’s referred to as the lower middle market. So companies doing 50 to 300 million of revenue. And we would invest in those companies, grow those businesses and then look to sell them. Awesome experience, learned a ton, got a bunch of experience around how to invest in companies, how to grow businesses.

Then had the opportunity to step into the CFO seat of a couple of different operating companies during that time. It was just a great learning ground, but also to see a whole bunch of different situations. Nick and I have always invested in things together. We’ve worked on things together and we’ve always wanted to work together full time. And a few years ago, the stars really just aligned to say, “Hey, what would it look like to create a differentiated offering in the wealth space where we can blend my background on companies, transactions, how to draw on scale and all those pieces and really marry that with the wealth management piece?” And Nick will get into that further, but it’s just a really unique way to partner with families and companies that are smaller which can have a really high impact experience with those families and really move them through their life journey, if you will.

Jason Diamond:

Yeah, there’s a lot to unpack there and we’ll get to some of the elements of how you run the business today. First of all, you can’t fool me by using a toy company as your example to make investment banking more interesting. I’m just kidding. Actually, my real takeaway there is you have a skillset that is incredibly relevant in the current wealth management ecosystem, especially in the model you’re currently in. So let’s talk about that a little. Tell us about your current chapter, which is Panoramic Capital Partners. Who do you serve? What types of clients? Give me some perspective on size as well.

Nick Hubert:

I’m going to take this first. Taylor can do the PE background side and give you a bunch of numbers. I’ll give you the story and see if we can piece it together that way.

Jason Diamond:

I get the impression you guys use that line a lot.

Nick Hubert:

Oh, no, that’s the first time. How’d it land? Jason, I spent eight years at our prior firm with our third founding partner, Andrew, and he was at that firm for 30 years. And so we’ve got this core DNA that we’ve always carried of serving high net worth families in a very holistic and deep planning-based capacity, which I think a lot of modern firms say that. And so that’s not necessarily that different, but it is a DNA that carries through.

When we got struck with this vision of launching Panoramic and what inspired us to build the firm, it was as, Taylor outlined, around this idea of how do we partner with entrepreneurs and business owners more holistically across their entire entrepreneurial journey, not just around the exit as is so often where the gravity of the conversation sits. And so our firm vision and inspiration was all around that. And since launching in May of 2024, it has been about how do we bring that vision to life with a different business model. And to your point, there’s a bunch to unpack there, but that is ultimately the founding vision of what we are trying to build here overall and what inspires us every day to say, how do we, as Taylor mentioned, bring the combination of skillsets to bear in a way that allows us to be a better partner along the entirety of the journey as opposed to just towards the end when assets traditionally show up, so to speak?

So that’s a story from a vision perspective. Taylor, I don’t know what you want to add to that.

Taylor Gentry:

As Nick outlined, it’s the ability to work with folks throughout the lifecycle. So in private equity, you invest in a company, you work with that management team for three to seven years and then you sell the business and move on to the next project or deal. And really, it’s the deal mechanic that is the value creation. Whereas, with what we are building here, we have the opportunity to really step along the journey with folks when they are in the early phases building what we talk about as the middle phase of allocating, and we’ll talk about this further, and then really the third phase of stewarding capital along the way. And it’s a life cycle or entrepreneurial journey that we’re able to be hand in hand with folks over decades opposed to measured in three to five year spans.

Jason Diamond:

So it sounds, and you’ve both kind of touched on this now, your different backgrounds, you view as very much a positive because it gives you, Taylor, the more in the weeds analytical perspective. Nick, you’re probably more the storyteller. Do you find that to be a benefit when you’re running your firm every day? And are there instances when it’s a negative? Is there ever a time when you say, Taylor, just maybe more for you, not coming from this world, you don’t speak the same language?

Nick Hubert:

Do you want me to drop off the call so Taylor can be honest and he can give you the scoop and then he can jump off and I’ll give you the scoop?

Taylor Gentry:

Jason, we talk about that a lot, honestly. I think it is atypical for someone with my background to step into the wealth space maybe more so. And we leverage that because we have the ability to work with folks on how do you drive value in the company, how do you set the business up for a potential sale exit or transition internally? But this business, historically, we’ve talked about it as almost like two tracks. You have Taylor on the quote unquote business consulting or the business work track and you have Nick on a wealth management track. It’s really not the case. And really, the power is the ability for these two pieces to come together and there isn’t a conversation we have with clients where those two perspectives and backgrounds or contexts aren’t married into one to create really truly holistic advice.

And so Nick will probably tell you otherwise, but I haven’t seen an area yet where our two backgrounds has been a negative. It’s actually been immensely positive. And then on top of it, in terms of kind of building out the firm, Nick is more of a traction visionary and I’m more of the traction implementer. What’s amazing about it from our perspective is the partnership we have allows us to, A, recognize that, B, name it, and then C, leverage it in terms of being able to dole out duties and maximize our success together.

Jason Diamond:

Nick, anything you’d add?

Nick Hubert:

I think that’s all right. I mean, Jason, your question was from an operational perspective. I think a lot of Taylor’s view is from a client perspective, which is spot on that the overlap of that is really helpful for clients and I think what allows it to be a different experience for them. Internally, operationally, I think that where you could see friction there amongst partners with differences, and I think you do see that, and at the same time, Google was the one who did team research 15 years ago where they put out what you really want, is similarity and vision and differences in skillset when building a team. And so I think we’ve been intentional about that and it’s been really helpful for… Taylor and I functionally met in a quasi-professional setting back in 2011 and developed a friendship quickly, so we’ve got that deep level of friendship that underpins all of it. And same with Andrew and our time working together.

So part of it is there’s just such a strength of relationship amongst us that we give space for each other’s differences and look for those as assets as opposed to negatives, but in some sense, beauty in the eye of the beholder as is the case with anything.

Jason Diamond:

Yep. I appreciate you adding that context. I’ll be honest that when I first encountered your firm, my reaction was your core value prop of serving business owners is not all that differentiated. And then I learned more about the way in which you serve business owners. Can you talk about that? Because a lot of advisors in general, but then I think more specifically, a lot of RIAs would say, “We service primarily business owners.” Tell me how do you do it in a way that’s different and meaningful?

Nick Hubert:

I’ll take a first stab at that and then Taylor can maybe add on with specific stories. The wealth space is an awesome business and it’s a place where it’s very difficult to differentiate. And so we think a lot about that through the lens of how do we grow this business well for the long period of time to create opportunities for clients and employees. And so we spent a lot of time thinking about that, not only for the sake of differentiation, but also how do we actually just continue to add value to clients? Because if we add value in a different way, growth will take care of itself.

I’d say one way of cutting that is we revisit the mission is through this idea of, okay, if I want to be a partner along the journey, it’s about more than a single transaction, more than a single exit, whatever that might be, or a series of transactions as wealth is often created over a series of transactions. It’s this idea of how do we focus on wealth creation and driving business value as the engine of wealth creation for entrepreneurs and what we call personal significance, which is the life of the entrepreneur. And so there’s a next click down framing of our framework that we work through that lens.

I think the most important piece for us has been how do we build a business model that actually brings that to life and that’s the trick because we can say that, and if we basically still just operate out of an AUM-based or an asset advisory fee-based business, the reality is my incentive is still towards getting assets out of the entrepreneurial environment, so to speak, into a place that I can manage them, which may or may not be the best thing for the entrepreneur based on where they are at. And so our current work continues to be around how do we build that business model. So layering in different ways of engaging, whether it’s a retainer fee or some other way of engaging so we can start earlier when assets aren’t there and actually encourage the entrepreneur, “No, keep reinvesting in your business. It’s your highest rate of return right now and it’s where the investment needs to go.” I don’t want to have a conflict in giving that advice.

And so I think step two here has been building that business model from an actual engagement perspective to enable us to enact the vision. And then I think the third piece is how do we then build tools that are different than just evaluating pre-exit planning, and as is so often, the toolkit, but actually saying, okay, what are the value drivers of a business? And this is probably where Taylor has a lot more to add because it’s 101 of the PE model, but how do we take the mission and vision of an entrepreneur, what we call north stars, translate those into value drivers, ensure those tie to strategic initiatives in the business, ensure it ties to reporting, and ultimately, how capital is allocated between the business and other investments?

So then that’s our toolkit that we continue to build out to deploy the mission through our business model with tools that back it up. So that’s how we frame it right now. Taylor, we can share stories about how that’s come to fruition to create different outcomes.

Jason Diamond:

Taylor, I’d love to hear that. Let me just add maybe my understanding, because this is what helped me, I think, to really understand how you defer, and Nick and Taylor, correct me if I’m wrong, it sounds like the typical advisor thinks about an entrepreneur, a business owner relationship as the next liquidity event in most cases. And you take the viewpoint that it’s a journey, in some instances, 30 years in the making. It’s not even about liquidity event might come that’s beside the point. Is that a fair summary?

Taylor Gentry:

Yeah. We talk about it as a growing business is a healthy business, a business that is creating incremental value and adding to the multiple in terms of how the business is valued in the marketplace is a healthy business. And so whether you are going to sell that business or retain that business into perpetuity, let’s make a really valuable business and grow a very healthy business. And that’s what we do with clients.

Nick laid out the north star framework. And so how do we actually go about engaging with folks on a practical level? It does start with the north star framework. It’s got five steps to it as Nick outlined in terms of defining the north star, where we’re going, what we’re trying to do and that’s across those three pillars, personal significance, personal wealth and business value. And that personal significance has to be held at that same level. Otherwise, we find folks that are mid 50s, their business is crazy valuable, they’ve got a lot of dollars, but their family life isn’t where they want it to be because they didn’t take care of that along the way.

So we lay out a place map that says, “Hey, these are the north stars that we are aligning on and coming back to every month when we work with these owners.” We then push that into, okay, what are we trying to do on the business side of the equation? Let’s lay out what is going to drive the value of the business from a multiple and enterprise value perspective. We push that into a set of strategic initiatives that is tactical, who owns what, when’s it getting done, and are we red, yellow or green on it? We then build out the performance reporting package with folks. And so that is a monthly reporting package that says what happened last month and what operational data are we looking at to be able to improve the business month over month and get a good feedback loop going into the company. And then the last piece is around capital allocation that Nick mentioned where if the business generates a million dollars, where’s that capital going?

I think there’s a lot in there and it’s really deep, but if you zoom all the way back out, it’s take a private equity style playbook where private equity firms come and invest in a company. And what do they do after close? They put in place good financial reporting, good operational reporting, and then hold the team accountable to that reporting and those results on a monthly, quarterly, and annual basis. And so this is not rocket science or something that’s never been seen before. It’s just most business owners that have never experienced this private equity world don’t have access to it and don’t know how to go about doing it. It’s a relatively long process to get that installed with companies and with teams to really dig in and understand it, but it’s building out those packages to be able to say, “Okay, what happened last month? What changes do we need to make and what are we doing from a initiative perspective to drive the business forward?”

So to Nick’s point, it was previously, this was all about liquidity planning or from a wealth management perspective, it’s about the exit. This is about how do we make a more valuable business along the way, and that’s going to be good for the entrepreneur as they move through the journey.

Nick Hubert:

When we were around the dinner table, the proverbial dinner table creating the vision of this firm, it was around this idea of the silver tsunami and everything that everybody reads in the headlines of this massive wave of transition, this generational transition of business ownership that we could help facilitate. So we launched with that thesis in some sense.

In addition to this broader journey perspective, we have gotten to this place by following the market and listening to what entrepreneurs actually want through the big unlock was honestly in a deal process with one of our clients where we realized, “This is a great deal. This person’s going to put a ton of money in their pockets, secure their future,” and it’s completely the wrong outcome for the entrepreneur because it’s thinking all about the deal, not thinking about what this person didn’t want was an exit. They wanted a different relationship with their business, and that required, what do you actually want out of life, that personal significance piece? And it required, “Hey, if we can actually create a layer of team members and reporting that allows you to manage this like a board chair would do as opposed to a highly engaged CEO. That’s actually what you want. You don’t want out of this business. You want to still have this be a huge rock in your life.”

And so we’ve ran through that door, said no to the deal with them and have been building the infrastructure around this, and that was the unlock and aha moment for us. There’s something bigger here and that’s what then inspired, in some sense, the broader build out of the toolkit, but I think puts more meat on the bone of actually saying no to a deal, which is not the classic wealth manager outcome to get to a way better outcome for the client and is ultimately still an awesome client for us as a firm and somebody that we can go build with for the next 20 years.

I think just telling it through the lens of a story that’s different than what’s normal, so to speak, is a way to frame that up.

Jason Diamond:

It’s such a hyper focus on a fairly long-term and honestly nebulous potential outcome. You don’t have certainty. That, I think, is why most advisors would prefer the near-term liquidity. I mean, it’s not a secret, right? You can bill on assets, firms are incentivizing it and it’s a pretty direct recipe to net new asset growth, but it’s certainly a refreshing point of view. It resonates with me. I’m wondering if it’s resonated with clients and prospects. I guess what I’m asking is, do they feel that this is something different than the typical wealth management experience for this type of client?

Nick Hubert:

Yeah, Taylor, tell that story of the guy who said, “I’ve had this, but I felt alone.” I think that story of partnership, you tell pretty well.

Taylor Gentry:

Yeah. Jason, it was actually that same client, he had a investment banker, a wealth manager, attorney, and a CPA. CPA said, “The deal’s terrible, you shouldn’t do the deal.” Investment bankers obviously incentivized to do the deal. And so he’s saying, “You should do the deal.” That’s how he gets paid. He had a wealth manager who was silent and he had an attorney who just pushing paperwork.

Jason Diamond:

It’s like the start of a bad joke.

Taylor Gentry:

Yeah. No, seriously, it’s pretty remarkable. It’s like this guy did what he was supposed to do. He put the team of resources around himself. He got professionals in the seat. It’s that no one could connect the dots of all four of those people because they have the seat of those four people.

And so it’s really resonated because there’s an ability to see a bigger picture and connect these dots and say, “Okay, this investment banker is saying X because of A, B and C.” And the CPA is saying it’s a bad deal and that it’s not a market deal. It’s 100% a market deal. This deal is right down the fairway in terms of what the market should value your company at and they just don’t understand how the transaction mechanics should work. And so it’s worked really well from that perspective of being able to be the quarterback or centralized point or personal CFO for folks in understanding where interests lie and also being able to think about what they are pursuing in a bit of a different lens.

I think the second piece on that is where does it resonate for folks? I think that there is a gap in the marketplace that we are still working to close, and that gap is that business owners do not know what this monthly reporting package looks like. They do not know what really good reporting on their business looks like in terms of they have always run their… You’ve got a business owner. They’ve run their business for 10 or 20 years. They have a pulse on the business from their gut feel. That does not mean that the business has been optimized, is ready to go to the next level or is ready for a transaction and go through a transaction because they have not done the work on the backend to understand the moving pieces of the business at a granular level.

This recording package, we oftentimes get this confusion around, well, I’ve got a temporary CFO or a controller or X, Y, Z. That is very different than what we’re talking about. Well, that is all accounting, close the books, have clean numbers. What we’re talking about is how do I marry operational data in the business, number of units ships, number of jobs completed, time on job, operational data to the financials in the business so I can then go make adjustments operationally on how to improve the business and continue taking steps forward.

Jason Diamond:

It’s very clear. Nick, anything you’d want to add to that?

Nick Hubert:

I’d say it’s easy to still cut that from a deal lens and say, look, when an investment partner comes to evaluate a business to sit in their seat for a moment, they’re going to look at the replicability of what that leader has done without that leader still in the seat. And if so many businesses are still reliant on that person and this gets talked about as processes, reporting systems, that ultimately results in a discount to the value of the business because although it can be viewed… For the leader, it’s like, it’s that control thing that entrepreneurs deal with. It’s what made them good. It’s what got you there. And so that transition is really hard. And that’s important from a deal lens because that does a direct impact to value.

And to widen out the scope beyond the deal and to think about the entrepreneur’s life, this goes back to the dynamic that a lot of times entrepreneurs look for the exits because they’ve built something that it’s now owning them and what they’ve built is not resulting in the life that they want. And so how can we use this system to actually change that relationship, as I mentioned earlier, with the business so that they can run it more like an executive might and get out of the knife fight, so to speak, that often is how this can feel for a lot of folks, even for pretty large businesses. It can just feel like you’re a firefighter, you’re in a knife fight, whatever you want to use for that terminology. I think it’s as much about creating a different life outcome and different relationship and owning and leading a business as it is in driving deal value.

Jason Diamond:

Taylor, maybe I’ll ask this of you. Forgive the question, but private equity, I think in our space, has a little bit of a negative stigma at the moment. I don’t think that’s true across the board. I think people appreciate generally the need for capital and there are certainly benefits of private equity. But I’ll say as a whole, advisors are, let’s say, suspicious of private equity. You ever get that pushback? Does anybody ever view your experience or the way you position the story as a negative?

Taylor Gentry:

I think most people that we talk to don’t know what private equity is. They may have seen it in the headlines. They may have some sort of connotation around it. They won’t come out and say that they don’t like it. They don’t know why they don’t like it. The average American business owner, they don’t know what it is or what it means. So yes, you do have to fight that because of the headline piece around private equity, bad actor ABC, and that’s what gets the headlines.

I think what private equity is really good at is taking a business that is not optimized or not running on systems and processes that it can run on. Again, it’s not rocket science is not crazy hard. It’s just the private equity world has created ways to install systems and process that improve the value of the business by way of providing visibility to financials and operations in a way that the owner previously didn’t have.

And so for us, we view it not by any means as the end all be all or the answer. There are clients we’ve worked with that have taken private equity capital and grown successfully, executed on some acquisitions and then exited again. There are clients that have evaluated those transactions and said, “Hey, not for me.” We are actually fairly agnostic to it. What we really spend a lot of our time on is what are we solving for? What’s the end game? How do we use this private equity transaction to get to where we’re trying to go and is it what we want at the end of the day? Because the reality is, if you’re going to stay on and run that business with private equity investment in, there’s a higher expectation on what you need to do Monday morning than when you owned it yourself and it was a little bit of your personal piggy bank too.

Jason Diamond:

I love it because you bring it back to the north star concept.

Taylor Gentry:

Yes, that’s exactly right. It’s what are we solving for and what game are we playing to be able to get to where we ultimately want to go? And for, as Nick mentioned that client that turned down the deal, it was a private equity investment. We got very clear with that, “Hey, here are going to be the expectations. You will have a monthly financial reporting call. You’re going to have quarterly board meetings.” These are things that need to happen in this business to be able to upgrade the management and cadence in this company. You don’t have to do it all tomorrow, but that is how you make a more valuable company, is installing some of these systems, process and cadence. And so we’re working with him now on doing that, just in a private context instead of in the private equity backed environment.

Nick Hubert:

I think there are three things embedded in this. I’d say number one, to Taylor’s point, this is a massive black box, in some ways by design. Wall Street’s had not a great reputation for a very long time of putting things behind the paywall, so to speak. And so we think a lot about our job as empowerment and education.

Jason Diamond:

Education, yep.

Nick Hubert:

Yeah. And so part of it is just, number one, how do we just demystify this thing and name things and take away the go to or bad? Because it can be that, but it should not be that from a core basis. That’s number one.

Number two, a lot of entrepreneurs feel like they cannot get access to this ability to professionalize or level up or whatever these things are without bringing on that investment partner. And so part of our motivation is how do we actually bring this skillset in without needing to bring on an investment partner because oftentimes, that investment partner comes when you’re done, and so you don’t actually get to experience it. That’s number two.

Number three is, Jason, part of your point earlier was like there’s still a trap here of potentially being able to get motivated primarily by the exit. And so again, that gets back to our business model, making sure our price Racing is right, all that good stuff. And it’s also the reality that a lot of businesses, if you just look at a very broad scope of American businesses, a lot of them don’t have value in the marketplace in a massively material way and/or won’t exit in a traditional way. And so the wealth creation journey then becomes much more of a conversation of, how do we manage the balance between investing in the company and distributing out of the company to invest elsewhere because we should actually be creating investment assets along the way because when you get to the exit, there’s no better power position at the moment of exit than already having financial security to some degree and giving you choice in the right deal, not the highest and best deal because you need to fill the piggy bank for retirement.

Jason Diamond:

I just want to be sure to ask because you did mention a couple times your pricing structure. How have you set it up so that you can be more agnostic about this as opposed to the typical… You want to talk about it for a minute?

Nick Hubert:

As it’s structured now, it starts with a retainer earlier on where we are working… As Taylor mentioned, we are going deep in the operational build of the business. We will do that on a monthly retainer. We’re engaging consistently. As assets get built up and if assets get built up, we start to chew that retainer down as assets go up. I think what we are ideally trying to figure out, and still honestly have not figured out yet, is how do we get to parity so that we don’t create an… I want to be able to work agnostically with a client to say-

Jason Diamond:

Yeah, I love it.

Nick Hubert:

… regardless of how I’m engaging with you, that’s the goal. So I’d say we haven’t cracked the code on exactly what that is yet, but mechanically, we’ve got the levers to pull to say how we price and move that retainer down is basically allowing to keep it at par, so to speak, for the client and allowing us to say, “I’m here to engage in making the best wealth creation outcome for you along the way, whether that’s investing in the business or investing outside the business.”

Jason Diamond:

I think that’s the right recipe. I agree. The levers can be fine-tuned, but to me, that’s the model you want to create where you can credibly look your prospects and clients in the eyes and tell them, “Our job is to serve you in the best way… We’re sitting on the same side of the table as you.”

I want to turn this inward for a second. The home cooking concept. M&A, within the RIA independent space, is obviously a hot topic. Have you thought about it? Do you think it’s a critical part of a potential growth trajectory of a healthy, independent firm? I’m curious your perspective. I feel you, Taylor in particular, probably have a unique lens on this coming from the world you came from.

Taylor Gentry:

Yeah, Jason, I think if Nick and I wanted to put as much money as we possibly could in our pockets as fast as humanly possible. It’s a pretty easy recipe. It’s go get some private equity capital backer, roll up a few RIAs, get to a few billion of AUM and then sell it to the next private equity firm or roll it to the next private equity firm, do that a few times. We’d all make plenty of money and go on our way.

We’ve been really intentional on this front, and again, I talk about this is what we want to do for the next 30 plus years. And really being intentional around building a business that has that enduring nature to it, decided to take private equity capital on, you are on a shot clock to some degree. Yes, you’re trying to build a best business, all of those pieces. You get cadence. You get capital. There’s a ton of value there, but you are on a shot clock that is not a shot clock we’re trying to get on at this stage.

I’d say we opportunistically are looking at acquisitions. So we think about it, and Nick and I talk about it all the time, how much of our time should we be spending on acquisitions? And we think of it as 80/20 or even 90/10, 80% or 90% organic growth-focused, 10 to 20% acquisitions-focused. And so we’re actively evaluating those consistently and see deals on a monthly basis that we look at and evaluate, but it’s less of the focus today than it could be down the road.

Jason Diamond:

And Nick, do you think of that when you guys talk? Do you guys call that your true north? Do you think the same way you coach your clients and prospects to say, “For right now, it wouldn’t be the right move for us to take private equity capital and to do this acquisition rollup strategy because A, B and C are more important for us”?

Nick Hubert:

Yes. I think if we take our life north star for Taylor. I’m speaking for Taylor, but we’re close and so we share this of… To Taylor’s point, the life outcome of scaling that quickly with that type of capital backing is likely to create a life that I don’t actually want that’s not good for me, not good for my family, and honestly, not good for our clients at this point. And so that overrides in this case, even though the wealth, north star might say, “Hey, absolutely do that.” At some point something has to win. And so that is true.

At the business side, as the north star is motivated by this mission of the entire entrepreneur journey, the worst thing I could do is shortcut my ability to be on that journey for a long period of time. One of our friends in this space says, “The best thing I can do for my clients is still be in the seat 30 years from now because I’ve lived a good life that enables that.” And I think that’s spot on for us, is everything, it’s so easy in today’s world to be consumed by short-termism and we are intentional in ensuring that we don’t succumb to that. While still recognizing to your point, I mean, you’re in this all day, Jason, right? There’s a massive opportunity in front of us to be thoughtful about how acquisitions fit into this. And I think we want to be open to that in a way that ensures we just don’t lose the core of the goodness of what we’re trying to build.

Jason Diamond:

I think that’s the right answer. The only wrong answer in my mind is we’re not open to this or we’re closed to it. To not at least be opportunistically aware of the dynamics in the market, I think is naive. But also, I’ll be honest, Nick, when I think about the concept of the north star, I have a hard time imagining, because we use a similar concept when we counsel advisors. What is your true north or your north star and your best business life, whatever you want to call it? To me, it does include absolutely the personal piece. I think it’s hard to define it only on the economic verticals because, I mean, I think about this for a transitioning advisor. Almost never is the conversation about crunch the spreadsheet and get us the biggest check possible. It’s, yeah, sure, transition capital is important, but it’s let’s also, we want a better work life and we want freedom to market and blah, blah, blah. To me, I think it’s a completely fair way. You two are looking at it at least for now and I assume you reserve the right to revise that opinion down the line.

Nick Hubert:

I think acquiring for size and scale is as often the headline is, yeah, we’re not into that at this point because I think… And yet, hey, if the right acquisition with the right people came along in that, we’d be extremely excited and would move very quickly to execute on that. So it’s a little bit of a both hand.

Taylor Gentry:

Yeah. Jason, I think it goes without saying, but my background on having done a bunch of transactions of businesses like this, it’s a natural fit for us to have this as a lever. And so we are looking at deals. We just haven’t prioritized it as the top priority.

Jason Diamond:

I think also where you are, 2024 was the launch of the business. It’s pretty common to see, all right, let’s nail this, let’s get our feet under us, client service model and then we’ll start to think about that down the line.

A couple other things I want to ask you about running an independent firm. This is a pretty glowingly positive review, I think, of your ability to service clients, your ability to grow and to build and run the business that you want. Has there been anything negative that you haven’t enjoyed about running and operating this business, other than working with each other, of course?

Nick Hubert:

No, I was going to say, I’m like, can we get Taylor off the call again?

Taylor Gentry:

Jason, maybe I’ll take a first cut at it. I think for both Nick and I, it’s just the administrative components of running an independent business that we don’t enjoy candidly. I don’t think many people would. That said, you come full circle and it is a pretty glowingly positive review of running an independent business because we get to run it in the way that we see fit. And oh, by the way, we use the same things that we use with our clients. So the value drivers we’ve talked about, we have a value drivers worksheet. We refresh it every six months. Nick, Andrew, and I get together every six months and we’re 18 months into this thing and we’ve already got this cadence and system to it, if you will. So I personally really enjoy the running the business piece of it from a macro perspective. Yeah, I’m responsible for running our fee billing and running the math on all that and getting that done, for example.

Jason Diamond:

I think that’s actually a very thoughtful answer. And I appreciate you saying I enjoy running… I feel the same way, by the way. There’s some elements of running a business that I think are immensely fun. I think it gets painted with this brush of, “Ugh, running the business is the hassle and I want to work in the business.” Agreed, nobody likes invoicing and accounts receivable for the most part, but Nick, what are your thoughts on this?

Nick Hubert:

Yeah, I think mine is different a little bit coming from a different background where it’s easier for me to sit with the rose-colored glasses of the joy of the freedom that we have in this model. At the same time, when I’m counseling folks who are talking with folks or mentoring folks, younger people who are thinking about, “Okay, I want to go start my own thing,” I’m like, “Hey, it’s like I’m the same way. I want to look in the mirror and think I’m the boss or I’m one of the bosses and we get to go build this.”

Then the reality is, at the end of the day, if there was something that you didn’t want to do that had to get done and you didn’t do it, you got to look in the mirror and be like, “Well, you’re the boss, you didn’t do it.” It’s the both sides of the coin that I think a positive, negative cut is one way to look at that because it can feel that way sometimes. And the reality is every job has 20 to 30% of it that you just don’t enjoy doing, and that’s totally true.

Jason Diamond:

It’s why they call it work. That’s why they pay you.

Nick Hubert:

They’d be pretty quick to point out that I’m the one of the partnership group that they’re going to have to chase for a smaller administrative item because, yeah, I honestly, just similarly speaking, don’t enjoy that. I want to go talk to clients. I want to go focus on building what we’re building. In finance speaks, it is a higher beta to just the all encompassing realities of running a business that is really hard to underscore without being in the seat. And yeah, there’s definitely 20 to 30% of that I would love to wave a magic wand and say, I don’t have to do anymore.

Jason Diamond:

Yeah, I appreciate that.

Nick Hubert:

You can’t have one without the other. It’s both sides.

Jason Diamond:

I think it’s getting easier and I think it’s getting more offloadable and some of it probably gets more… In some ways, more offloadable as you scale, but then you get a new set of problems, probably two, because you’re dealing with bigger… It’s a never ending. I think most business owners would agree with that. And you said it well, you take the good with the bad and overwhelmingly, most people we speak with in the independent space feel as you do, which is, are there things I would prefer to offload or that I would prefer not to do? Of course, but that’s almost just the price you pay for the freedom and for doing all the things you want to do.

Two more questions that I want to be sure to ask about where this has been a great episode. One is AI. Need to know your thoughts. Is this coming for our jobs? Do you think your firm is positioned to capture either asset flows or also just to leverage this technology and use it to serve clients better? Just give me your thoughts.

Nick Hubert:

I think, in some sense, it would be irresponsible as people this early in our entrepreneurial journey and thinking about how do we optimize what we do for clients to not be engaging with AI in some way, shape or form, at least in an evaluative posture. So we are actively, in a bunch of different ways, whether it’s buy it off the shelf or build it, continuing to find ways to think about, not only how do we drive efficiency, because there’s an obvious surface level dynamic of if I can save time and spend more time with clients, that is a go to thing objectively. And there’s this deeper dynamic of if it can amplify what…

Actually, back to your prior question, if it can amplify what I’m best at and enjoy and reduce what I don’t enjoy, that’s a massive win. And I think we’re on the surface of seeing that. That’s the opportunity we are motivated by that and pursuing that. And at the same time, I would say an operational principle that really is important to us, and you can almost call it a north star within the business is client security can never be put at risk for the sake of our own growth, our own efficiency, or anything else. There’s, I think, still a question mark as to how we think about trusting this. And so we are very cautious as we think about we will never try to move so quickly on any technology, whether it’s AI or otherwise that we risk our clients in some way, shape or form, because the reality is we are also in a context where AI is, when pulled, one of the least popular things happening in the world today for the average American. And so there’s no kudos here for being a leader.

Jason Diamond:

I totally agree. The first mover advantage here is slim to none.

Nick Hubert:

Yeah, you don’t want to be the one sticking your neck out on this in our industry. And yet there still objectively has a potential to be better for the clients. Navigating that I think is messy.

Taylor Gentry:

I think the only thing I’d add, which is pretty short, is the use of these tools has the ability to create a better deliverable for clients on a more consistent basis. And marrying that with exactly what Nick just outlined around the risk is really the magic piece here. And so I think, to the extent we can get it implemented effectively with the security, but also with, this is going to result in a lot better outcome for clients across the board, that’s a pretty attractive objective to go after and it’s pretty exciting to be in the industry with that now on the forefront in terms of ability to improve that experience over time.

Jason Diamond:

Yeah. No, that’s a good color to add. I want to end here with a potential HR violation, but you’ll forgive me. I’m not going to ask about age, but you are clearly both relatively young advisors. And this is a hot button issue in our industry, the idea that there are not a lot of talented, young next gen advisors at a time when a lot of gen one or older advisors are retiring out of the business. So what would you say… I think one of you made the comment earlier, it’s not necessarily the coolest industry to go into at 23 years old right out of school. I think more commonly people go into sales and trading, investment banking or some of the other finance verticals. What would you say to younger folks interested in wealth? And maybe I’d ask also, do you have any thoughts on how we solve this next gen talent crisis? And if you’re both secretly 90 years old, you can just do it.

Taylor Gentry:

You talking my internal age or my actual age?

Jason Diamond:

Why don’t you go first?

Nick Hubert:

Yeah, go ahead, Taylor.

Taylor Gentry:

I think there’s two threads here. The first is it’s not a sexy industry to go into and not as sexy as an investment banking, private equity shtick, if you will. I think from my perspective, it’s really important what you’re working on. The ability to be in a firm like what we are building with the diversity of work that is available is a little bit like the world’s your oyster and we’re designing it with that in mind. For Nick and I, the ability to work on many different situations throughout the day and throughout the week is actually why this business is so attractive and interesting and why we want to do it for 30 years. And so we’re building with that context. And so, in some ways, it’s almost like a plug for younger advisors, the ability to work in a firm like what we’re building where you’ve got this diversity of work that is not just trading stocks and bonds or just spreadsheeting or just financial planning. This is a much broader expression and experience than what I would call “traditional” wealth management. So I think that’s the key on that front.

Then, on the talent development side of the equation, if you will, this AI thing is going to be a big question mark. And what I mean by that is there is significant training that will be required in, call it traditional wealth management or the firm we’re building with regard to folks’ ability to actually learn when you can plug it into AI and get an answer that you don’t have to critically question or think through. And so there’s going to be a significant learning curve for folks that we’re going to have to continue to train and educate on in order to produce talent that can be long-term sustainable and beneficial for clients more writ large.

Jason Diamond:

Nick.

Nick Hubert:

Well, first and foremost, we haven’t given our third partner enough here of time. I think we have a tremendous benefit of having a multi-generational team at the partnership level where he’s in his mid to late 50s and can bring that additional experience to bear and as is necessary, and as is important because investing is an experienced business and a lot of clients want that. And so the power of that matters. I think that actually speaks to firms being willing to think of partnership at that level that partnership is not reserved for just once you’ve been there for a long time. So I think it’s getting at like, how do you share ownership earlier, do it in a way that is actually giving people a stake in the outcome and allowing that elevation to happen. I think that’s number one.

Number two, honestly, the existence of people like you and your team and that your family has built over the years, Jason, is awesome. And because of the ability for you to help people navigate and see how easy it is to actually run this business and build this business in some sense… And that’s in the broader spectrum of having seen. We work with so many different types of companies. We sometimes say our business is so much easier to run and it has come so far with technology and with people like you who are providers to us to allow it to be easier for us so to speak. That’s a big deal. I think that should be talked about more that there is a massive… What that allows is more time to, as Taylor mentioned, build what you actually want because you can outsource the compliance piece in a major way that allows you to not spend as much time on that as you used to.

So I don’t think that gets talked about enough. And I think if you just zoom out and view this in the perspective of post-2020, there was this massive movement of entrepreneurship through acquisitions and people looking at this idea of how do I get the life I want by way of not having to be on a two-year clock to go to the next job to the next job. Have something that I can have a long-term impact on where I get to build something and have employees. This is the perfect space for that because it’s such an awesome business where you get to work so intimately with people and clients and their life outcomes. They’re, again, relatively speaking, easier businesses to run relative to what’s out there. I’m just baffled by the fact that it is not seen a larger wave of younger people coming out of these more “traditional” paths and seeing this as an awesome place when they’re willing to go buy an HVAC company.

This is so much easier than that. So honestly, I think part of it’s just we all live coming from being in this space longer, we get stuck in our wealth management lane and I think it’s easy to then nitpick and get stuck in there. But when we take a more global perspective, it’s a massive opportunity that I hope more people take advantage of.

Jason Diamond:

Thank you for highlighting that. We call it the ecosystem of support for financial advisors, and it’s gotten so much more robust through the years. And a lot of times, people focus on the negatives of compliance burdens have gotten heavier and competition has gotten fiercer. And yes, that’s all true, but the flip side is the point you just made, Nick. So I appreciate you bringing that up.

Any last words of wisdom you’d want to share with our audience? This has been a fantastic episode and I can’t wait to have you back on to revisit the growth trajectory.

Nick Hubert:

Yeah, I’d say just thank you for the time. We’ll plug the podcast. We’ve enjoyed you guys for a really long time and being able to have the resource of what you guys have built is actually… In our partnership meetings, we’re bringing you guys up with some consistency. So thank you for the gift that you are to the industry and continuing to create opportunity for folks like us to come on here.

Jason Diamond:

Thank you so much.

Mindy Diamond:

As a financial advisor, you hold yourself to the highest standards of integrity, honesty, and credibility. You are successful because you take your professional responsibility seriously and are dedicated to your clients, but are you living your best business life? Are your goals aligned with your firms or could a better option exist? Should I Stay or Should I Go? is a book written with you in mind. It’s a self-guided journey that walks you through the key steps that we take with our advisor clients. This strategic thought process and roadmap to professional self-discovery, is designed to help you ask the right questions and think critically and objectively, whether you’re considering change or not. Learn how to get your copy at diamond-consultants.com/thebook.

True Alignment: Advising Business Owners on Wealth, Significance, and Value

A conversation with Jason Diamond, Nick Hubert and Taylor Gentry – Founding Partners at Panoramic Capital Partners.

Jason Diamond:

Welcome to the latest episode of our podcast series for financial advisors. Today’s episode is True Alignment: Advising Business Owners on Wealth, Significance, and Value. It’s a conversation with Nick Hubert and Taylor Gentry, Founding Partners, Panoramic Capital Partners. I’m Jason Diamond and this is the Diamond Podcast for Financial Advisors.

Mindy Diamond:

At Diamond Consultants, we help elite advisors identify the right environment for their businesses to thrive, whether that’s at a wirehouse, boutique, or independent firm. With nearly three decades of experience, we’ve guided thousands of advisors and represented more than a quarter of a trillion dollars in assets transitioned. And each year, one in four advisors managing a billion dollars or more who change firms are our clients. Our process is education-driven and based on building relationships, starting as your strategic partner well before you’re even thinking of a move. To schedule a confidential conversation, call us at 908-879-1002.

Wondering why advisors change firms and where they’re headed? Are transition deals going up or down? Those very questions and more inspired us to create our annual advisor transition report. It’s the award-winning, data-driven resource designed for advisors that connects the dots between the motivations around movement and the firm’s appetite for top talent.

Arm yourself with the knowledge you need to make smart decisions. Download your copy at diamond-consultants.com/transitionreport.

Jason Diamond:

Advisory firms that work with business owner clients typically operate through a fairly traditional wealth management lens. The business may be the source of the wealth, but the advice itself often centers around investments, planning, and asset allocation, yet Panoramic Capital Partners approaches that equation differently.

Nick Hubert and Taylor Gentry are the founding partners of the roughly $450 million RIA, serving about 150 families with a seven-person team. And while they come from very different professional backgrounds, Nick with more of a relationship and storytelling orientation, Taylor from the analytical and private equity side, they’ve built the firm around a shared philosophy tied to what they call personal significance, personal wealth, and personal value. A big part of that philosophy, or the north star as they put it, is applying some of the same accountability and long-term thinking frameworks commonly seen in private equity to the advisory relationship itself, not in a transactional sense, but in helping clients think more intentionally about decision-making, alignment, and outcomes over long periods of time.

As a result, our conversation delves deeply into the private equity world, reframing how clients and advisors should consider this important tool as both a growth mechanism and a strategic part of their client’s plans. We talk about how that perspective also shapes not only how they think about serving business owners specifically, but also the role private equity should play in wealth management. Then we take a view of their long runway and how they and other younger advisors might see things differently about building firms today and why clarity of vision may matter more than sheer scale in the years ahead, and much, much more. It’s a narrative that is refreshing and informative, so let’s get to it.

Taylor, Nick, thank you so much for joining. Walk us through your background. What brought you to the world of wealth management? Nick, let’s start with you.

Nick Hubert:

Sure. I think I got my first taste of the industry actually in a sophomore year of college internship, or I interned at Morgan Stanley here in Oregon. I studied finance and accounting at University of Oregon, and so I had this affinity for finance and markets and had that privilege of having that internship. So I had it early on in my career. Ultimately ended up setting my sights on doing investment banking and going that route and did that for a short period of time. Ended up not going very long due to a medical reason, so you don’t have to be that sorry for me. And ultimately started my career in business consulting before pretty quickly realizing that I want to get back to finance, back to investing these things that just felt like core competencies and that thing that you keep coming back to when you’re alone in the middle of the night thinking about stuff, it was always that. Just had this desire to work with smaller units than large corporations, which is great for wealth where you get to work with families and small businesses. And so it was just a natural alignment that took me back full-time to the space in 2016.

Jason Diamond:

I like the framing it through the size of the unit you’re working with and having more of an impact on the family.

Taylor, what about you?

Taylor Gentry:

I’m a little more circuitous, if you will. Spent a couple of years in investment banking, so you can be sorry for me. Nick and I met in undergrad at the University of Oregon, had the opportunity to work in this investment group together where we were investing a portion of the university’s endowment. And like Nick, interned in wealth management and kind of walked away from it going, “Boy, that’s boring. I don’t really like that.” And so moved to New York, cut my teeth in banking for a couple years and we were working… So an investment bank for context, helping companies raise debt, raise equity, and with mergers and acquisitions, we’re working with huge companies. So the Mattels of the world, the largest toy company in the world.

Like Nick, realized, “Hey, I’m going to work with smaller companies that we can get our arms around a little bit better and be more helpful with and have a bigger impact on.” So spent about 10 years with a private equity firm in the western half of the US and we invested in companies in what’s referred to as the lower middle market. So companies doing 50 to 300 million of revenue. And we would invest in those companies, grow those businesses and then look to sell them. Awesome experience, learned a ton, got a bunch of experience around how to invest in companies, how to grow businesses.

Then had the opportunity to step into the CFO seat of a couple of different operating companies during that time. It was just a great learning ground, but also to see a whole bunch of different situations. Nick and I have always invested in things together. We’ve worked on things together and we’ve always wanted to work together full time. And a few years ago, the stars really just aligned to say, “Hey, what would it look like to create a differentiated offering in the wealth space where we can blend my background on companies, transactions, how to draw on scale and all those pieces and really marry that with the wealth management piece?” And Nick will get into that further, but it’s just a really unique way to partner with families and companies that are smaller which can have a really high impact experience with those families and really move them through their life journey, if you will.

Jason Diamond:

Yeah, there’s a lot to unpack there and we’ll get to some of the elements of how you run the business today. First of all, you can’t fool me by using a toy company as your example to make investment banking more interesting. I’m just kidding. Actually, my real takeaway there is you have a skillset that is incredibly relevant in the current wealth management ecosystem, especially in the model you’re currently in. So let’s talk about that a little. Tell us about your current chapter, which is Panoramic Capital Partners. Who do you serve? What types of clients? Give me some perspective on size as well.

Nick Hubert:

I’m going to take this first. Taylor can do the PE background side and give you a bunch of numbers. I’ll give you the story and see if we can piece it together that way.

Jason Diamond:

I get the impression you guys use that line a lot.

Nick Hubert:

Oh, no, that’s the first time. How’d it land? Jason, I spent eight years at our prior firm with our third founding partner, Andrew, and he was at that firm for 30 years. And so we’ve got this core DNA that we’ve always carried of serving high net worth families in a very holistic and deep planning-based capacity, which I think a lot of modern firms say that. And so that’s not necessarily that different, but it is a DNA that carries through.

When we got struck with this vision of launching Panoramic and what inspired us to build the firm, it was as, Taylor outlined, around this idea of how do we partner with entrepreneurs and business owners more holistically across their entire entrepreneurial journey, not just around the exit as is so often where the gravity of the conversation sits. And so our firm vision and inspiration was all around that. And since launching in May of 2024, it has been about how do we bring that vision to life with a different business model. And to your point, there’s a bunch to unpack there, but that is ultimately the founding vision of what we are trying to build here overall and what inspires us every day to say, how do we, as Taylor mentioned, bring the combination of skillsets to bear in a way that allows us to be a better partner along the entirety of the journey as opposed to just towards the end when assets traditionally show up, so to speak?

So that’s a story from a vision perspective. Taylor, I don’t know what you want to add to that.

Taylor Gentry:

As Nick outlined, it’s the ability to work with folks throughout the lifecycle. So in private equity, you invest in a company, you work with that management team for three to seven years and then you sell the business and move on to the next project or deal. And really, it’s the deal mechanic that is the value creation. Whereas, with what we are building here, we have the opportunity to really step along the journey with folks when they are in the early phases building what we talk about as the middle phase of allocating, and we’ll talk about this further, and then really the third phase of stewarding capital along the way. And it’s a life cycle or entrepreneurial journey that we’re able to be hand in hand with folks over decades opposed to measured in three to five year spans.

Jason Diamond:

So it sounds, and you’ve both kind of touched on this now, your different backgrounds, you view as very much a positive because it gives you, Taylor, the more in the weeds analytical perspective. Nick, you’re probably more the storyteller. Do you find that to be a benefit when you’re running your firm every day? And are there instances when it’s a negative? Is there ever a time when you say, Taylor, just maybe more for you, not coming from this world, you don’t speak the same language?

Nick Hubert:

Do you want me to drop off the call so Taylor can be honest and he can give you the scoop and then he can jump off and I’ll give you the scoop?

Taylor Gentry:

Jason, we talk about that a lot, honestly. I think it is atypical for someone with my background to step into the wealth space maybe more so. And we leverage that because we have the ability to work with folks on how do you drive value in the company, how do you set the business up for a potential sale exit or transition internally? But this business, historically, we’ve talked about it as almost like two tracks. You have Taylor on the quote unquote business consulting or the business work track and you have Nick on a wealth management track. It’s really not the case. And really, the power is the ability for these two pieces to come together and there isn’t a conversation we have with clients where those two perspectives and backgrounds or contexts aren’t married into one to create really truly holistic advice.

And so Nick will probably tell you otherwise, but I haven’t seen an area yet where our two backgrounds has been a negative. It’s actually been immensely positive. And then on top of it, in terms of kind of building out the firm, Nick is more of a traction visionary and I’m more of the traction implementer. What’s amazing about it from our perspective is the partnership we have allows us to, A, recognize that, B, name it, and then C, leverage it in terms of being able to dole out duties and maximize our success together.

Jason Diamond:

Nick, anything you’d add?

Nick Hubert:

I think that’s all right. I mean, Jason, your question was from an operational perspective. I think a lot of Taylor’s view is from a client perspective, which is spot on that the overlap of that is really helpful for clients and I think what allows it to be a different experience for them. Internally, operationally, I think that where you could see friction there amongst partners with differences, and I think you do see that, and at the same time, Google was the one who did team research 15 years ago where they put out what you really want, is similarity and vision and differences in skillset when building a team. And so I think we’ve been intentional about that and it’s been really helpful for… Taylor and I functionally met in a quasi-professional setting back in 2011 and developed a friendship quickly, so we’ve got that deep level of friendship that underpins all of it. And same with Andrew and our time working together.

So part of it is there’s just such a strength of relationship amongst us that we give space for each other’s differences and look for those as assets as opposed to negatives, but in some sense, beauty in the eye of the beholder as is the case with anything.

Jason Diamond:

Yep. I appreciate you adding that context. I’ll be honest that when I first encountered your firm, my reaction was your core value prop of serving business owners is not all that differentiated. And then I learned more about the way in which you serve business owners. Can you talk about that? Because a lot of advisors in general, but then I think more specifically, a lot of RIAs would say, “We service primarily business owners.” Tell me how do you do it in a way that’s different and meaningful?

Nick Hubert:

I’ll take a first stab at that and then Taylor can maybe add on with specific stories. The wealth space is an awesome business and it’s a place where it’s very difficult to differentiate. And so we think a lot about that through the lens of how do we grow this business well for the long period of time to create opportunities for clients and employees. And so we spent a lot of time thinking about that, not only for the sake of differentiation, but also how do we actually just continue to add value to clients? Because if we add value in a different way, growth will take care of itself.

I’d say one way of cutting that is we revisit the mission is through this idea of, okay, if I want to be a partner along the journey, it’s about more than a single transaction, more than a single exit, whatever that might be, or a series of transactions as wealth is often created over a series of transactions. It’s this idea of how do we focus on wealth creation and driving business value as the engine of wealth creation for entrepreneurs and what we call personal significance, which is the life of the entrepreneur. And so there’s a next click down framing of our framework that we work through that lens.

I think the most important piece for us has been how do we build a business model that actually brings that to life and that’s the trick because we can say that, and if we basically still just operate out of an AUM-based or an asset advisory fee-based business, the reality is my incentive is still towards getting assets out of the entrepreneurial environment, so to speak, into a place that I can manage them, which may or may not be the best thing for the entrepreneur based on where they are at. And so our current work continues to be around how do we build that business model. So layering in different ways of engaging, whether it’s a retainer fee or some other way of engaging so we can start earlier when assets aren’t there and actually encourage the entrepreneur, “No, keep reinvesting in your business. It’s your highest rate of return right now and it’s where the investment needs to go.” I don’t want to have a conflict in giving that advice.

And so I think step two here has been building that business model from an actual engagement perspective to enable us to enact the vision. And then I think the third piece is how do we then build tools that are different than just evaluating pre-exit planning, and as is so often, the toolkit, but actually saying, okay, what are the value drivers of a business? And this is probably where Taylor has a lot more to add because it’s 101 of the PE model, but how do we take the mission and vision of an entrepreneur, what we call north stars, translate those into value drivers, ensure those tie to strategic initiatives in the business, ensure it ties to reporting, and ultimately, how capital is allocated between the business and other investments?

So then that’s our toolkit that we continue to build out to deploy the mission through our business model with tools that back it up. So that’s how we frame it right now. Taylor, we can share stories about how that’s come to fruition to create different outcomes.

Jason Diamond:

Taylor, I’d love to hear that. Let me just add maybe my understanding, because this is what helped me, I think, to really understand how you defer, and Nick and Taylor, correct me if I’m wrong, it sounds like the typical advisor thinks about an entrepreneur, a business owner relationship as the next liquidity event in most cases. And you take the viewpoint that it’s a journey, in some instances, 30 years in the making. It’s not even about liquidity event might come that’s beside the point. Is that a fair summary?

Taylor Gentry:

Yeah. We talk about it as a growing business is a healthy business, a business that is creating incremental value and adding to the multiple in terms of how the business is valued in the marketplace is a healthy business. And so whether you are going to sell that business or retain that business into perpetuity, let’s make a really valuable business and grow a very healthy business. And that’s what we do with clients.

Nick laid out the north star framework. And so how do we actually go about engaging with folks on a practical level? It does start with the north star framework. It’s got five steps to it as Nick outlined in terms of defining the north star, where we’re going, what we’re trying to do and that’s across those three pillars, personal significance, personal wealth and business value. And that personal significance has to be held at that same level. Otherwise, we find folks that are mid 50s, their business is crazy valuable, they’ve got a lot of dollars, but their family life isn’t where they want it to be because they didn’t take care of that along the way.

So we lay out a place map that says, “Hey, these are the north stars that we are aligning on and coming back to every month when we work with these owners.” We then push that into, okay, what are we trying to do on the business side of the equation? Let’s lay out what is going to drive the value of the business from a multiple and enterprise value perspective. We push that into a set of strategic initiatives that is tactical, who owns what, when’s it getting done, and are we red, yellow or green on it? We then build out the performance reporting package with folks. And so that is a monthly reporting package that says what happened last month and what operational data are we looking at to be able to improve the business month over month and get a good feedback loop going into the company. And then the last piece is around capital allocation that Nick mentioned where if the business generates a million dollars, where’s that capital going?

I think there’s a lot in there and it’s really deep, but if you zoom all the way back out, it’s take a private equity style playbook where private equity firms come and invest in a company. And what do they do after close? They put in place good financial reporting, good operational reporting, and then hold the team accountable to that reporting and those results on a monthly, quarterly, and annual basis. And so this is not rocket science or something that’s never been seen before. It’s just most business owners that have never experienced this private equity world don’t have access to it and don’t know how to go about doing it. It’s a relatively long process to get that installed with companies and with teams to really dig in and understand it, but it’s building out those packages to be able to say, “Okay, what happened last month? What changes do we need to make and what are we doing from a initiative perspective to drive the business forward?”

So to Nick’s point, it was previously, this was all about liquidity planning or from a wealth management perspective, it’s about the exit. This is about how do we make a more valuable business along the way, and that’s going to be good for the entrepreneur as they move through the journey.

Nick Hubert:

When we were around the dinner table, the proverbial dinner table creating the vision of this firm, it was around this idea of the silver tsunami and everything that everybody reads in the headlines of this massive wave of transition, this generational transition of business ownership that we could help facilitate. So we launched with that thesis in some sense.

In addition to this broader journey perspective, we have gotten to this place by following the market and listening to what entrepreneurs actually want through the big unlock was honestly in a deal process with one of our clients where we realized, “This is a great deal. This person’s going to put a ton of money in their pockets, secure their future,” and it’s completely the wrong outcome for the entrepreneur because it’s thinking all about the deal, not thinking about what this person didn’t want was an exit. They wanted a different relationship with their business, and that required, what do you actually want out of life, that personal significance piece? And it required, “Hey, if we can actually create a layer of team members and reporting that allows you to manage this like a board chair would do as opposed to a highly engaged CEO. That’s actually what you want. You don’t want out of this business. You want to still have this be a huge rock in your life.”

And so we’ve ran through that door, said no to the deal with them and have been building the infrastructure around this, and that was the unlock and aha moment for us. There’s something bigger here and that’s what then inspired, in some sense, the broader build out of the toolkit, but I think puts more meat on the bone of actually saying no to a deal, which is not the classic wealth manager outcome to get to a way better outcome for the client and is ultimately still an awesome client for us as a firm and somebody that we can go build with for the next 20 years.

I think just telling it through the lens of a story that’s different than what’s normal, so to speak, is a way to frame that up.

Jason Diamond:

It’s such a hyper focus on a fairly long-term and honestly nebulous potential outcome. You don’t have certainty. That, I think, is why most advisors would prefer the near-term liquidity. I mean, it’s not a secret, right? You can bill on assets, firms are incentivizing it and it’s a pretty direct recipe to net new asset growth, but it’s certainly a refreshing point of view. It resonates with me. I’m wondering if it’s resonated with clients and prospects. I guess what I’m asking is, do they feel that this is something different than the typical wealth management experience for this type of client?

Nick Hubert:

Yeah, Taylor, tell that story of the guy who said, “I’ve had this, but I felt alone.” I think that story of partnership, you tell pretty well.

Taylor Gentry:

Yeah. Jason, it was actually that same client, he had a investment banker, a wealth manager, attorney, and a CPA. CPA said, “The deal’s terrible, you shouldn’t do the deal.” Investment bankers obviously incentivized to do the deal. And so he’s saying, “You should do the deal.” That’s how he gets paid. He had a wealth manager who was silent and he had an attorney who just pushing paperwork.

Jason Diamond:

It’s like the start of a bad joke.

Taylor Gentry:

Yeah. No, seriously, it’s pretty remarkable. It’s like this guy did what he was supposed to do. He put the team of resources around himself. He got professionals in the seat. It’s that no one could connect the dots of all four of those people because they have the seat of those four people.

And so it’s really resonated because there’s an ability to see a bigger picture and connect these dots and say, “Okay, this investment banker is saying X because of A, B and C.” And the CPA is saying it’s a bad deal and that it’s not a market deal. It’s 100% a market deal. This deal is right down the fairway in terms of what the market should value your company at and they just don’t understand how the transaction mechanics should work. And so it’s worked really well from that perspective of being able to be the quarterback or centralized point or personal CFO for folks in understanding where interests lie and also being able to think about what they are pursuing in a bit of a different lens.

I think the second piece on that is where does it resonate for folks? I think that there is a gap in the marketplace that we are still working to close, and that gap is that business owners do not know what this monthly reporting package looks like. They do not know what really good reporting on their business looks like in terms of they have always run their… You’ve got a business owner. They’ve run their business for 10 or 20 years. They have a pulse on the business from their gut feel. That does not mean that the business has been optimized, is ready to go to the next level or is ready for a transaction and go through a transaction because they have not done the work on the backend to understand the moving pieces of the business at a granular level.

This recording package, we oftentimes get this confusion around, well, I’ve got a temporary CFO or a controller or X, Y, Z. That is very different than what we’re talking about. Well, that is all accounting, close the books, have clean numbers. What we’re talking about is how do I marry operational data in the business, number of units ships, number of jobs completed, time on job, operational data to the financials in the business so I can then go make adjustments operationally on how to improve the business and continue taking steps forward.

Jason Diamond:

It’s very clear. Nick, anything you’d want to add to that?

Nick Hubert:

I’d say it’s easy to still cut that from a deal lens and say, look, when an investment partner comes to evaluate a business to sit in their seat for a moment, they’re going to look at the replicability of what that leader has done without that leader still in the seat. And if so many businesses are still reliant on that person and this gets talked about as processes, reporting systems, that ultimately results in a discount to the value of the business because although it can be viewed… For the leader, it’s like, it’s that control thing that entrepreneurs deal with. It’s what made them good. It’s what got you there. And so that transition is really hard. And that’s important from a deal lens because that does a direct impact to value.

And to widen out the scope beyond the deal and to think about the entrepreneur’s life, this goes back to the dynamic that a lot of times entrepreneurs look for the exits because they’ve built something that it’s now owning them and what they’ve built is not resulting in the life that they want. And so how can we use this system to actually change that relationship, as I mentioned earlier, with the business so that they can run it more like an executive might and get out of the knife fight, so to speak, that often is how this can feel for a lot of folks, even for pretty large businesses. It can just feel like you’re a firefighter, you’re in a knife fight, whatever you want to use for that terminology. I think it’s as much about creating a different life outcome and different relationship and owning and leading a business as it is in driving deal value.

Jason Diamond:

Taylor, maybe I’ll ask this of you. Forgive the question, but private equity, I think in our space, has a little bit of a negative stigma at the moment. I don’t think that’s true across the board. I think people appreciate generally the need for capital and there are certainly benefits of private equity. But I’ll say as a whole, advisors are, let’s say, suspicious of private equity. You ever get that pushback? Does anybody ever view your experience or the way you position the story as a negative?

Taylor Gentry:

I think most people that we talk to don’t know what private equity is. They may have seen it in the headlines. They may have some sort of connotation around it. They won’t come out and say that they don’t like it. They don’t know why they don’t like it. The average American business owner, they don’t know what it is or what it means. So yes, you do have to fight that because of the headline piece around private equity, bad actor ABC, and that’s what gets the headlines.

I think what private equity is really good at is taking a business that is not optimized or not running on systems and processes that it can run on. Again, it’s not rocket science is not crazy hard. It’s just the private equity world has created ways to install systems and process that improve the value of the business by way of providing visibility to financials and operations in a way that the owner previously didn’t have.

And so for us, we view it not by any means as the end all be all or the answer. There are clients we’ve worked with that have taken private equity capital and grown successfully, executed on some acquisitions and then exited again. There are clients that have evaluated those transactions and said, “Hey, not for me.” We are actually fairly agnostic to it. What we really spend a lot of our time on is what are we solving for? What’s the end game? How do we use this private equity transaction to get to where we’re trying to go and is it what we want at the end of the day? Because the reality is, if you’re going to stay on and run that business with private equity investment in, there’s a higher expectation on what you need to do Monday morning than when you owned it yourself and it was a little bit of your personal piggy bank too.

Jason Diamond:

I love it because you bring it back to the north star concept.

Taylor Gentry:

Yes, that’s exactly right. It’s what are we solving for and what game are we playing to be able to get to where we ultimately want to go? And for, as Nick mentioned that client that turned down the deal, it was a private equity investment. We got very clear with that, “Hey, here are going to be the expectations. You will have a monthly financial reporting call. You’re going to have quarterly board meetings.” These are things that need to happen in this business to be able to upgrade the management and cadence in this company. You don’t have to do it all tomorrow, but that is how you make a more valuable company, is installing some of these systems, process and cadence. And so we’re working with him now on doing that, just in a private context instead of in the private equity backed environment.

Nick Hubert:

I think there are three things embedded in this. I’d say number one, to Taylor’s point, this is a massive black box, in some ways by design. Wall Street’s had not a great reputation for a very long time of putting things behind the paywall, so to speak. And so we think a lot about our job as empowerment and education.

Jason Diamond:

Education, yep.

Nick Hubert:

Yeah. And so part of it is just, number one, how do we just demystify this thing and name things and take away the go to or bad? Because it can be that, but it should not be that from a core basis. That’s number one.

Number two, a lot of entrepreneurs feel like they cannot get access to this ability to professionalize or level up or whatever these things are without bringing on that investment partner. And so part of our motivation is how do we actually bring this skillset in without needing to bring on an investment partner because oftentimes, that investment partner comes when you’re done, and so you don’t actually get to experience it. That’s number two.

Number three is, Jason, part of your point earlier was like there’s still a trap here of potentially being able to get motivated primarily by the exit. And so again, that gets back to our business model, making sure our price Racing is right, all that good stuff. And it’s also the reality that a lot of businesses, if you just look at a very broad scope of American businesses, a lot of them don’t have value in the marketplace in a massively material way and/or won’t exit in a traditional way. And so the wealth creation journey then becomes much more of a conversation of, how do we manage the balance between investing in the company and distributing out of the company to invest elsewhere because we should actually be creating investment assets along the way because when you get to the exit, there’s no better power position at the moment of exit than already having financial security to some degree and giving you choice in the right deal, not the highest and best deal because you need to fill the piggy bank for retirement.

Jason Diamond:

I just want to be sure to ask because you did mention a couple times your pricing structure. How have you set it up so that you can be more agnostic about this as opposed to the typical… You want to talk about it for a minute?

Nick Hubert:

As it’s structured now, it starts with a retainer earlier on where we are working… As Taylor mentioned, we are going deep in the operational build of the business. We will do that on a monthly retainer. We’re engaging consistently. As assets get built up and if assets get built up, we start to chew that retainer down as assets go up. I think what we are ideally trying to figure out, and still honestly have not figured out yet, is how do we get to parity so that we don’t create an… I want to be able to work agnostically with a client to say-

Jason Diamond:

Yeah, I love it.

Nick Hubert:

… regardless of how I’m engaging with you, that’s the goal. So I’d say we haven’t cracked the code on exactly what that is yet, but mechanically, we’ve got the levers to pull to say how we price and move that retainer down is basically allowing to keep it at par, so to speak, for the client and allowing us to say, “I’m here to engage in making the best wealth creation outcome for you along the way, whether that’s investing in the business or investing outside the business.”

Jason Diamond:

I think that’s the right recipe. I agree. The levers can be fine-tuned, but to me, that’s the model you want to create where you can credibly look your prospects and clients in the eyes and tell them, “Our job is to serve you in the best way… We’re sitting on the same side of the table as you.”

I want to turn this inward for a second. The home cooking concept. M&A, within the RIA independent space, is obviously a hot topic. Have you thought about it? Do you think it’s a critical part of a potential growth trajectory of a healthy, independent firm? I’m curious your perspective. I feel you, Taylor in particular, probably have a unique lens on this coming from the world you came from.

Taylor Gentry:

Yeah, Jason, I think if Nick and I wanted to put as much money as we possibly could in our pockets as fast as humanly possible. It’s a pretty easy recipe. It’s go get some private equity capital backer, roll up a few RIAs, get to a few billion of AUM and then sell it to the next private equity firm or roll it to the next private equity firm, do that a few times. We’d all make plenty of money and go on our way.

We’ve been really intentional on this front, and again, I talk about this is what we want to do for the next 30 plus years. And really being intentional around building a business that has that enduring nature to it, decided to take private equity capital on, you are on a shot clock to some degree. Yes, you’re trying to build a best business, all of those pieces. You get cadence. You get capital. There’s a ton of value there, but you are on a shot clock that is not a shot clock we’re trying to get on at this stage.

I’d say we opportunistically are looking at acquisitions. So we think about it, and Nick and I talk about it all the time, how much of our time should we be spending on acquisitions? And we think of it as 80/20 or even 90/10, 80% or 90% organic growth-focused, 10 to 20% acquisitions-focused. And so we’re actively evaluating those consistently and see deals on a monthly basis that we look at and evaluate, but it’s less of the focus today than it could be down the road.

Jason Diamond:

And Nick, do you think of that when you guys talk? Do you guys call that your true north? Do you think the same way you coach your clients and prospects to say, “For right now, it wouldn’t be the right move for us to take private equity capital and to do this acquisition rollup strategy because A, B and C are more important for us”?

Nick Hubert:

Yes. I think if we take our life north star for Taylor. I’m speaking for Taylor, but we’re close and so we share this of… To Taylor’s point, the life outcome of scaling that quickly with that type of capital backing is likely to create a life that I don’t actually want that’s not good for me, not good for my family, and honestly, not good for our clients at this point. And so that overrides in this case, even though the wealth, north star might say, “Hey, absolutely do that.” At some point something has to win. And so that is true.

At the business side, as the north star is motivated by this mission of the entire entrepreneur journey, the worst thing I could do is shortcut my ability to be on that journey for a long period of time. One of our friends in this space says, “The best thing I can do for my clients is still be in the seat 30 years from now because I’ve lived a good life that enables that.” And I think that’s spot on for us, is everything, it’s so easy in today’s world to be consumed by short-termism and we are intentional in ensuring that we don’t succumb to that. While still recognizing to your point, I mean, you’re in this all day, Jason, right? There’s a massive opportunity in front of us to be thoughtful about how acquisitions fit into this. And I think we want to be open to that in a way that ensures we just don’t lose the core of the goodness of what we’re trying to build.

Jason Diamond:

I think that’s the right answer. The only wrong answer in my mind is we’re not open to this or we’re closed to it. To not at least be opportunistically aware of the dynamics in the market, I think is naive. But also, I’ll be honest, Nick, when I think about the concept of the north star, I have a hard time imagining, because we use a similar concept when we counsel advisors. What is your true north or your north star and your best business life, whatever you want to call it? To me, it does include absolutely the personal piece. I think it’s hard to define it only on the economic verticals because, I mean, I think about this for a transitioning advisor. Almost never is the conversation about crunch the spreadsheet and get us the biggest check possible. It’s, yeah, sure, transition capital is important, but it’s let’s also, we want a better work life and we want freedom to market and blah, blah, blah. To me, I think it’s a completely fair way. You two are looking at it at least for now and I assume you reserve the right to revise that opinion down the line.

Nick Hubert:

I think acquiring for size and scale is as often the headline is, yeah, we’re not into that at this point because I think… And yet, hey, if the right acquisition with the right people came along in that, we’d be extremely excited and would move very quickly to execute on that. So it’s a little bit of a both hand.

Taylor Gentry:

Yeah. Jason, I think it goes without saying, but my background on having done a bunch of transactions of businesses like this, it’s a natural fit for us to have this as a lever. And so we are looking at deals. We just haven’t prioritized it as the top priority.

Jason Diamond:

I think also where you are, 2024 was the launch of the business. It’s pretty common to see, all right, let’s nail this, let’s get our feet under us, client service model and then we’ll start to think about that down the line.

A couple other things I want to ask you about running an independent firm. This is a pretty glowingly positive review, I think, of your ability to service clients, your ability to grow and to build and run the business that you want. Has there been anything negative that you haven’t enjoyed about running and operating this business, other than working with each other, of course?

Nick Hubert:

No, I was going to say, I’m like, can we get Taylor off the call again?

Taylor Gentry:

Jason, maybe I’ll take a first cut at it. I think for both Nick and I, it’s just the administrative components of running an independent business that we don’t enjoy candidly. I don’t think many people would. That said, you come full circle and it is a pretty glowingly positive review of running an independent business because we get to run it in the way that we see fit. And oh, by the way, we use the same things that we use with our clients. So the value drivers we’ve talked about, we have a value drivers worksheet. We refresh it every six months. Nick, Andrew, and I get together every six months and we’re 18 months into this thing and we’ve already got this cadence and system to it, if you will. So I personally really enjoy the running the business piece of it from a macro perspective. Yeah, I’m responsible for running our fee billing and running the math on all that and getting that done, for example.

Jason Diamond:

I think that’s actually a very thoughtful answer. And I appreciate you saying I enjoy running… I feel the same way, by the way. There’s some elements of running a business that I think are immensely fun. I think it gets painted with this brush of, “Ugh, running the business is the hassle and I want to work in the business.” Agreed, nobody likes invoicing and accounts receivable for the most part, but Nick, what are your thoughts on this?

Nick Hubert:

Yeah, I think mine is different a little bit coming from a different background where it’s easier for me to sit with the rose-colored glasses of the joy of the freedom that we have in this model. At the same time, when I’m counseling folks who are talking with folks or mentoring folks, younger people who are thinking about, “Okay, I want to go start my own thing,” I’m like, “Hey, it’s like I’m the same way. I want to look in the mirror and think I’m the boss or I’m one of the bosses and we get to go build this.”

Then the reality is, at the end of the day, if there was something that you didn’t want to do that had to get done and you didn’t do it, you got to look in the mirror and be like, “Well, you’re the boss, you didn’t do it.” It’s the both sides of the coin that I think a positive, negative cut is one way to look at that because it can feel that way sometimes. And the reality is every job has 20 to 30% of it that you just don’t enjoy doing, and that’s totally true.

Jason Diamond:

It’s why they call it work. That’s why they pay you.

Nick Hubert:

They’d be pretty quick to point out that I’m the one of the partnership group that they’re going to have to chase for a smaller administrative item because, yeah, I honestly, just similarly speaking, don’t enjoy that. I want to go talk to clients. I want to go focus on building what we’re building. In finance speaks, it is a higher beta to just the all encompassing realities of running a business that is really hard to underscore without being in the seat. And yeah, there’s definitely 20 to 30% of that I would love to wave a magic wand and say, I don’t have to do anymore.

Jason Diamond:

Yeah, I appreciate that.

Nick Hubert:

You can’t have one without the other. It’s both sides.

Jason Diamond:

I think it’s getting easier and I think it’s getting more offloadable and some of it probably gets more… In some ways, more offloadable as you scale, but then you get a new set of problems, probably two, because you’re dealing with bigger… It’s a never ending. I think most business owners would agree with that. And you said it well, you take the good with the bad and overwhelmingly, most people we speak with in the independent space feel as you do, which is, are there things I would prefer to offload or that I would prefer not to do? Of course, but that’s almost just the price you pay for the freedom and for doing all the things you want to do.

Two more questions that I want to be sure to ask about where this has been a great episode. One is AI. Need to know your thoughts. Is this coming for our jobs? Do you think your firm is positioned to capture either asset flows or also just to leverage this technology and use it to serve clients better? Just give me your thoughts.

Nick Hubert:

I think, in some sense, it would be irresponsible as people this early in our entrepreneurial journey and thinking about how do we optimize what we do for clients to not be engaging with AI in some way, shape or form, at least in an evaluative posture. So we are actively, in a bunch of different ways, whether it’s buy it off the shelf or build it, continuing to find ways to think about, not only how do we drive efficiency, because there’s an obvious surface level dynamic of if I can save time and spend more time with clients, that is a go to thing objectively. And there’s this deeper dynamic of if it can amplify what…

Actually, back to your prior question, if it can amplify what I’m best at and enjoy and reduce what I don’t enjoy, that’s a massive win. And I think we’re on the surface of seeing that. That’s the opportunity we are motivated by that and pursuing that. And at the same time, I would say an operational principle that really is important to us, and you can almost call it a north star within the business is client security can never be put at risk for the sake of our own growth, our own efficiency, or anything else. There’s, I think, still a question mark as to how we think about trusting this. And so we are very cautious as we think about we will never try to move so quickly on any technology, whether it’s AI or otherwise that we risk our clients in some way, shape or form, because the reality is we are also in a context where AI is, when pulled, one of the least popular things happening in the world today for the average American. And so there’s no kudos here for being a leader.

Jason Diamond:

I totally agree. The first mover advantage here is slim to none.

Nick Hubert:

Yeah, you don’t want to be the one sticking your neck out on this in our industry. And yet there still objectively has a potential to be better for the clients. Navigating that I think is messy.

Taylor Gentry:

I think the only thing I’d add, which is pretty short, is the use of these tools has the ability to create a better deliverable for clients on a more consistent basis. And marrying that with exactly what Nick just outlined around the risk is really the magic piece here. And so I think, to the extent we can get it implemented effectively with the security, but also with, this is going to result in a lot better outcome for clients across the board, that’s a pretty attractive objective to go after and it’s pretty exciting to be in the industry with that now on the forefront in terms of ability to improve that experience over time.

Jason Diamond:

Yeah. No, that’s a good color to add. I want to end here with a potential HR violation, but you’ll forgive me. I’m not going to ask about age, but you are clearly both relatively young advisors. And this is a hot button issue in our industry, the idea that there are not a lot of talented, young next gen advisors at a time when a lot of gen one or older advisors are retiring out of the business. So what would you say… I think one of you made the comment earlier, it’s not necessarily the coolest industry to go into at 23 years old right out of school. I think more commonly people go into sales and trading, investment banking or some of the other finance verticals. What would you say to younger folks interested in wealth? And maybe I’d ask also, do you have any thoughts on how we solve this next gen talent crisis? And if you’re both secretly 90 years old, you can just do it.

Taylor Gentry:

You talking my internal age or my actual age?

Jason Diamond:

Why don’t you go first?

Nick Hubert:

Yeah, go ahead, Taylor.

Taylor Gentry:

I think there’s two threads here. The first is it’s not a sexy industry to go into and not as sexy as an investment banking, private equity shtick, if you will. I think from my perspective, it’s really important what you’re working on. The ability to be in a firm like what we are building with the diversity of work that is available is a little bit like the world’s your oyster and we’re designing it with that in mind. For Nick and I, the ability to work on many different situations throughout the day and throughout the week is actually why this business is so attractive and interesting and why we want to do it for 30 years. And so we’re building with that context. And so, in some ways, it’s almost like a plug for younger advisors, the ability to work in a firm like what we’re building where you’ve got this diversity of work that is not just trading stocks and bonds or just spreadsheeting or just financial planning. This is a much broader expression and experience than what I would call “traditional” wealth management. So I think that’s the key on that front.

Then, on the talent development side of the equation, if you will, this AI thing is going to be a big question mark. And what I mean by that is there is significant training that will be required in, call it traditional wealth management or the firm we’re building with regard to folks’ ability to actually learn when you can plug it into AI and get an answer that you don’t have to critically question or think through. And so there’s going to be a significant learning curve for folks that we’re going to have to continue to train and educate on in order to produce talent that can be long-term sustainable and beneficial for clients more writ large.

Jason Diamond:

Nick.

Nick Hubert:

Well, first and foremost, we haven’t given our third partner enough here of time. I think we have a tremendous benefit of having a multi-generational team at the partnership level where he’s in his mid to late 50s and can bring that additional experience to bear and as is necessary, and as is important because investing is an experienced business and a lot of clients want that. And so the power of that matters. I think that actually speaks to firms being willing to think of partnership at that level that partnership is not reserved for just once you’ve been there for a long time. So I think it’s getting at like, how do you share ownership earlier, do it in a way that is actually giving people a stake in the outcome and allowing that elevation to happen. I think that’s number one.

Number two, honestly, the existence of people like you and your team and that your family has built over the years, Jason, is awesome. And because of the ability for you to help people navigate and see how easy it is to actually run this business and build this business in some sense… And that’s in the broader spectrum of having seen. We work with so many different types of companies. We sometimes say our business is so much easier to run and it has come so far with technology and with people like you who are providers to us to allow it to be easier for us so to speak. That’s a big deal. I think that should be talked about more that there is a massive… What that allows is more time to, as Taylor mentioned, build what you actually want because you can outsource the compliance piece in a major way that allows you to not spend as much time on that as you used to.

So I don’t think that gets talked about enough. And I think if you just zoom out and view this in the perspective of post-2020, there was this massive movement of entrepreneurship through acquisitions and people looking at this idea of how do I get the life I want by way of not having to be on a two-year clock to go to the next job to the next job. Have something that I can have a long-term impact on where I get to build something and have employees. This is the perfect space for that because it’s such an awesome business where you get to work so intimately with people and clients and their life outcomes. They’re, again, relatively speaking, easier businesses to run relative to what’s out there. I’m just baffled by the fact that it is not seen a larger wave of younger people coming out of these more “traditional” paths and seeing this as an awesome place when they’re willing to go buy an HVAC company.

This is so much easier than that. So honestly, I think part of it’s just we all live coming from being in this space longer, we get stuck in our wealth management lane and I think it’s easy to then nitpick and get stuck in there. But when we take a more global perspective, it’s a massive opportunity that I hope more people take advantage of.

Jason Diamond:

Thank you for highlighting that. We call it the ecosystem of support for financial advisors, and it’s gotten so much more robust through the years. And a lot of times, people focus on the negatives of compliance burdens have gotten heavier and competition has gotten fiercer. And yes, that’s all true, but the flip side is the point you just made, Nick. So I appreciate you bringing that up.

Any last words of wisdom you’d want to share with our audience? This has been a fantastic episode and I can’t wait to have you back on to revisit the growth trajectory.

Nick Hubert:

Yeah, I’d say just thank you for the time. We’ll plug the podcast. We’ve enjoyed you guys for a really long time and being able to have the resource of what you guys have built is actually… In our partnership meetings, we’re bringing you guys up with some consistency. So thank you for the gift that you are to the industry and continuing to create opportunity for folks like us to come on here.

Jason Diamond:

Thank you so much.

Mindy Diamond:

As a financial advisor, you hold yourself to the highest standards of integrity, honesty, and credibility. You are successful because you take your professional responsibility seriously and are dedicated to your clients, but are you living your best business life? Are your goals aligned with your firms or could a better option exist? Should I Stay or Should I Go? is a book written with you in mind. It’s a self-guided journey that walks you through the key steps that we take with our advisor clients. This strategic thought process and roadmap to professional self-discovery, is designed to help you ask the right questions and think critically and objectively, whether you’re considering change or not. Learn how to get your copy at diamond-consultants.com/thebook.

Golf taught Constantine Hatzivassiliou how to perform under pressure. Building a nearly $5B multi-family office taught him that the best advisors become the first call when life, not just the markets, gets complicated.

Many advisors spend years mastering investments, but for affluent families, portfolio management is often just the starting point.

Jason Diamond welcomes Constantine Hatzivassiliou, Partner at Certuity, to discuss how his journey from aspiring professional golfer to leader of a nearly $5B multi-family office shaped his approach to client service. Their conversation explores why trust is earned long before a crisis, how family office services evolve naturally from client needs, and why the advisor’s role increasingly resembles that of a quarterback coordinating every aspect of a family’s financial life.

The discussion also examines organic growth, referrals, fiduciary advice, private equity’s impact on the RIA landscape, and the qualities that allow advisors to become indispensable over decades—not just market cycles.

Many advisors spend years perfecting investment management. But as clients become more successful, the job changes.

The questions become bigger than portfolio construction. A business is being sold. A family dynamic shifts. A tax issue emerges. An estate plan needs updating. Suddenly, the advisor isn’t simply managing assets—they’re coordinating decisions, relationships, and emotions.

For Constantine, that broader role was shaped long before he entered wealth management. As an aspiring professional golfer, he learned lessons about discipline, preparation, and performing under pressure that continue to influence how he serves clients today.

Jason and Constantine explore how Certuity grew from approximately $210 million in assets to nearly $5B, not through acquisitions but through referrals and a service model built on becoming indispensable to the families they advise. Constantine explains why he believes the best advisors function more like quarterbacks than portfolio managers, orchestrating the many moving pieces that come with significant wealth.

The conversation also examines the evolution of the multi-family office model, the role of fiduciary advice, the impact of private equity on the advisory landscape, and why experience, judgment, and trust remain the qualities clients value most.

Ultimately, this episode is about what it takes to become the first call when life – not just the markets – becomes complicated.

> Download a transcript of this episode…

How did professional golf prepare Constantine for advising wealthy families? (3:45)

Constantine explains why competing under pressure taught him discipline, emotional control, and process—qualities that now guide every client relationship.

How did Certuity grow from $210 million to nearly $5 billion? (8:00)

He shares why nearly all of the firm’s growth has come organically through client referrals rather than acquisitions or aggressive recruiting.

What separates a multi-family office from a traditional advisory firm? (11:45)

The conversation explores how expanding into trust, estate, tax, and family office services became a response to client needs—not a business strategy.

Why should advisors think of themselves as quarterbacks? (20:00)

Constantine recounts a client business sale that fell apart at the closing table and explains why advisors often become the person holding everything together.

How does Certuity view private equity and acquisitions? (36:20)

Jason and Constantine discuss when outside capital can make sense—and why Certuity has chosen a different path centered on client alignment.

Why do wisdom and experience still matter in an AI-driven world? (29:30)

Despite advances in technology, Constantine argues that judgment, trust, and perspective remain the qualities affluent families value most.

https://youtu.be/m72Hq6bMTo4

“The best advisors aren’t simply managing portfolios. They’re the first person clients call when life gets complicated.”

“A bad shot in golf is the equivalent of a bad day in the market. You can’t let one dictate everything that comes next.”

“More often than not, we’re not just financial advisors—we’re financial therapists.”

“Growth gets the headlines. Trust is what makes it possible.”

A multi-family office delivers integrated services beyond investment management, often coordinating tax, estate planning, philanthropy, business planning, and other complex financial matters for affluent families.

Constantine attributes the firm’s growth to deep client relationships, a collaborative service model, and becoming the trusted advisor clients recommend to others.

Golf reinforces discipline, emotional control, preparation, and performing under pressure—all qualities Constantine believes are essential for effective advisors.

While he understands why many firms pursue private equity, he believes every strategic decision should ultimately be measured against what best serves clients.

According to Constantine, exceptional advisors become trusted coordinators of a client’s financial life—bringing together specialists, solving problems, and providing perspective during life’s most important moments.

A multi-family office delivers integrated services beyond investment management, often coordinating tax, estate planning, philanthropy, business planning, and other complex financial matters for affluent families.

Constantine attributes the firm’s growth to deep client relationships, a collaborative service model, and becoming the trusted advisor clients recommend to others.

Golf reinforces discipline, emotional control, preparation, and performing under pressure—all qualities Constantine believes are essential for effective advisors.

While he understands why many firms pursue private equity, he believes every strategic decision should ultimately be measured against what best serves clients.

According to Constantine, exceptional advisors become trusted coordinators of a client’s financial life—bringing together specialists, solving problems, and providing perspective during life’s most important moments.

Constantine Hatzivassiliou is a Partner at Certuity, a nationally recognized multi-family office serving affluent families, entrepreneurs, executives, foundations, and endowments. He advises clients on the complex financial, tax, estate, and business planning decisions that accompany significant wealth, helping families coordinate all aspects of their financial lives through a comprehensive family office approach.

Drawing on more than two decades of experience, Constantine works closely with successful business owners, corporate executives, and multi-generational families to simplify financial complexity and align investment management, tax planning, estate planning, philanthropy, and family governance strategies. As a Certified Exit Planning Advisor (CEPA®), he frequently assists entrepreneurs in preparing for liquidity events, business transitions, and the long-term stewardship of family wealth. His clients often view him as a trusted advisor and strategic sounding board, helping them navigate important financial decisions with the perspective of both a family office professional and a coach.

Prior to joining Certuity, Constantine held advisory and banking positions with The Bank of New York Mellon, Bernstein Global Wealth Management, and Pacific Mercantile Bank. Before entering the financial services industry, he was a Golf Professional and member of the PGA of America, experiences that continue to shape his disciplined, competitive, and relationship-focused approach to advising clients.

Outside of his professional responsibilities, Constantine is passionate about mentoring young athletes and strengthening the communities in which he lives and works. He serves as a Board Member of Coerfontaine Football Club (CFC), a premier youth soccer organization focused on developing young athletes and helping them pursue collegiate and professional opportunities while fostering leadership, discipline, and character.

He also serves as Chair of the Safety and Security Committee for Parkland, where he works alongside community leadership to enhance resident safety, security, and quality of life. In addition, Constantine is a Founding Board Member of The Boardroom, a private membership organization focused on fostering meaningful relationships among business leaders, entrepreneurs, and professionals through networking, education, and philanthropy.

Born in Greece, Constantine spent his childhood in Montreal before relocating to South Florida. He attended the University of Florida before earning a Bachelor of Arts in Economics from Florida Atlantic University, where he graduated with honors. He holds the Certified Exit Planning Advisor (CEPA®) designation.

A lifelong student of the game, Constantine remains active in golf and is a member of Muirfield Village Golf Club, founded by his longtime  hero and mentor, Jack Nicklaus, as well as Parkland Golf & Country Club.

Constantine resides in Parkland, Florida, with his wife, Stephanie, and their two children, Nicholas and Olivia.

NOTE: The views and opinions expressed by the guests on this podcast are their own and do not necessarily reflect the views and opinions of Diamond Consultants. Neither Diamond Consultants nor the guests on this podcast are compensated in any way for their participation.

Lessons from the Links: From Golf Pro to $5B Family Office Partner

A conversation with Jason Diamond and Constantine Hatzivassiliou, Partner at Certuity.

Jason Diamond:

Welcome to the latest episode of our podcast series for financial advisors. Today’s episode is Lessons from the Links: From Golf Pro to $5B Family Office Partner. It’s a conversation with Constantine Hatzivassiliou, partner at Certuity. I’m Jason Diamond and this is the Diamond Podcast for Financial Advisors.

Mindy Diamond:

At Diamond Consultants, we help elite advisors identify the right environment for their businesses to thrive whether that’s at a wirehouse, boutique or independent firm. With nearly three decades of experience, we’ve guided thousands of advisors and represented more than a quarter of a trillion dollars in assets transitioned and, each year, one in four advisors managing $1 billion or more who change firms are our clients. Our process is education-driven and based on building relationships starting as your strategic partner well before you’re even thinking of a move. To schedule a confidential conversation, call us at (908) 879-1002.

Wondering why advisors change firms and where they’re headed? Are transition deals going up or down? Those very questions and more inspired us to create our annual advisor transition report, it’s the award-winning data-driven resource designed for advisors that connects the dots between the motivations around movement and the firm’s appetite for top talent. Arm yourself with the knowledge you need to make smart decisions, download your copy at diamond-consultants.com/transitionreport.

Jason Diamond:

Golf is a way of exposing who you really are, there are no teammates to blame, no clock to run out and no hiding from a bad decision. Every shot demands discipline, patience and the ability to stay focused when the pressure is highest, my guest today knows that firsthand. Before becoming a partner at Certuity, a multifamily office approaching five billion in assets, Constantine Hatzivassiliou was pursuing a career as a professional golfer. An injury ultimately redirected his path towards wealth management but many of the lessons he learned on the course still shaped the way he serves clients today.

Certuity has grown from roughly 210 million in assets to nearly five billion, that’s impressive on its own but the more interesting story is how they’ve done it. The firm has grown largely through referrals built around a multifamily office model and focused on becoming far more than an investment advisor to the families it serves. In Constantine’s view, the best advisors aren’t simply managing portfolios, they’re the first person clients call when a business is being sold, a family issue becomes complicated or a major decision carries consequences well beyond the balance sheet.

Constantine and I discuss the lessons golf teaches about handling pressure then we dive into the evolution from the traditional wealth management world to the multifamily office model, why referrals drive nearly all of Certuity’s growth, how he thinks about private equity’s influence on the advisory business and what it takes to become the first call for the wealthy families they serve and perhaps, most importantly, why the same qualities that help someone succeed on a golf course may be surprisingly relevant to building trust over a lifetime. It’s a great conversation so let’s dive in.

Constantine, thank you so much for joining, thrilled to have you here.

Constantine Hatzivassiliou:

Thank you for having me, excited to be here.

Jason Diamond:

Yeah, absolutely. So, you had an unconventional path to wealth management, you started as a professional golfer, I think that’s a first for us on this show, before ultimately transitioning into this world. Can you tell us a little bit about the journey and what brought you here?

Constantine Hatzivassiliou:

Yeah, I never thought I’d be here, my parents were certainly shocked that I got here path wise. Growing up, immigrants from Greece, you settle into Florida the traditional way where you either go down the diner route or the gas station route in mechanics which my father was the latter and school and education was never priority, it was always about supporting the family needs. So, next thing you know, sports are a critical part of any good household, that’s how I was raised and I played everything but golf. I grew up on a golf course because my parents believed that a location of a property was critical to long-term financial success. We lived on a golf course, it was in our backyard, we’d stare at it and we’d use it to play football or baseball or anything but actual golf.

And my freshman year at the University of Florida, I started dating a girl on the golf team and she got me hooked to the point where, after four years of hitting balls with the women’s and men’s golf team at the University of Florida for six hours a day, we finished school and realized I’m actually pretty good at the game and, while I have a finance and economics background and degree, let’s try and pursue this for a living and I was blessed. I had a sponsor who helped me succeed at golf on a small scale, it was a humbling experience to say the least. I was competing and playing with Sean O’Hair, Ken Duke, guys who made it out on tour for a very long time, we had the same sponsor so we functioned as a team, it was a collegiate team effectively trying to make it out on tour. And, unfortunately, my second year of competing, I blew out my back doing heavy deadlifts which set me aside for 18 months.

While I was recovering, my primary sponsor was in financial services and says, “Hey, you have a background in this, it’s killing you not being able to be on the golf course, why don’t you come work for me while you’re rehabbing so that, when you get back to playing golf, it’s easier for you to talk about our business as a sponsor to try and develop business to throw it to the financial services side?” And Jason, the reality is, after 18 months working there, I fell in love with it. I made way more money working in that environment than I ever would’ve made playing golf because, again, I came to the game late. I was decent but I was nowhere near the caliber of players that are succeeding now out on tour. So, I pivoted after having met my wife and decided to settle down into the wealth management space and, what is it now, 26 years later, going strong. So, it’s been a fun transition from golf into wealth management to say the least.

Jason Diamond:

Probably my favorite background … I watch a lot of golf, I should caveat that, probably my favorite origin story we’ve had, I’ll give you the Wanamaker trophy or whatever you get, first place. Let’s talk about the business now, so Certuity. For our audience who may not be familiar, tell us a little bit about the firm, what types of clients do you serve and any context you can provide on size as well. We’ll talk about how your firm got there but just give us where we are today to start with.

Constantine Hatzivassiliou:

So, goal by the end of the year is to have $5 billion in AUM, we’re just shy of that now. We currently service 428 families across the country. So, we’re boutiquey and nimble, we’re based in South Florida, we have offices in New York, San Fran and LA. I’m fortunate to be one of four partners at the firm supporting the growth and the direction of the company and it’s a fun endeavor in the sense that, when we first started, I was employee number four 16 years ago and, with 210 million in AUM at the time to grow it to where we are today, to learn all the things that we have over the years, the curve balls that were thrown at us because all of us came from massive institutional wealth management firms.

So, we transitioned from the Bernsteins of the world, the BNY Mellons of the world into an RIA in the South Florida market, there was absolutely an entrepreneurial learning curve involved.

Jason Diamond:

I bet. And on follow-up question, 16 years ago, did you have a book of business, client business and do you still maintain a book of business today?

Constantine Hatzivassiliou:

I do. The four of us at the firm share in all of the clients, we work together. Being in the Southeast, I’m responsible for, let’s call it, the Southeast demographics of the US which is a large portion of Certuity’s book. I have a partner in Tennessee, I have a partner in LA and San Francisco and we divide and conquer across the country. But, yes, we came over with a small book, we’ve all grown it organically since then. So, we’ve been very effective in how we’ve grown.

Jason Diamond:

Just from adding new client money?

Constantine Hatzivassiliou:

Strictly through new clients referred to us by existing clients.

Jason Diamond:

Wow. I want to talk more about the growth because that’s remarkable. But before I do, can we double click on the service model? So, I would say the most typical we hear, I think more of our guests typically come from the wirehouse world where it’s I have my book, you have your book. What does your service model look like? So, is it truly, if it’s working well from the end client perspective, you should be interchangeable with your partners and it’s a true team approach?

Constantine Hatzivassiliou:

How we engage our clients, the theory should be I can get hit by a bus tomorrow and outside of the client not being able to speak to me directly, they will not have a hiccup in any way, shape or form. And when we’re dealing with families across multiple generations, the way we’ve built our platform, that continuity is critical in the engagement process for the clients hiring us to help them through all of the challenges that they face.

Jason Diamond:

What’s your sweet spot in terms of client size?

Constantine Hatzivassiliou:

Our average client size today has just shy of eight million AUM with us. We have some clients who have $1 million certainly but they’re strategic in that their friends, their family, they could be centers of influence who help send business our way because they value what it is that we do and there’s a strategic partnership because we might need them for their trust and estate services or their accounting work and they have clients who have a need and we’re on the short list of people they refer to.

Jason Diamond:

That they trust. Yeah, makes sense. So, I’ve seen this in the news and also even on your own internal materials, I’ve seen you described as both a modern multifamily office, you’ll also obviously hear the term RIA as well. Does that distinction matter at all? And maybe my second part of that question would be what is the distinction between that space, whatever you call it, and the more traditional firm world from a client service perspective? You mentioned that all of your partners from that world.

Constantine Hatzivassiliou:

I started in this industry truly at an institutional level at Bernstein in New York and, for anyone who knows Bernstein, they really do brainwash you on the fiduciary model and the values affiliated with that philosophy has translated through my career at BNY Mellon which has a very similar feel as Bernstein. And then, when we came here, we instilled that same core value principle of fiduciary responsibility for our clients so we are very different than a traditional wirehouse or brokerage house, it is why we’ve grown so successfully. I would never, one, work for an institution that did bide by those standards and, secondarily, I wished Congress and Senate would turn around and actually implement a mandatory fiduciary liability for all financial advisors because, far too often, we see prospective clients or families get taken advantage of because the individual sitting across from them giving them financial advice is not necessarily aligned with their goals and objectives.

Jason Diamond:

So, I take it you are fee only.

Constantine Hatzivassiliou:

We are fee only.

Jason Diamond:

Yeah. I don’t want to lose the thread on the first part of my question. Do you think there is a distinction between a multifamily office and an RIA? I don’t want to lead you here but to me it implies a different level or different caliber of service model that probably includes more of the ancillary trust and estate and CPA type stuff that higher network clients need but curious what your thoughts are.

Constantine Hatzivassiliou:

Our first seven years at the firm, we were strictly an RIA, we functioned as an advisory service provider to our clients. What attracted me and my partners to Certuity was the nimbleness of the firm. So, for instance, at BNY Mellon, we often deemed a change necessary as moving an aircraft carrier across the world but it was an impossible task to accomplish. But when you’re small and nimble and clients come to you with a need and you’re in the service, ultimately, first and foremost, it made sense for us to start building out family office services for our clients because they had a need and we found it as a way to centralize everything because, far too often, when the communication standards break down between all the individual parts, one, it’s more expensive for the clients and, two, the process isn’t efficient, things get missed. So, we tried, largely due to our growth, to bring everything in house and our clients appreciate that for it.

Jason Diamond:

So, this is not a chicken and egg situation, this is very much we had large clients, we were attracting large clients and, in order to service them optimally, here’s what we felt we needed to build. Is that fair?

Constantine Hatzivassiliou:

100%.

Jason Diamond:

Let’s shift gears, I need to go deeper on the professional golf thread a little bit. I promise I won’t make the whole interview about your golf background. I’m curious if you feel like that experience or that, I don’t know, upbringing or, I guess, background laid any foundation for the way you engage with clients today or the way you operate as a business leader today.

Constantine Hatzivassiliou:

So, there’s a couple parts to that. The golf side, certainly, just from an engaging client perspective, 90% of our clients are golfers.

Jason Diamond:

It’s very true.

Constantine Hatzivassiliou:

Right. It just helps because of our background and certainly with some of the clients and partners that we have at the firm, golf is a critical thread in what we do. However, when it comes to golf, what I learned playing golf at a high level directly translates to how we manage money for clients and I’ll express it this way. There’s generally two types of golfers, there’s the artist, the Sergios of the world who don’t fundamentally function off of specific points in their swing or a very structured platform, they see something, their mind becomes creative and they execute on it. I was never that way, I am a numbers person, I think everything analytically, I break everything down to the minute, everything is strategized and organized, I was taught to practice that way by Coach Alexander at the University of Florida and that foundational element seemed easy, it worked. If you practice properly, you’ve succeeded. Under pressure, all those hours and hours of repetition translated to success more often than not.

In our industry, it’s process-driven, it has to be unemotional. A bad shot in golf is the equivalent of a bad day in the market, you can’t let one bad day in the market influence everything you do for the next year. Same way on the golf course playing in a tournament, you can’t allow one golf shot to affect the rest of the round. We kid with our clients oftentimes that, while we are fundamentally their financial advisor, more often than not, we’re their financial therapist. We have to control their emotions and make sure they’re not making an irrational decision. For instance, a couple days ago we were out with a client the day that Iran shot down one of the US military helicopters and we’re sitting down at lunch and, all of a sudden, his phone starts blowing up because he’s getting all these Google alerts to the market heading in the wrong direction and he had to go do a life insurance test later on that afternoon.

So, all week, he had prepped and he was calm and he was relaxed, he was really excited, he’s, “My wife is setting me up with a new insurance policy and I know it’s for her benefit but all my numbers look good, I’m going to ace this and my premiums will be really low because of it,” it was a $25 million policy. And as he’s looking at his phone and he sees the market collapsing in his mind, his blood pressure rose to no end, you could see that his anxiety level went through the roof and, had I not been there with him at the time to hold his hand through that process, his afternoon would’ve been shot. I would’ve got a phone call saying, “What are we doing to prevent 2% loss in my portfolio,” because that’s how he thinks and, in that moment, I was the therapist to talk him off a ledge.

It’s so hard for individuals to manage the stress of the markets, that golfer mentality of, okay, just breathe, relax, let’s see what’s going on, let’s make an educated, confirmed decision, let’s circle back with our caddy if we’re on tour and competing and make a unified decision for the long-term success of the goal that we’re trying to achieve. And what we do every day is the same thing with our clients.

Jason Diamond:

It’s an incredibly thoughtful answer, I expected a version of the latter part of your answer. I appreciate that you added the part about just most clients like golf, enjoy talking about golf, enjoy playing golf and it’s an effective business development tool, there’s no question.

Constantine Hatzivassiliou:

So, I have two kids, a 12-year-old and an eight-year-old, my son who’s 12 who’s an exceptional soccer player and wants to, aspires to play professionally one day has now fallen in love with golf which I’m ecstatic about. I think golf and tennis, from a business development perspective-

Jason Diamond:

Yeah, lifelong sports.

Constantine Hatzivassiliou:

And I look at it now and my mentor when I started in the business was absolutely right. The fact that I could get a CEO of a Fortune 100 company to want to actively spend four hours with me where we could dive into the weeds about their personal life, their financial situation, their business, you could never get that time otherwise. I urge everyone who’s coming out of college or is going into college who wants to aspire to be in any type of sales related role, golf is a great venue to make long-term relationships.

Jason Diamond:

And importantly, tennis is not as good on the knees long-term or the back long-term. So, you stick to golf, you get a little more longevity out of it.

Constantine Hatzivassiliou:

It does help, yes. You’re right.

Jason Diamond:

My thought always goes to people call it the 15th club in golf, just this mental element of the game and to me it’s the clear moment in golf that always comes to mind for me is the 72nd hole. I don’t know if you just watched the US Women’s Open but Nelly Korda standing over a two-foot putt that I really thought she missed, is there an equivalent of that moment? Are you ever able to recreate that pressure in your current role or is that something that you miss?

Constantine Hatzivassiliou:

Jason, we have those moments weekly, countless stories. Here’s where I love my job. I’ve transitioned from being the guy behind the screen who is just trading accounts, that’s where we all start and you have to have that foundational perspective of what’s involved in trading an account on a daily basis. Not that we ever picked stocks to an extensive level, we were generally managing ETFs, mutual funds and strategies but I’ll give you an example. So, just last week, we had a family and this is where the family office side comes in more so than the financial advisory services come in. We had spent four months in helping a family sell their business, it was a life altering moment, the dad started the business, the dad had been independently successful, net worth of well into eight figures, was happy and content, brought his son into the business, son was brilliant, saw an opportunity within the business and grew the business by 4,000%.

Jason Diamond:

Literally?

Constantine Hatzivassiliou:

Yup. All because of this, the son saw a different direction and pivoted the business and grew it out and here he is, getting ready to have their first child and he gets approached by a firm to acquire his business. They’re ecstatic, the number was perfect, I thought it was overvalued, I was telling them that there’s no way they could turn it down because the number was too significant. Had they gone to the market, they would probably never achieve that level of return. And literally, the day of closing, as we’re expecting the wire to come through, the deal gets pulled. So, here you have the father who’s crushed because he was trying to provide something for his son, the son who’s just devastated because he now was preparing for the second stage of his life and you go through at that stage the classic stages of grief, it’s the cycle that goes through it.

I was holding their hand through the three-month process up to there, every day, hourly calls, strategizing, building everything out, organizing the accounting team, organizing the attorneys, getting it all to work out. And here I am, father and son, unbelievably stressed, you have the wives in the background who can’t quite comprehend what’s going on, you have employees beneath them who are now confused as to there was a transition getting ready to take place and the only person who can step in under that critical moment to bring everybody back together was me. So, here I am thinking, 20 years ago, I’ll just pick stocks and bonds for individuals but now I’m in the middle of deal flow trying to help a family solve the issues that arise.

So, those are hugely critical-

Jason Diamond:

Yeah, that’s right.

Constantine Hatzivassiliou:

…moments where, because our clients are our friends and family, we care for them like they’re our own, you become emotionally attached. And the same pressure that I felt when I won my first mini tour event after college, when I had to get up and down from the impossible bunker shot and I hit it to six feet and I made the crucial put to win my first $23,000 check which I thought was unbelievable, they gave you those big old-fashioned-

Jason Diamond:

The Happy Gilmore checks.

Constantine Hatzivassiliou:

Exactly, right? It was the greatest day at that time. The stress of being in that bunker trying to hit that shot is the same stress I felt having two phones ringing, one the father, one the son where we have to keep that situation separate. So, you’re diving into unbelievably stressful situations and the best part is, when we get it all solved and literally yesterday we solved the entire dynamic of the business, I get a text from the son saying that this was the most incredible rollercoaster experience he’s ever experienced, that he’s incredibly grateful for all that I did and our team did for him and that, for the rest of his life, we will always be the first person he calls to solve any of his problems.

So, for us, that’s the recreation of that stressful moment and then the victory on the back end. Twenty-five years ago, I got the big Happy Gilmore check. Yesterday, I got that text which I’ve printed out and framed and have it in my office as a constant memory of why it is we do what we do.

Jason Diamond:

And I would bet that’s more impactful than the $23,000. It’s an incredible story and I’ll tell you why, you said it but it’s as far away from stocks and bonds as you could possibly get. But I think, most advisors, a story like that resonates much more. It leads into my next question. You intentionally choose to service a high net worth segment of the market and I would assume that number’s probably creeping up, not down over time in terms of who you service. My thought is that’s a very competitive segment of the market as well. Is this how you differentiate is just you make it about those types of human examples or is there more to it?

Constantine Hatzivassiliou:

I’m envious of the advisor who could walk into a room of 200 people and they become the central focal point of the room where they can walk up to every single person and fearlessly ask them incredibly personal information, I’m not wired that way. For me, I’m very much the individual that I will find the one person that I have common ground with, I will deepen that relationship and I will add value and, because of the value that I create, I become a critical component of that individual’s success. And that’s how we’ve grown our business holistically at the firm largely buy that extra layer of service.

We’re a commodity business. Being in South Florida, the clubs that I belong to, 10 to 15% of the members feel like they’re financial advisors. You could throw a rock anywhere and find a financial advisor so how do I differentiate myself? The only way I can truly differentiate myself and my firm is the level of service we provide, to go that extra step. To where, when we’re calling a client, they know I’m calling them to support their needs not because I’m seeking something for any ulterior motive.

Jason Diamond:

But you don’t mention financial planning or investment management or asset custody. Is that because I assume just that’s table stakes? Of course we do that but … Okay, yeah. Makes sense.

Constantine Hatzivassiliou:

That’s the easy part, right? That’s foundationally … And to your earlier point, you were asking the RIA model. One of the biggest challenges that we had down here in South Florida was the RIA model is new. If you were in the northeast, RIAs are very common, out west, incredibly common. Down here in South Florida, I just finished dealing with Bernie Madoff.

Jason Diamond:

You were fighting the good education fight a little bit.

Constantine Hatzivassiliou:

At Bernstein, 108 of our clients had assets with Bernie Madoff.

Jason Diamond:

Yeah.

Constantine Hatzivassiliou:

So, when you leave, one of our biggest growing curves as an RIA in South Florida was, when you leave the power of BNY Mellon or Bernstein and you’re some random little shop called Certuity, no one knows who you are. So, there was a big part of our education in the business was learning how to educate clients and prospective clients on the value of the RIA model and the fiduciary model in particular.

Jason Diamond:

Could you give me the 30-second answer to that if somebody says who are you, your prospect? I’ll tell you why I ask. Forget just Bernstein’s and BNYs of the world, a Morgan Stanley advisor or Merrill advisor has the exact same fear. I’m leaving Merrill to go launch Jason Diamond Wealth Management, my client’s going to say, “Well, who is that?” So, give me the quick pitch.

Constantine Hatzivassiliou:

Your typical broker, let’s say, you’re not really hiring JP Morgan, you’re not really hiring Wells Fargo, you’re not hiring Goldman Sachs, you’re hiring the advisor who works for that institution. Now, yes, that advisor has the Rolodex of data and information available at the firm level but, ultimately, you’re entrusting that individual to make your decisions for you. The broker who leaves the brokerage model to open up their own brick and mortar operation has to then decide are they continuing down the wirehouse brokerage model where they’re transactional in nature, the economics behind that, far more profitable. The revenue streams affiliated with a brokerage house drastically blows us out of the water. But then you have to also look at yourself in the mirror so how are you running your book of business, how are you running your practice.

So, to answer your 30-second question, the RIA model, in my opinion, is truly the only way any family of wealth should proceed with an advisory firm because you want an individual who is aligned in your goals and objectives. Our clients know that I’m their chief financial officer, I work for them. They task us with building out a financial strategy that is customized to their individual needs and they never have to worry do I have an ulterior motive as to why I’m presenting an option in that strategy. And, because of that, the fiduciary model, I think, is critical for our success as a firm and, again, as I mentioned earlier, I wish it’s something that was industry well and not the vast minority.

Jason Diamond:

Yeah. No, that’s a great answer. So, do you think then that, as time has gone on, this has gotten easier? I assume the answer is yes either because more clients are aware of your brand and/or more aware of the space as a whole.

Constantine Hatzivassiliou:

The first thing that helped the most was some gray hair. When I started at Bernstein, I attempted to solicit new clients very much the same way I do today. But when I was 26 years old and I’m sitting in front of a family worth and the dad was in the 70s and he lived his life and I’m younger than his kids, he would look at me and say, “What do you really know? What experience do you have?” So, doing this now for as long as I have, the number one thing that has helped me the most in growth is just wisdom and time. Without that, yes, you can be a rockstar stock picker. We have so many kids coming out of college today with the advent of AI and technology that have algorithms that could run unbelievable portfolios and there is a segment of the market who wants to hire and engage those individuals but, generally speaking, the families that we service, that is 10th or 12th on the list of importance.

Jason Diamond:

No, I think that’s spot on. I think most high net worth clients counterintuitively agree with that, that alpha, for lack of a better term, is really not the name of the game or not in the top five reasons why you would engage with a financial advisor.

Constantine Hatzivassiliou:

Agreed. The biggest thing that we’ve been doing to educate clients especially in today’s environment, I had a call yesterday with an individual, a client who lives in New Jersey who works out of New York for a hedge fund, he knows our space incredibly well. He’s one of those kids, 28 years old, brilliant, as smart as you’ll ever be but his tax bracket is atrocious. He is paying so much of his W-2 income in taxes and building out a strategy that can reduce his tax liability by several hundred thousand dollars a year far exceeds any alpha I can generate by picking a top decile performer.

Jason Diamond:

What was the strategy? Move to Florida? I’m just kidding. Don’t answer that.

Constantine Hatzivassiliou:

We offered that but, unfortunately, he has to be physically in the office in New York City but yes.

Jason Diamond:

I think that will resonate, by the way, your gray hair comment. I appreciate the humility and the modesty in that because, the reality is, one of the questions I was going to ask you about was next-gen talent cultivation. In my opinion, this is a hard game for younger folks for that reason. People sit across from other people with a lot of money and they say, “Why am I going to entrust you with my life’s work when you just don’t have that degree of experience?” I was asking more even about your firm success and your firm story, have you felt like that’s caught on more? Do you have more brand awareness, if you will, now when you go to a prospect meeting or do you think you’re still constantly fighting that education fight?

Constantine Hatzivassiliou:

So, first part, brands, it’s improved in our immediate network. In our little bubble of the world, yes, it’s known. Let’s call it, in South Florida the influential attorneys, the accountants, the divorce attorneys know who we are because, having been down here long enough, we’ve had opportunities to work together. Our network of friends, certainly, the word spreads. But in the grand scheme of things, we are so small in the South Florida landscape or the LA landscape or the New York landscape so any incremental gain that we pick up is meaningful.

And then, as it relates to young talent, our success is completely, long-term, derived by the young talent that we bring in to nurture them to help them grow. I look at our success, two of our critical mentors and board members of our firm are in their 80s, their children and grandchildren, nepotism aside, whether it was interning while in college or coming to work for us after school, they’re our best employees. And our goal as a firm, just like how I was offered the opportunity to become a partner and own a piece of the business, our goal long term will be to transition the business to this younger generation that we’re developing.

I look at, again, those two board members who are in their 80s, the advice they’ve given me is don’t ever stop working, you have to be doing something. And I turn to them and say, “I don’t work every day.” I put in 20 hour days, well, not quite 20, 18 hour days but it’s never work because, what I do every day, I don’t deem it work, I love what I do, I don’t ever see myself stopping. Because they’ll tell me all of their friends that have stopped working or sold their business, invariably, the men die within six months because boredom and we always joke around that you’ll continue to work forever.

So, I would hope that one day I transition into that advisory board member role where I step aside day-to-day activity where I’m now a mentor to our younger generation that we’re promoting into partners because we’ve made promises to our clients that we will forever be their family office. So, we have to, as part of our growth model, have those transitions in place because we’re servicing many families that have 85-year-old clients and two-year-old clients and we’re tasked with the two-year-olds as well as the 85-year-old.

Jason Diamond:

I also feel like there’s a little bit of younger generations I think have been reluctant to some degree to get it, you can disagree with this, to get into this space because there’s a more appeal to things like investment banking and sales and trading to some degree. The other problem obviously you alluded to is asset gathering. Your model speaks so clearly to success because you don’t say I own the client, that’s my relationship. To me, you plant the seeds of being able to handle succession much better than somebody who does the mine is mine and yours is yours approach. Is that fair?

Constantine Hatzivassiliou:

That’s completely accurate. And I think there’s two types of people that serve in the financial advisory space. You have the individual who is analytics driven, who likes being behind the bank of monitors trading account and there’s a critical part of our firm and our success is driven by the team in the office that aren’t necessarily client facing that do all the heavy lifting every day because they’re really doing the heavy work. Myself, my partners, the select few, while talented and able to do that, realize the value that we present is quarterbacking the relationship and helping understand all the components. We kid around that we’ve all stayed at a Holiday Inn Express last night, we’ve become experts in tax, we’ve become experts at trust and estate planning, we’ve become experts at divorce, we’ve become experts at the medical field. It’s shocking how it’s 2:00 in the morning and you get a phone call, panic attack by a client saying they need a doctor for X, Y and Z, can you connect me.

So, the younger generation, yes, the sexy space is investment banking and that is really hard work. I could not do what my friends at Goldman do who are at these private mid-market funds, that’s just not me. I’ve been fortunate that I stumbled into an avenue in financial services that I think perfectly fits my personality and my want and desire to help others because that’s what we’re driven by and we try and hire people with that same mindset. The hardest thing as an RIA especially in South Florida is finding and retaining talent that is like-minded and that could function well within our family.

Jason Diamond:

If you build a firm predicated on culture and client service, I understand, certainly, the importance of that. I want to shift gears, I don’t want to lose this thought. You mentioned organic growth, it’s incredible. You have not mentioned inorganic growth at all and maybe because you haven’t had to but give me your thoughts on M&A, private equity in this space, do you have plans to sell the business, take on a capital partner, buy other RIAs?

Constantine Hatzivassiliou:

Yeah. So, I understand why private equity in the last 10 years has come into the market. For years, they bought up insurance practices, that recurring revenue, sticky assets, it makes sense. Personally, I’m not a fan of them being in our markets, I think they’re motivated at the end of the day by AUM growth, revenue growth and the second transaction which, for most of our clients, would not make sense because, again, that then questions why it is that we’re motivated to do something. Am I taking extra risk in the portfolio because I want to grow the AUM because I’m looking to sell in a year? Am I bringing in a strategy that has a higher fee? For us, it doesn’t work. In the brokerage model, it makes perfect sense.

Now, there are some RIAs who leave the wirehouses, open up an RIA shop, do really well for their clients but don’t have the long-term aspirations of making the institution a legacy to where they’re passing it off. I hope my kids one day want to come work for dad and follow in his steps, that’d be amazing. Just like our younger generation working at the firm, our goal is we’ve already targeted the three or four guys that will be partner one day and we’ll transition the business over to them. But it’s okay if there’s an RIA out there who doesn’t have that transition product or isn’t motivated by that and is looking at it as a vehicle that I’ve built a really good successful book of business and I want to now retire and spend time with my family and kids and travel, et cetera, and that’s where PE steps in and offers an attractive number and the person makes their move.

So, I can’t fault the individual for wanting that and I’m not saying that they’re not doing well by their clients, it’s just, for us, I’m not a fan of it because, again, I’m first critically and always focused on what’s best for the client.

Jason Diamond:

Fair. And I largely agree with some of what you said around private equity in this space but private equity enables … Obviously, it’s capital so which enables acquisitions which is why a lot of firms take on private equity. So, what about the idea of potentially buying businesses to start up inorganic growth?

Constantine Hatzivassiliou:

We have gone down the road of acquiring other institutions potentially. The challenge is, because we manage money so uniquely and our approach is so different, I’m not going to bring on an institution or bring in a new partner to the firm or a new book of business that we’ve acquired if the methodology and the life of that book doesn’t mirror ours. So, yes, there is opportunities to grow through acquisition, it’s not something that we are leaning on heavily. However, for the right institution that’s available that is aligned with our thinking, whose clients would value and appreciate how we do things or, if that institution is doing something truly unique that we would want to bolt onto our platform, all day long because, again, for the benefit of the client, it makes sense.

So, yes, there are opportunities for that. Too often we find that, when a book is available for acquisition, the highest bidder tends to win out and we don’t have the deep enough pockets to write a multiple that we don’t deem to be, let’s call it, market neutral.

Jason Diamond:

Yeah, market prudent. I understand the premise and I think that’s fair. I also think you have the luxury, because of your organic growth, you can be super, super picky about inorganic and I love how you bring it all back to the lens of the client. Can this improve the client experience in some way? And, if so, yes, we’ll take a look.

I got time for one more question, I can’t believe time has flown. You’ve had a remarkable journey, professional golf now partner at a $4 billion plus on the way to $5 billion RIA multifamily office. What are you most proud of when you reflect on your career journey?

Constantine Hatzivassiliou:

What am I most proud of? To see what Rich, myself and Mark and Jayson built over these years from where we were sitting in a small conference room, struggling to figure out how do we find a way to hire a trust and estate attorney to help with that component, which CPAs do we bring on board in-house because clients have a need. So, the entrepreneurial spirit involved in growing the business, the late nights, the struggles, the banter back and forth, to put so much blood, sweat and tears into this and now to look at all that we’ve accomplished, being in four separate states with offices, having so many wonderful employees that have come to us from all over the world, Germany, from China, from Tokyo, bringing people in to the US and building out something that, when we leave at the end of the day, are incredibly proud of.

My father’s no longer with us, for 50 years, I always strived to make him proud because he never told me that he was proud of me, he was the classic Greek old-fashioned dad. I think he looks down on his now for everything that we’ve built and would say that he’s proud of us so, for me, that’s the best.

Jason Diamond:

Yeah. That’s an incredible place to end. Thank you for sharing that, it’s a touching place to end and I appreciate you being open. Thank you. This has been one of my favorite episodes, your journey, your humility, your honesty, your transparency, it’s no wonder you’ve built a business you’ve built. So, thanks for joining us, Constantine. I look forward to having you back on to talk about the next chapter.

Constantine Hatzivassiliou:

Thank you. Next time we’ll do it from the golf course.

Jason Diamond:

Oh, absolutely.

Mindy Diamond:

As a financial advisor, you hold yourself to the highest standards of integrity, honesty and credibility. You are successful because you take your professional responsibility seriously and are dedicated to your clients. But are you living your best business life? Are your goals aligned with your firms or could a better option exist? Should I Stay or Should I Go? Is a book written with you in mind? It’s a self-guided journey that walks you through the key steps that we take with our advisor clients. This strategic thought process and roadmap to professional self-discovery is designed to help you ask the right questions and think critically and objectively whether you’re considering change or not. Learn how to get your copy at diamond-consultants.com/thebook.

Lessons from the Links: From Golf Pro to $5B Family Office Partner

A conversation with Jason Diamond and Constantine Hatzivassiliou, Partner at Certuity.

Jason Diamond:

Welcome to the latest episode of our podcast series for financial advisors. Today’s episode is Lessons from the Links: From Golf Pro to $5B Family Office Partner. It’s a conversation with Constantine Hatzivassiliou, partner at Certuity. I’m Jason Diamond and this is the Diamond Podcast for Financial Advisors.

Mindy Diamond:

At Diamond Consultants, we help elite advisors identify the right environment for their businesses to thrive whether that’s at a wirehouse, boutique or independent firm. With nearly three decades of experience, we’ve guided thousands of advisors and represented more than a quarter of a trillion dollars in assets transitioned and, each year, one in four advisors managing $1 billion or more who change firms are our clients. Our process is education-driven and based on building relationships starting as your strategic partner well before you’re even thinking of a move. To schedule a confidential conversation, call us at (908) 879-1002.

Wondering why advisors change firms and where they’re headed? Are transition deals going up or down? Those very questions and more inspired us to create our annual advisor transition report, it’s the award-winning data-driven resource designed for advisors that connects the dots between the motivations around movement and the firm’s appetite for top talent. Arm yourself with the knowledge you need to make smart decisions, download your copy at diamond-consultants.com/transitionreport.

Jason Diamond:

Golf is a way of exposing who you really are, there are no teammates to blame, no clock to run out and no hiding from a bad decision. Every shot demands discipline, patience and the ability to stay focused when the pressure is highest, my guest today knows that firsthand. Before becoming a partner at Certuity, a multifamily office approaching five billion in assets, Constantine Hatzivassiliou was pursuing a career as a professional golfer. An injury ultimately redirected his path towards wealth management but many of the lessons he learned on the course still shaped the way he serves clients today.

Certuity has grown from roughly 210 million in assets to nearly five billion, that’s impressive on its own but the more interesting story is how they’ve done it. The firm has grown largely through referrals built around a multifamily office model and focused on becoming far more than an investment advisor to the families it serves. In Constantine’s view, the best advisors aren’t simply managing portfolios, they’re the first person clients call when a business is being sold, a family issue becomes complicated or a major decision carries consequences well beyond the balance sheet.

Constantine and I discuss the lessons golf teaches about handling pressure then we dive into the evolution from the traditional wealth management world to the multifamily office model, why referrals drive nearly all of Certuity’s growth, how he thinks about private equity’s influence on the advisory business and what it takes to become the first call for the wealthy families they serve and perhaps, most importantly, why the same qualities that help someone succeed on a golf course may be surprisingly relevant to building trust over a lifetime. It’s a great conversation so let’s dive in.

Constantine, thank you so much for joining, thrilled to have you here.

Constantine Hatzivassiliou:

Thank you for having me, excited to be here.

Jason Diamond:

Yeah, absolutely. So, you had an unconventional path to wealth management, you started as a professional golfer, I think that’s a first for us on this show, before ultimately transitioning into this world. Can you tell us a little bit about the journey and what brought you here?

Constantine Hatzivassiliou:

Yeah, I never thought I’d be here, my parents were certainly shocked that I got here path wise. Growing up, immigrants from Greece, you settle into Florida the traditional way where you either go down the diner route or the gas station route in mechanics which my father was the latter and school and education was never priority, it was always about supporting the family needs. So, next thing you know, sports are a critical part of any good household, that’s how I was raised and I played everything but golf. I grew up on a golf course because my parents believed that a location of a property was critical to long-term financial success. We lived on a golf course, it was in our backyard, we’d stare at it and we’d use it to play football or baseball or anything but actual golf.

And my freshman year at the University of Florida, I started dating a girl on the golf team and she got me hooked to the point where, after four years of hitting balls with the women’s and men’s golf team at the University of Florida for six hours a day, we finished school and realized I’m actually pretty good at the game and, while I have a finance and economics background and degree, let’s try and pursue this for a living and I was blessed. I had a sponsor who helped me succeed at golf on a small scale, it was a humbling experience to say the least. I was competing and playing with Sean O’Hair, Ken Duke, guys who made it out on tour for a very long time, we had the same sponsor so we functioned as a team, it was a collegiate team effectively trying to make it out on tour. And, unfortunately, my second year of competing, I blew out my back doing heavy deadlifts which set me aside for 18 months.

While I was recovering, my primary sponsor was in financial services and says, “Hey, you have a background in this, it’s killing you not being able to be on the golf course, why don’t you come work for me while you’re rehabbing so that, when you get back to playing golf, it’s easier for you to talk about our business as a sponsor to try and develop business to throw it to the financial services side?” And Jason, the reality is, after 18 months working there, I fell in love with it. I made way more money working in that environment than I ever would’ve made playing golf because, again, I came to the game late. I was decent but I was nowhere near the caliber of players that are succeeding now out on tour. So, I pivoted after having met my wife and decided to settle down into the wealth management space and, what is it now, 26 years later, going strong. So, it’s been a fun transition from golf into wealth management to say the least.

Jason Diamond:

Probably my favorite background … I watch a lot of golf, I should caveat that, probably my favorite origin story we’ve had, I’ll give you the Wanamaker trophy or whatever you get, first place. Let’s talk about the business now, so Certuity. For our audience who may not be familiar, tell us a little bit about the firm, what types of clients do you serve and any context you can provide on size as well. We’ll talk about how your firm got there but just give us where we are today to start with.

Constantine Hatzivassiliou:

So, goal by the end of the year is to have $5 billion in AUM, we’re just shy of that now. We currently service 428 families across the country. So, we’re boutiquey and nimble, we’re based in South Florida, we have offices in New York, San Fran and LA. I’m fortunate to be one of four partners at the firm supporting the growth and the direction of the company and it’s a fun endeavor in the sense that, when we first started, I was employee number four 16 years ago and, with 210 million in AUM at the time to grow it to where we are today, to learn all the things that we have over the years, the curve balls that were thrown at us because all of us came from massive institutional wealth management firms.

So, we transitioned from the Bernsteins of the world, the BNY Mellons of the world into an RIA in the South Florida market, there was absolutely an entrepreneurial learning curve involved.

Jason Diamond:

I bet. And on follow-up question, 16 years ago, did you have a book of business, client business and do you still maintain a book of business today?

Constantine Hatzivassiliou:

I do. The four of us at the firm share in all of the clients, we work together. Being in the Southeast, I’m responsible for, let’s call it, the Southeast demographics of the US which is a large portion of Certuity’s book. I have a partner in Tennessee, I have a partner in LA and San Francisco and we divide and conquer across the country. But, yes, we came over with a small book, we’ve all grown it organically since then. So, we’ve been very effective in how we’ve grown.

Jason Diamond:

Just from adding new client money?

Constantine Hatzivassiliou:

Strictly through new clients referred to us by existing clients.

Jason Diamond:

Wow. I want to talk more about the growth because that’s remarkable. But before I do, can we double click on the service model? So, I would say the most typical we hear, I think more of our guests typically come from the wirehouse world where it’s I have my book, you have your book. What does your service model look like? So, is it truly, if it’s working well from the end client perspective, you should be interchangeable with your partners and it’s a true team approach?

Constantine Hatzivassiliou:

How we engage our clients, the theory should be I can get hit by a bus tomorrow and outside of the client not being able to speak to me directly, they will not have a hiccup in any way, shape or form. And when we’re dealing with families across multiple generations, the way we’ve built our platform, that continuity is critical in the engagement process for the clients hiring us to help them through all of the challenges that they face.

Jason Diamond:

What’s your sweet spot in terms of client size?

Constantine Hatzivassiliou:

Our average client size today has just shy of eight million AUM with us. We have some clients who have $1 million certainly but they’re strategic in that their friends, their family, they could be centers of influence who help send business our way because they value what it is that we do and there’s a strategic partnership because we might need them for their trust and estate services or their accounting work and they have clients who have a need and we’re on the short list of people they refer to.

Jason Diamond:

That they trust. Yeah, makes sense. So, I’ve seen this in the news and also even on your own internal materials, I’ve seen you described as both a modern multifamily office, you’ll also obviously hear the term RIA as well. Does that distinction matter at all? And maybe my second part of that question would be what is the distinction between that space, whatever you call it, and the more traditional firm world from a client service perspective? You mentioned that all of your partners from that world.

Constantine Hatzivassiliou:

I started in this industry truly at an institutional level at Bernstein in New York and, for anyone who knows Bernstein, they really do brainwash you on the fiduciary model and the values affiliated with that philosophy has translated through my career at BNY Mellon which has a very similar feel as Bernstein. And then, when we came here, we instilled that same core value principle of fiduciary responsibility for our clients so we are very different than a traditional wirehouse or brokerage house, it is why we’ve grown so successfully. I would never, one, work for an institution that did bide by those standards and, secondarily, I wished Congress and Senate would turn around and actually implement a mandatory fiduciary liability for all financial advisors because, far too often, we see prospective clients or families get taken advantage of because the individual sitting across from them giving them financial advice is not necessarily aligned with their goals and objectives.

Jason Diamond:

So, I take it you are fee only.

Constantine Hatzivassiliou:

We are fee only.

Jason Diamond:

Yeah. I don’t want to lose the thread on the first part of my question. Do you think there is a distinction between a multifamily office and an RIA? I don’t want to lead you here but to me it implies a different level or different caliber of service model that probably includes more of the ancillary trust and estate and CPA type stuff that higher network clients need but curious what your thoughts are.

Constantine Hatzivassiliou:

Our first seven years at the firm, we were strictly an RIA, we functioned as an advisory service provider to our clients. What attracted me and my partners to Certuity was the nimbleness of the firm. So, for instance, at BNY Mellon, we often deemed a change necessary as moving an aircraft carrier across the world but it was an impossible task to accomplish. But when you’re small and nimble and clients come to you with a need and you’re in the service, ultimately, first and foremost, it made sense for us to start building out family office services for our clients because they had a need and we found it as a way to centralize everything because, far too often, when the communication standards break down between all the individual parts, one, it’s more expensive for the clients and, two, the process isn’t efficient, things get missed. So, we tried, largely due to our growth, to bring everything in house and our clients appreciate that for it.

Jason Diamond:

So, this is not a chicken and egg situation, this is very much we had large clients, we were attracting large clients and, in order to service them optimally, here’s what we felt we needed to build. Is that fair?

Constantine Hatzivassiliou:

100%.

Jason Diamond:

Let’s shift gears, I need to go deeper on the professional golf thread a little bit. I promise I won’t make the whole interview about your golf background. I’m curious if you feel like that experience or that, I don’t know, upbringing or, I guess, background laid any foundation for the way you engage with clients today or the way you operate as a business leader today.

Constantine Hatzivassiliou:

So, there’s a couple parts to that. The golf side, certainly, just from an engaging client perspective, 90% of our clients are golfers.

Jason Diamond:

It’s very true.

Constantine Hatzivassiliou:

Right. It just helps because of our background and certainly with some of the clients and partners that we have at the firm, golf is a critical thread in what we do. However, when it comes to golf, what I learned playing golf at a high level directly translates to how we manage money for clients and I’ll express it this way. There’s generally two types of golfers, there’s the artist, the Sergios of the world who don’t fundamentally function off of specific points in their swing or a very structured platform, they see something, their mind becomes creative and they execute on it. I was never that way, I am a numbers person, I think everything analytically, I break everything down to the minute, everything is strategized and organized, I was taught to practice that way by Coach Alexander at the University of Florida and that foundational element seemed easy, it worked. If you practice properly, you’ve succeeded. Under pressure, all those hours and hours of repetition translated to success more often than not.

In our industry, it’s process-driven, it has to be unemotional. A bad shot in golf is the equivalent of a bad day in the market, you can’t let one bad day in the market influence everything you do for the next year. Same way on the golf course playing in a tournament, you can’t allow one golf shot to affect the rest of the round. We kid with our clients oftentimes that, while we are fundamentally their financial advisor, more often than not, we’re their financial therapist. We have to control their emotions and make sure they’re not making an irrational decision. For instance, a couple days ago we were out with a client the day that Iran shot down one of the US military helicopters and we’re sitting down at lunch and, all of a sudden, his phone starts blowing up because he’s getting all these Google alerts to the market heading in the wrong direction and he had to go do a life insurance test later on that afternoon.

So, all week, he had prepped and he was calm and he was relaxed, he was really excited, he’s, “My wife is setting me up with a new insurance policy and I know it’s for her benefit but all my numbers look good, I’m going to ace this and my premiums will be really low because of it,” it was a $25 million policy. And as he’s looking at his phone and he sees the market collapsing in his mind, his blood pressure rose to no end, you could see that his anxiety level went through the roof and, had I not been there with him at the time to hold his hand through that process, his afternoon would’ve been shot. I would’ve got a phone call saying, “What are we doing to prevent 2% loss in my portfolio,” because that’s how he thinks and, in that moment, I was the therapist to talk him off a ledge.

It’s so hard for individuals to manage the stress of the markets, that golfer mentality of, okay, just breathe, relax, let’s see what’s going on, let’s make an educated, confirmed decision, let’s circle back with our caddy if we’re on tour and competing and make a unified decision for the long-term success of the goal that we’re trying to achieve. And what we do every day is the same thing with our clients.

Jason Diamond:

It’s an incredibly thoughtful answer, I expected a version of the latter part of your answer. I appreciate that you added the part about just most clients like golf, enjoy talking about golf, enjoy playing golf and it’s an effective business development tool, there’s no question.

Constantine Hatzivassiliou:

So, I have two kids, a 12-year-old and an eight-year-old, my son who’s 12 who’s an exceptional soccer player and wants to, aspires to play professionally one day has now fallen in love with golf which I’m ecstatic about. I think golf and tennis, from a business development perspective-

Jason Diamond:

Yeah, lifelong sports.

Constantine Hatzivassiliou:

And I look at it now and my mentor when I started in the business was absolutely right. The fact that I could get a CEO of a Fortune 100 company to want to actively spend four hours with me where we could dive into the weeds about their personal life, their financial situation, their business, you could never get that time otherwise. I urge everyone who’s coming out of college or is going into college who wants to aspire to be in any type of sales related role, golf is a great venue to make long-term relationships.

Jason Diamond:

And importantly, tennis is not as good on the knees long-term or the back long-term. So, you stick to golf, you get a little more longevity out of it.

Constantine Hatzivassiliou:

It does help, yes. You’re right.

Jason Diamond:

My thought always goes to people call it the 15th club in golf, just this mental element of the game and to me it’s the clear moment in golf that always comes to mind for me is the 72nd hole. I don’t know if you just watched the US Women’s Open but Nelly Korda standing over a two-foot putt that I really thought she missed, is there an equivalent of that moment? Are you ever able to recreate that pressure in your current role or is that something that you miss?

Constantine Hatzivassiliou:

Jason, we have those moments weekly, countless stories. Here’s where I love my job. I’ve transitioned from being the guy behind the screen who is just trading accounts, that’s where we all start and you have to have that foundational perspective of what’s involved in trading an account on a daily basis. Not that we ever picked stocks to an extensive level, we were generally managing ETFs, mutual funds and strategies but I’ll give you an example. So, just last week, we had a family and this is where the family office side comes in more so than the financial advisory services come in. We had spent four months in helping a family sell their business, it was a life altering moment, the dad started the business, the dad had been independently successful, net worth of well into eight figures, was happy and content, brought his son into the business, son was brilliant, saw an opportunity within the business and grew the business by 4,000%.

Jason Diamond:

Literally?

Constantine Hatzivassiliou:

Yup. All because of this, the son saw a different direction and pivoted the business and grew it out and here he is, getting ready to have their first child and he gets approached by a firm to acquire his business. They’re ecstatic, the number was perfect, I thought it was overvalued, I was telling them that there’s no way they could turn it down because the number was too significant. Had they gone to the market, they would probably never achieve that level of return. And literally, the day of closing, as we’re expecting the wire to come through, the deal gets pulled. So, here you have the father who’s crushed because he was trying to provide something for his son, the son who’s just devastated because he now was preparing for the second stage of his life and you go through at that stage the classic stages of grief, it’s the cycle that goes through it.

I was holding their hand through the three-month process up to there, every day, hourly calls, strategizing, building everything out, organizing the accounting team, organizing the attorneys, getting it all to work out. And here I am, father and son, unbelievably stressed, you have the wives in the background who can’t quite comprehend what’s going on, you have employees beneath them who are now confused as to there was a transition getting ready to take place and the only person who can step in under that critical moment to bring everybody back together was me. So, here I am thinking, 20 years ago, I’ll just pick stocks and bonds for individuals but now I’m in the middle of deal flow trying to help a family solve the issues that arise.

So, those are hugely critical-

Jason Diamond:

Yeah, that’s right.

Constantine Hatzivassiliou:

…moments where, because our clients are our friends and family, we care for them like they’re our own, you become emotionally attached. And the same pressure that I felt when I won my first mini tour event after college, when I had to get up and down from the impossible bunker shot and I hit it to six feet and I made the crucial put to win my first $23,000 check which I thought was unbelievable, they gave you those big old-fashioned-

Jason Diamond:

The Happy Gilmore checks.

Constantine Hatzivassiliou:

Exactly, right? It was the greatest day at that time. The stress of being in that bunker trying to hit that shot is the same stress I felt having two phones ringing, one the father, one the son where we have to keep that situation separate. So, you’re diving into unbelievably stressful situations and the best part is, when we get it all solved and literally yesterday we solved the entire dynamic of the business, I get a text from the son saying that this was the most incredible rollercoaster experience he’s ever experienced, that he’s incredibly grateful for all that I did and our team did for him and that, for the rest of his life, we will always be the first person he calls to solve any of his problems.

So, for us, that’s the recreation of that stressful moment and then the victory on the back end. Twenty-five years ago, I got the big Happy Gilmore check. Yesterday, I got that text which I’ve printed out and framed and have it in my office as a constant memory of why it is we do what we do.

Jason Diamond:

And I would bet that’s more impactful than the $23,000. It’s an incredible story and I’ll tell you why, you said it but it’s as far away from stocks and bonds as you could possibly get. But I think, most advisors, a story like that resonates much more. It leads into my next question. You intentionally choose to service a high net worth segment of the market and I would assume that number’s probably creeping up, not down over time in terms of who you service. My thought is that’s a very competitive segment of the market as well. Is this how you differentiate is just you make it about those types of human examples or is there more to it?

Constantine Hatzivassiliou:

I’m envious of the advisor who could walk into a room of 200 people and they become the central focal point of the room where they can walk up to every single person and fearlessly ask them incredibly personal information, I’m not wired that way. For me, I’m very much the individual that I will find the one person that I have common ground with, I will deepen that relationship and I will add value and, because of the value that I create, I become a critical component of that individual’s success. And that’s how we’ve grown our business holistically at the firm largely buy that extra layer of service.

We’re a commodity business. Being in South Florida, the clubs that I belong to, 10 to 15% of the members feel like they’re financial advisors. You could throw a rock anywhere and find a financial advisor so how do I differentiate myself? The only way I can truly differentiate myself and my firm is the level of service we provide, to go that extra step. To where, when we’re calling a client, they know I’m calling them to support their needs not because I’m seeking something for any ulterior motive.

Jason Diamond:

But you don’t mention financial planning or investment management or asset custody. Is that because I assume just that’s table stakes? Of course we do that but … Okay, yeah. Makes sense.

Constantine Hatzivassiliou:

That’s the easy part, right? That’s foundationally … And to your earlier point, you were asking the RIA model. One of the biggest challenges that we had down here in South Florida was the RIA model is new. If you were in the northeast, RIAs are very common, out west, incredibly common. Down here in South Florida, I just finished dealing with Bernie Madoff.

Jason Diamond:

You were fighting the good education fight a little bit.

Constantine Hatzivassiliou:

At Bernstein, 108 of our clients had assets with Bernie Madoff.

Jason Diamond:

Yeah.

Constantine Hatzivassiliou:

So, when you leave, one of our biggest growing curves as an RIA in South Florida was, when you leave the power of BNY Mellon or Bernstein and you’re some random little shop called Certuity, no one knows who you are. So, there was a big part of our education in the business was learning how to educate clients and prospective clients on the value of the RIA model and the fiduciary model in particular.

Jason Diamond:

Could you give me the 30-second answer to that if somebody says who are you, your prospect? I’ll tell you why I ask. Forget just Bernstein’s and BNYs of the world, a Morgan Stanley advisor or Merrill advisor has the exact same fear. I’m leaving Merrill to go launch Jason Diamond Wealth Management, my client’s going to say, “Well, who is that?” So, give me the quick pitch.

Constantine Hatzivassiliou:

Your typical broker, let’s say, you’re not really hiring JP Morgan, you’re not really hiring Wells Fargo, you’re not hiring Goldman Sachs, you’re hiring the advisor who works for that institution. Now, yes, that advisor has the Rolodex of data and information available at the firm level but, ultimately, you’re entrusting that individual to make your decisions for you. The broker who leaves the brokerage model to open up their own brick and mortar operation has to then decide are they continuing down the wirehouse brokerage model where they’re transactional in nature, the economics behind that, far more profitable. The revenue streams affiliated with a brokerage house drastically blows us out of the water. But then you have to also look at yourself in the mirror so how are you running your book of business, how are you running your practice.

So, to answer your 30-second question, the RIA model, in my opinion, is truly the only way any family of wealth should proceed with an advisory firm because you want an individual who is aligned in your goals and objectives. Our clients know that I’m their chief financial officer, I work for them. They task us with building out a financial strategy that is customized to their individual needs and they never have to worry do I have an ulterior motive as to why I’m presenting an option in that strategy. And, because of that, the fiduciary model, I think, is critical for our success as a firm and, again, as I mentioned earlier, I wish it’s something that was industry well and not the vast minority.

Jason Diamond:

Yeah. No, that’s a great answer. So, do you think then that, as time has gone on, this has gotten easier? I assume the answer is yes either because more clients are aware of your brand and/or more aware of the space as a whole.

Constantine Hatzivassiliou:

The first thing that helped the most was some gray hair. When I started at Bernstein, I attempted to solicit new clients very much the same way I do today. But when I was 26 years old and I’m sitting in front of a family worth and the dad was in the 70s and he lived his life and I’m younger than his kids, he would look at me and say, “What do you really know? What experience do you have?” So, doing this now for as long as I have, the number one thing that has helped me the most in growth is just wisdom and time. Without that, yes, you can be a rockstar stock picker. We have so many kids coming out of college today with the advent of AI and technology that have algorithms that could run unbelievable portfolios and there is a segment of the market who wants to hire and engage those individuals but, generally speaking, the families that we service, that is 10th or 12th on the list of importance.

Jason Diamond:

No, I think that’s spot on. I think most high net worth clients counterintuitively agree with that, that alpha, for lack of a better term, is really not the name of the game or not in the top five reasons why you would engage with a financial advisor.

Constantine Hatzivassiliou:

Agreed. The biggest thing that we’ve been doing to educate clients especially in today’s environment, I had a call yesterday with an individual, a client who lives in New Jersey who works out of New York for a hedge fund, he knows our space incredibly well. He’s one of those kids, 28 years old, brilliant, as smart as you’ll ever be but his tax bracket is atrocious. He is paying so much of his W-2 income in taxes and building out a strategy that can reduce his tax liability by several hundred thousand dollars a year far exceeds any alpha I can generate by picking a top decile performer.

Jason Diamond:

What was the strategy? Move to Florida? I’m just kidding. Don’t answer that.

Constantine Hatzivassiliou:

We offered that but, unfortunately, he has to be physically in the office in New York City but yes.

Jason Diamond:

I think that will resonate, by the way, your gray hair comment. I appreciate the humility and the modesty in that because, the reality is, one of the questions I was going to ask you about was next-gen talent cultivation. In my opinion, this is a hard game for younger folks for that reason. People sit across from other people with a lot of money and they say, “Why am I going to entrust you with my life’s work when you just don’t have that degree of experience?” I was asking more even about your firm success and your firm story, have you felt like that’s caught on more? Do you have more brand awareness, if you will, now when you go to a prospect meeting or do you think you’re still constantly fighting that education fight?

Constantine Hatzivassiliou:

So, first part, brands, it’s improved in our immediate network. In our little bubble of the world, yes, it’s known. Let’s call it, in South Florida the influential attorneys, the accountants, the divorce attorneys know who we are because, having been down here long enough, we’ve had opportunities to work together. Our network of friends, certainly, the word spreads. But in the grand scheme of things, we are so small in the South Florida landscape or the LA landscape or the New York landscape so any incremental gain that we pick up is meaningful.

And then, as it relates to young talent, our success is completely, long-term, derived by the young talent that we bring in to nurture them to help them grow. I look at our success, two of our critical mentors and board members of our firm are in their 80s, their children and grandchildren, nepotism aside, whether it was interning while in college or coming to work for us after school, they’re our best employees. And our goal as a firm, just like how I was offered the opportunity to become a partner and own a piece of the business, our goal long term will be to transition the business to this younger generation that we’re developing.

I look at, again, those two board members who are in their 80s, the advice they’ve given me is don’t ever stop working, you have to be doing something. And I turn to them and say, “I don’t work every day.” I put in 20 hour days, well, not quite 20, 18 hour days but it’s never work because, what I do every day, I don’t deem it work, I love what I do, I don’t ever see myself stopping. Because they’ll tell me all of their friends that have stopped working or sold their business, invariably, the men die within six months because boredom and we always joke around that you’ll continue to work forever.

So, I would hope that one day I transition into that advisory board member role where I step aside day-to-day activity where I’m now a mentor to our younger generation that we’re promoting into partners because we’ve made promises to our clients that we will forever be their family office. So, we have to, as part of our growth model, have those transitions in place because we’re servicing many families that have 85-year-old clients and two-year-old clients and we’re tasked with the two-year-olds as well as the 85-year-old.

Jason Diamond:

I also feel like there’s a little bit of younger generations I think have been reluctant to some degree to get it, you can disagree with this, to get into this space because there’s a more appeal to things like investment banking and sales and trading to some degree. The other problem obviously you alluded to is asset gathering. Your model speaks so clearly to success because you don’t say I own the client, that’s my relationship. To me, you plant the seeds of being able to handle succession much better than somebody who does the mine is mine and yours is yours approach. Is that fair?

Constantine Hatzivassiliou:

That’s completely accurate. And I think there’s two types of people that serve in the financial advisory space. You have the individual who is analytics driven, who likes being behind the bank of monitors trading account and there’s a critical part of our firm and our success is driven by the team in the office that aren’t necessarily client facing that do all the heavy lifting every day because they’re really doing the heavy work. Myself, my partners, the select few, while talented and able to do that, realize the value that we present is quarterbacking the relationship and helping understand all the components. We kid around that we’ve all stayed at a Holiday Inn Express last night, we’ve become experts in tax, we’ve become experts at trust and estate planning, we’ve become experts at divorce, we’ve become experts at the medical field. It’s shocking how it’s 2:00 in the morning and you get a phone call, panic attack by a client saying they need a doctor for X, Y and Z, can you connect me.

So, the younger generation, yes, the sexy space is investment banking and that is really hard work. I could not do what my friends at Goldman do who are at these private mid-market funds, that’s just not me. I’ve been fortunate that I stumbled into an avenue in financial services that I think perfectly fits my personality and my want and desire to help others because that’s what we’re driven by and we try and hire people with that same mindset. The hardest thing as an RIA especially in South Florida is finding and retaining talent that is like-minded and that could function well within our family.

Jason Diamond:

If you build a firm predicated on culture and client service, I understand, certainly, the importance of that. I want to shift gears, I don’t want to lose this thought. You mentioned organic growth, it’s incredible. You have not mentioned inorganic growth at all and maybe because you haven’t had to but give me your thoughts on M&A, private equity in this space, do you have plans to sell the business, take on a capital partner, buy other RIAs?

Constantine Hatzivassiliou:

Yeah. So, I understand why private equity in the last 10 years has come into the market. For years, they bought up insurance practices, that recurring revenue, sticky assets, it makes sense. Personally, I’m not a fan of them being in our markets, I think they’re motivated at the end of the day by AUM growth, revenue growth and the second transaction which, for most of our clients, would not make sense because, again, that then questions why it is that we’re motivated to do something. Am I taking extra risk in the portfolio because I want to grow the AUM because I’m looking to sell in a year? Am I bringing in a strategy that has a higher fee? For us, it doesn’t work. In the brokerage model, it makes perfect sense.

Now, there are some RIAs who leave the wirehouses, open up an RIA shop, do really well for their clients but don’t have the long-term aspirations of making the institution a legacy to where they’re passing it off. I hope my kids one day want to come work for dad and follow in his steps, that’d be amazing. Just like our younger generation working at the firm, our goal is we’ve already targeted the three or four guys that will be partner one day and we’ll transition the business over to them. But it’s okay if there’s an RIA out there who doesn’t have that transition product or isn’t motivated by that and is looking at it as a vehicle that I’ve built a really good successful book of business and I want to now retire and spend time with my family and kids and travel, et cetera, and that’s where PE steps in and offers an attractive number and the person makes their move.

So, I can’t fault the individual for wanting that and I’m not saying that they’re not doing well by their clients, it’s just, for us, I’m not a fan of it because, again, I’m first critically and always focused on what’s best for the client.

Jason Diamond:

Fair. And I largely agree with some of what you said around private equity in this space but private equity enables … Obviously, it’s capital so which enables acquisitions which is why a lot of firms take on private equity. So, what about the idea of potentially buying businesses to start up inorganic growth?

Constantine Hatzivassiliou:

We have gone down the road of acquiring other institutions potentially. The challenge is, because we manage money so uniquely and our approach is so different, I’m not going to bring on an institution or bring in a new partner to the firm or a new book of business that we’ve acquired if the methodology and the life of that book doesn’t mirror ours. So, yes, there is opportunities to grow through acquisition, it’s not something that we are leaning on heavily. However, for the right institution that’s available that is aligned with our thinking, whose clients would value and appreciate how we do things or, if that institution is doing something truly unique that we would want to bolt onto our platform, all day long because, again, for the benefit of the client, it makes sense.

So, yes, there are opportunities for that. Too often we find that, when a book is available for acquisition, the highest bidder tends to win out and we don’t have the deep enough pockets to write a multiple that we don’t deem to be, let’s call it, market neutral.

Jason Diamond:

Yeah, market prudent. I understand the premise and I think that’s fair. I also think you have the luxury, because of your organic growth, you can be super, super picky about inorganic and I love how you bring it all back to the lens of the client. Can this improve the client experience in some way? And, if so, yes, we’ll take a look.

I got time for one more question, I can’t believe time has flown. You’ve had a remarkable journey, professional golf now partner at a $4 billion plus on the way to $5 billion RIA multifamily office. What are you most proud of when you reflect on your career journey?

Constantine Hatzivassiliou:

What am I most proud of? To see what Rich, myself and Mark and Jayson built over these years from where we were sitting in a small conference room, struggling to figure out how do we find a way to hire a trust and estate attorney to help with that component, which CPAs do we bring on board in-house because clients have a need. So, the entrepreneurial spirit involved in growing the business, the late nights, the struggles, the banter back and forth, to put so much blood, sweat and tears into this and now to look at all that we’ve accomplished, being in four separate states with offices, having so many wonderful employees that have come to us from all over the world, Germany, from China, from Tokyo, bringing people in to the US and building out something that, when we leave at the end of the day, are incredibly proud of.

My father’s no longer with us, for 50 years, I always strived to make him proud because he never told me that he was proud of me, he was the classic Greek old-fashioned dad. I think he looks down on his now for everything that we’ve built and would say that he’s proud of us so, for me, that’s the best.

Jason Diamond:

Yeah. That’s an incredible place to end. Thank you for sharing that, it’s a touching place to end and I appreciate you being open. Thank you. This has been one of my favorite episodes, your journey, your humility, your honesty, your transparency, it’s no wonder you’ve built a business you’ve built. So, thanks for joining us, Constantine. I look forward to having you back on to talk about the next chapter.

Constantine Hatzivassiliou:

Thank you. Next time we’ll do it from the golf course.

Jason Diamond:

Oh, absolutely.

Mindy Diamond:

As a financial advisor, you hold yourself to the highest standards of integrity, honesty and credibility. You are successful because you take your professional responsibility seriously and are dedicated to your clients. But are you living your best business life? Are your goals aligned with your firms or could a better option exist? Should I Stay or Should I Go? Is a book written with you in mind? It’s a self-guided journey that walks you through the key steps that we take with our advisor clients. This strategic thought process and roadmap to professional self-discovery is designed to help you ask the right questions and think critically and objectively whether you’re considering change or not. Learn how to get your copy at diamond-consultants.com/thebook.

As AI makes expertise more accessible, what becomes an advisor’s true advantage? EI expert James Woodfall explains why authentic human connection may be the one thing technology can’t replicate.

As artificial intelligence reshapes how information is delivered, financial advisors are being challenged to rethink what truly differentiates their value. Mindy Diamond sits down with James Woodfall, a former wealth management business owner turned emotional intelligence expert and founder of Raise Your EI, to explore why emotional intelligence may become one of the profession’s greatest competitive advantages. Together, they discuss how rapport, curiosity, and authentic human connection influence trust, referrals, leadership, and client loyalty and why those skills can be developed just like technical expertise. The conversation also examines the difference between AI’s “synthetic empathy” and the authentic relationships clients continue to value—and why that distinction matters to financial advisors now more than ever.  

For decades, advisors have built successful businesses by combining technical expertise with thoughtful financial guidance. But as AI makes information more accessible and planning tools more sophisticated, expertise alone is becoming less of a differentiator.

James Woodfall believes the future belongs to advisors who master something technology cannot authentically replicate: human connection.

Drawing on his experience as both a former wealth management firm owner and a specialist in communication and behavioral science, James explains why emotional intelligence isn’t simply a “soft skill.” It’s a business skill that affects nearly every aspect of an advisory practice—from building trust and earning referrals to leading teams and helping clients make difficult decisions.

Mindy and James explore why asking better questions matters more than having better answers, how curiosity creates stronger relationships than scripts ever can, and why advisors who create memorable client experiences may find themselves even more valuable in an increasingly automated world.

The conversation ultimately reframes AI not as a replacement for advisors, but as a catalyst forcing the profession to rediscover the uniquely human qualities clients have valued all along.  

> Download a transcript of this episode…

Why do better questions lead to better financial advice? (6:10)

James explains why financial planning is only as good as the conversations that precede it—and why understanding a client’s fears and aspirations leads to better outcomes than simply gathering financial facts.

How does emotional intelligence translate into business growth? (15:30)

Rapport isn’t simply about making clients feel comfortable. James discusses why advisors who build trust quickly tend to earn more referrals and become significantly more referable.

Can emotional intelligence actually be learned? (37:05)

Contrary to popular belief, emotional intelligence isn’t an innate personality trait. James explains why it is a trainable skill and how advisors can intentionally improve it throughout their careers.

What makes authentic empathy different from AI? (39:10)

One of the episode’s most compelling discussions explores the difference between AI’s ability to simulate empathy and the authentic emotional connection that develops between two people.

Why should advisors think more about experience than efficiency? (45:10)

Clients don’t always pay more for information. Often, they pay more for confidence, judgment, reassurance, and the experience of working with someone they trust.

Will AI replace advisors or elevate the best ones? (46:55)

James shares why he believes AI is more likely to automate routine work while making relationship-centered advisors even more valuable.

https://youtu.be/xlQMQm6mqtc

“Rapport building is one of the foundational things for trust building.”

“It’s not real empathy. It’s synthetic empathy.”

“If all of our decisions were made on price, Ferrari wouldn’t have a business.”

“The advisors who create authentic human connection may be the ones who remain untouchable.”

James defines emotional intelligence as the ability to recognize, understand, and influence emotions in ourselves and others. For advisors, those skills strengthen communication, trust, leadership, and client relationships.

Yes. Unlike IQ, emotional intelligence can be improved through intentional practice, feedback, coaching, and greater self-awareness.

Clients often remember and recommend how an advisor made them feel more than the technical work performed. Solving emotional concerns creates stories clients naturally share with others.

AI can recognize language patterns and respond empathetically, but it doesn’t genuinely experience human emotion. James argues that authentic empathy remains one of an advisor’s greatest competitive advantages.

Rather than viewing AI solely as a competitor, advisors should use it to improve efficiency while investing more time in conversations, judgment, and relationships that technology cannot fully replace.

Stop viewing emotional intelligence as a soft skill. Treat it as a business skill that directly influences growth, leadership, client loyalty, and long-term differentiation.

James defines emotional intelligence as the ability to recognize, understand, and influence emotions in ourselves and others. For advisors, those skills strengthen communication, trust, leadership, and client relationships.

Yes. Unlike IQ, emotional intelligence can be improved through intentional practice, feedback, coaching, and greater self-awareness.

Clients often remember and recommend how an advisor made them feel more than the technical work performed. Solving emotional concerns creates stories clients naturally share with others.

AI can recognize language patterns and respond empathetically, but it doesn’t genuinely experience human emotion. James argues that authentic empathy remains one of an advisor’s greatest competitive advantages.

Rather than viewing AI solely as a competitor, advisors should use it to improve efficiency while investing more time in conversations, judgment, and relationships that technology cannot fully replace.

Stop viewing emotional intelligence as a soft skill. Treat it as a business skill that directly influences growth, leadership, client loyalty, and long-term differentiation.

Why AI Matters Now: Filling the Estate Planning Gap with Wealth.com

The Paradox of Choice Traps Successful Advisors

Freedom vs. Familiarity: Is It Worth Disrupting Comfort for Something That Might Be Better?

James Woodfall, founder of Raise Your EI, is a former financial planner who now advises financial services and firms on how they can leverage emotional intelligence (EI) to improve individual and organizational performance. He is the co-author, with Cliff Lansley, of “The Heart of Finance,” which teaches finance professionals to develop the emotional intelligence needed to build effective and profitable client relationships.

NOTE: The views and opinions expressed by the guests on this podcast are their own and do not necessarily reflect the views and opinions of Diamond Consultants. Neither Diamond Consultants nor the guests on this podcast are compensated in any way for their participation.

Emotional Intelligence: The “Untouchable” Differentiator in an AI World

A conversation with Mindy Diamond and James Woodfall, Communication and Behavior Specialist at Raise Your EI.     

Mindy Diamond:

Welcome to the latest episode of our podcast series for financial advisors. Today’s episode is Emotional Intelligence: The “Untouchable” Differentiator in an AI World. It’s a conversation with James Woodfall, Communication and Behavior Specialist from Raise Your EI. I’m Mindy Diamond, and this is the Diamond Podcast for Financial Advisors.

At Diamond Consultants, we help elite advisors identify the right environment for their businesses to thrive, whether that’s at a wirehouse, boutique, or independent firm. With nearly three decades of experience, we’ve guided thousands of advisors and represented more than a quarter of a trillion dollars in assets transitioned. And each year, one in four advisors managing a billion dollars or more who change firms are our clients. Our process is education driven and based on building relationships, starting as your strategic partner well before you’re even thinking of a move. To schedule a confidential conversation, call us at (908) 879-1002.

Wondering why advisors change firms and where they’re headed? Are transition deals going up or down? Those very questions and more inspired us to create our Annual Advisor Transition Report. It’s the award-winning, data-driven resource designed for advisors that connects the dots between the motivations around movement and the firm’s appetite for top talent. Arm yourself with the knowledge you need to make smart decisions. Download your copy at diamond-consultants.com/transitionreport.

For years, advisors have competed on expertise, the ability to solve problems, deliver answers, and provide guidance clients couldn’t easily find on their own. But today, those answers are becoming easier to access via artificial intelligence and tools like ChatGPT, Claude, and Perplexity. AI can generate planning ideas, summarize complex topics, and answer questions in seconds. As the technology continues to improve, it raises an important question. If information becomes increasingly commoditized, what will clients continue to value most?

My guest today, James Woodfall, is the Founder of the training firm, Raise Your EI, and a former wealth management business owner. James now helps advisors, leaders, and organizations strengthen the communication and behavioral skills that drive trust, influence, and performance. Skills rooted in emotional intelligence or EI, something that AI cannot authentically replicate. What’s interesting about James’s perspective is that he doesn’t view emotional intelligence as a soft skill. He views it as a business skill, one that impacts how advisors build rapport, earn referrals, lead teams, deepen client relationships, and ultimately differentiate themselves in an increasingly competitive marketplace that includes human and machine-driven advice.

Our conversation explores why rapport is the foundation of trust, how emotional intelligence can be developed like any other professional skill, and why advisors who learn to create authentic human connection may be best positioned to thrive alongside AI, not compete against it. Or as James puts it, remain untouchable in the face of a changing world. Because while technology may continue to reshape how advice is delivered, the experience of being understood, trusted, and guided by another human being remains remarkably difficult to replicate. So, let’s get to it.

James, thank you for joining me today, especially coming all the way from the UK. I’m grateful.

James Woodfall:

Thanks for having me on.

Mindy Diamond:

So, let’s start at the beginning. You’re a different kind of guest for us, and a topic that is near and dear to my heart because I’m always all about emotional intelligence and EQ, but it’s a topic that sometimes can feel a little squishy to some folks. So, tell us a little bit about your background and really how you got into the world of wealth management.

James Woodfall:

I got into wealth management probably was by accident while I was, I think about 19 years old. I got a job at a bank because I was living with different jobs and it was the first company that would take me. So I ended up working in a bank as a cashier in a branch.

And then after a series of different career moves, I ended up running my own wealth management firm for about nine years, which I sold about three and a half years ago. Around the time that I was selling it, I did my first master’s degree in communication and behavior analysis, and that’s when I started taking a bit of a deep dive into understanding emotional intelligence and behavior and communication. But really, I started that journey before I sold my wealth management company, and really the goal was, how can I become a better financial advisor to my clients by having a better understanding of their psychology behavior around money so that I could communicate with them more effectively, help them build their plans? So I had a bit of a… like a lot of people I speak to in wealth management, they fell into it.

Mindy Diamond:

So, a lot to unpack there and I’m fascinated by your story. Tell us a little bit about how you began to use or leverage emotional intelligence. You say you got into it or were fascinated by it because it was a way of helping your clients. So, talk to us a little bit about that. How did you begin to see the impact long before you started this business?

James Woodfall:

So going back a couple of steps to that. When I started the business, it was very transactional. You’d sit down with the client, you find out about what sort of assets they have, what type of plans they have already, and you look for gaps where you can optimize things, or there was a product which they need which you didn’t have. But I moved away from that type of service to a financial planning led service. So, where actually before we get talking about, well, how do we structure your world? We spend a lot of time building a plan in cashflow modeling software. So the one that I used was over at a company called Voyant, and effectively I build a cashflow plan for the clients, which would map out based on assumptions of what age they would reach financial independence. And then that then would then move on to, how to we optimize your holdings?

Now what occurred to me pretty quickly in offering that service is that the outputs from that type of exercise are only as good as the inputs. So you’re really relying on the client to be able to come up with the answers to the questions that you ask them to make the financial plan work. And in my experience, quite a lot of the time you sit down with these people and you ask them, “Imagine you’re retired, what does an ideal week look like for you?” So, what I realized is actually I was asking clients a lot of questions which no one had ever asked them before, such as, “If you go retire, imagine you’re retired tomorrow, what does your idea week look like?” Very rarely do we get asked that day-to-day, especially not from friends, family members, certainly.

So I went off and actually did a diploma in coaching because I thought initially I want to become better at actually getting people to think about the future and think about plans. And in doing that, I ended up wanting to take a bit of a deeper dive into understanding behavior at a higher level. So that led me on to getting my masters. Impacts on clients though is that I became, and me as well, is that I became a far better listener first. So I listened first, I stopped making so many assumptions as I found I had about people. And really, I think that changed the dynamic in terms of me constant, I suppose, dictating to people about what they should be doing. So of course that’s what a good advisor does, isn’t it, is advice. You switch around into actually making sure you’ve got a deep understanding of people’s hopes, fears, goals, dreams, and then ultimately, you can help them better in terms of optimizing their financial plans and wealth.

Mindy Diamond:

Yeah. 100% of what you just said speaks to me in a big way, because that is 100% our philosophy. Most recruiters, I don’t mean it disparagingly, but most recruiters in general are pretty transactional. They see a hammer, they see a nail. So, a recruiter sees a financial advisor and he’s a means to an end to making a deal to a transaction. And our whole approach from day one was never about seeing you, financial advisor, as a transaction, but rather first and foremost, wanting to understand what’s important to you.

And we get told all the time that we were asking questions that nobody ever asked them before. And I want to unpack it more, because I love what you’re saying. The goal as far as I see it is not just to ask a bunch of questions nobody asked before, but it’s to ask questions as a means to an end, to start out by asking questions that make somebody comfortable that tell them that you care about them. Then it’s about asking questions that they’ve never been asked before because the answers to a question like, “How do you see yourself behaving in retirement,” has everything to do with how much money they’ll need to retire. So, one informs the other.

In our world asking somebody, “What are the things that spark you and what are the things that really don’t? And what will you do with this information?” And all those sorts of questions are questions many people had never been asked before, especially if somebody was looking at them as a transaction. And yet, it’s what deepens relationships, it’s what creates trust, and it’s what allows you to identify me as a recruiter, identify the best solution or the best opportunity for someone. So, do you agree with that? Is there anything that I’m off about?

James Woodfall:

No, that’s exactly the point. I think I’m asking better questions as a wealth manager talking to your client. Because ultimately this is, I suppose, one of the things which comes from understanding emotional intelligence, is that for most of us, we make decisions in motion first and then we justify with logic and reasoning, which is basically back to from. If I was to start with logical reasoning and then expect people to make a buying decision.

And so a lot of the time, especially with things like retirement savings, for example, because it’s in the future, it’s over there, especially if it’s 10, 20 years away, people think, “Well, why will I give up so much money a month now for something which is so far in the future that I can’t comprehend it yet?” But if you start reigning the questions in a way which gets to kind of the… Really what you want to uncover is, if you wake up at 3:00 in the morning and you can’t get back to sleep, what’s on your mind? Because if you can uncover that emotion that fits all that kind of pain or problem, then you deal with emotion first and logic second.

Mindy Diamond:

And it tells you what you need to solve for, right?

James Woodfall:

Exactly, yeah.

Mindy Diamond:

If what keeps me up is I’m worried I’m going to outlive my money, and you know that’s your true north in terms of how you begin to tackle that they’re thinking about the future, they want you to focus on the long term. Right? Is that what you get from that? What’s the typical answer you get to that question, that one in particular?

James Woodfall:

For retirement planning, it’s usually clusters around. “Well, I’m not sure I’m making the right decision. There’s lots of options that are complicated. But really, actually, am I going to have enough money? Am I going to run out?” Because it’s the big question, isn’t it? How long are you going to live and how much are you going to need?

Mindy Diamond:

Right. As I was preparing for this interview, I think I know the answer because I’m a person that lives in this world that believes fully in, I don’t have a degree in behavioral finance but I’m big on emotional intelligence, connecting, developing trust, and that I don’t have any right to sell anybody anything or suggest anything unless I’ve connected on an interpersonal level. But I don’t know that everybody believes that. So help us, our listeners to understand, why does this matter to financial advisors?

So, I’m going to give you two examples. I’m a younger advisor that has, say, five to 10 years in the business, say $100 million or 100 million pounds under management and is looking to really build a business. How and why does the concept of emotional intelligence, of EI, matter to me? And then I’m going to ask you the same question again with respect to someone who manages a billion dollars or a billion pounds. How and why does it matter?

James Woodfall:

Yeah. I think probably a starting point is, let’s just clear up I suppose in definitions so that we understand what we’re talking about when we say emotional intelligence, it’s an EQ. Because I suppose let’s think about, let’s call EQ the measurement, and emotional intelligence is the concept. So the definition of emotional intelligence is it’s an ability, and it’s this ability to understand and influence emotions in ourselves and others. So within ourselves, can we perceive and understand our own emotions? What turns them on? What triggers them? Can we do something about that? Can we recognize it, manage it in the right context, or either initiate our emotions in the right context? And can we do that when we’re talking to other people? So, are we good at perceiving people’s emotions within different contexts, and are we good at influencing and utilizing that information to help us communicate more effectively? So, these are skills which requires regard within those two roles to make you effective.

And so, one of the things that we’ve learned from probably 30 years of people studying emotion intelligence is that if emotion is involved within the job role, emotional intelligence correlates with job performance and has a meaningful impact on the difference between an average and a big performer. So regardless of whether it’s one of the two scenarios that you’ve said, performance improvements are always on the table.

But one of the things which tends to happen as you move from, say, up in terms of the money that you’re managing is the stakes get higher. So quite often, you actually need a much far higher degree of self-management, a higher degree of self-awareness, a higher degree of ability to perceive emotions in others, and to be able to communicate with influence. Because quite often as you are dealing with clients who are more affluent, there’s a correlation between actually the skills that your clients have and the skills that they expect you to have as an advisor. So the higher you go up that sort of ladder in terms of value, the more effective you need to be. So that’s where that EQ measurement. If you had to sit down and do an EQ assessment, for example, you need to be scoring way above average the higher up you go.

Mindy Diamond:

How will somebody begin to notice that developing the emotional intelligence muscle, developing the quantity of EQ, how will that begin to show up and impact their business?

James Woodfall:

There’s a couple of ways, and I think it really does show up in self-awareness and self-management and awareness and understanding of others. So one of the things which will show up in terms of that awareness and understanding of others is, can you build trusted relationships quickly? So like those skills that we were talking about before about asking better questions and listening, especially the first time you meet a new prospective client, if you can really turn your ears on and get very, very curious about the person that you’re talking to, rapport building is one of the foundational things for trust building. And really, if you get rapport building right, one of the goals should be to find common ground early, because the minute that you can build a connection with people and you start uncovering things that you’ve got in common, it starts signaling to people that actually you’re someone who is like them, on their side, and that they’re someone that you can trust.

Now people who get this right, they tend to close more clients and they tend to gain more referrals or recommendations to other clients. And when I used to run my business, referrals was the largest source of new clients. Every single year, all the other different marketing streams, they didn’t produce anything near referrals.

And I think back to that, if you look back to the kind of retirement example, if you can really get an answer to that question of, you wake up at 3:00 AM, what’s on your mind, what’s up when you’re getting back to sleep? If you can uncover that and solve that, for a client, it’s far easier to articulate that to a friend than it is for them to explain the technicalities of what you did with their retirement savings. But it’s easier to articulate, “You should absolutely go and see James. We were worried about whether we’re saving enough, he solved that, it’s brilliant, you need to go and see him.” That’s what I mean, is that they’re able to articulate the emotional outcome.

Mindy Diamond:

Even though what we’re talking about here is someone making the case that strengthening one’s emotional intelligence will make you a better advisor, easier to say that, sounds logical. But you’re connecting it to, you’re saying that someone who actually gets this right, gets it better, is going to create more of an instant rapport rooted in trust, and likely grow their business because it makes them more referable. And those are things that certainly every young advisor wants, but every advisor wants.

So, let me switch the tables a second. I get why a young advisor with 100 million wants to get to a billion, why this is really important. They want to do everything they can to really make themselves the most referable. But let’s take the advisor that’s on the back nine that has been doing this 30 years, manages a billion and a half of pounds, dollars in assets under management, is growing by referrals and it’s an organic referral stream. It’s a business that feeds itself. So, while everybody always needs to be in business development mode, they feel like they’ve cracked the code, they’ve got it covered. How and why does this concept impact a senior advisor, someone with a much bigger, more robust book of business?

James Woodfall:

Yeah, it’s interesting. So if we take a bit of a step back and look at a bit about what some of the research says about the impacts of emotional intelligence, there have been some studies done within financial services about the impact of your training on business outcomes.

So there was a study done probably around about between 2000 and 2004 with Ameriprise, and they brought their agents through a year-long emotional intelligence development program. And it was interesting, they measured at the beginning of the program EQ, what someone’s EQ score was, but they measured things like health, anger, trade anger. So, how often were people experiencing anger, stress, and burnout. So they’re measuring all sorts of things other than EQ just to see what the impact of EQ training was. Now EQ scores went up, sales went up, I think on average of about 24% across four cohorts. But things like stress, burnout, health outcomes, perceived health outcomes, people are asked to rate, how would you rate your health, that went up. Experience of anger went down because people become better at managing it.

So as you look at the kind of example that you described, I would say that as someone who’s in that stage of the career where they may not have the capacity to take on more clients. So just think, well, actually, I don’t want an uplift of 20%, 24% in sales because I might not process that. But one of the things which I suppose the EI research shows actually is that it impacts your quality of life.

And there is finding which is quite common in research, is that actually EI scores correlate with age. So as we go through life and we have sort of ups, downs, highs, lows, and we learn from those. We learn from our emotional experience, and that’s hypothesis, is it feeds into our EQ score. So you’ve probably got people at that later stage of their career who actually probably have had experience which has developed their emotional intelligence. They’ve got mature standing, which means that they might not necessarily need to go out and find new clients. They’ve got experience, which has helped them develop client relationships, but they might want to take a step back at quality of life. If they’re experiencing stress, burnout, pressure, EQ can help absolutely with all of those.

The other thing which is quite common as well is that if they’re playing any sort of leadership part within that business now, let’s say if they’re a business owner, EQ absolutely is key for leadership performance. So making sure that you’re building a team of people around you, you can help you develop the business. And actually, EI and leadership’s one of the biggest areas where research has been focused.

But I think one of the other things I’ve got to say is that we’ve all got blind spots. It doesn’t matter where we are in life, we’ve all got things that I suppose that we could be better at. And actually shining a lens on those and improving our self-awareness is something that you can develop at all stages.

Mindy Diamond:

A lot of people in our industry, whether it be a recruiter or an advisor themselves, believe that efficiency or being most effective and efficient is the true north. And that to ask what may fee like unnecessary or ancillary questions that don’t directly get to help me to figure out what your asset allocation is so that I can grow your portfolio, may feel ancillary. And so, is that one of the most common objections you get when somebody, say, comes to you and they’re thinking about retaining you and they’re wondering what the benefit is?

James Woodfall:

Well, I think the people in firms I tend to talk to, there’s a couple of common things that are coming to mind now. One is pressure around fees. So, how can I make sure I’m articulating my value in a time where clients are more informed, they can go on AI and they come to meetings prepared with answers, and they’re challenging back around the value that advisors can provide. So getting back, I suppose, and the answer is funnily enough, is actually if you’ve designed your service around a proposition which makes yourself easy to replace by someone else who can do it for the same or cheaper price with a promise of better performance, or even in the years coming, a robo-advisor, it’s going to be challenging to retain and grow clients. But I’m not particularly worried about AI.

The other types of firms that come to me is to say, “Look, we’ve identified actually that we need to think differently about our business model, what we do and who we serve, because it’s going to be easier than it’s ever been for clients to come up to do some of these things themselves.” But absolutely what is untouchable, I think, is this ability to create a human connection, to sit down and discuss a range of different options. “Do I do X, do I do Y? What are the trade-offs if I choose that over that?” And to uncover those things which, as I said, really keep people up at night and solve for them. I think it’s going to be quite hard to replicate that digitally.

Mindy Diamond:

So I want to get to a end that you hit the nail on the head, and I want to delve deeper into it. Whatever the advisor is looking for, they may not worry about pressure around fees, they may not be kept up at night. They have a practice or a business that’s worked well all these years and is growing organically and it’s more than good enough. But anybody who isn’t concerned about the potential impact of AI on their business and whether they’re a financial advisor or recruiter or anybody else, is living under a rock. So, the goal for everyone should be to make yourself untouchable. And you hit it on the head, it’s the ability to create human connection.

So, I want to ask you something. It occurs to me, you talk a lot about learning to ask the right questions. In some cases, the questions that a client never been asked before makes sense to me. But I think the real skill, I mean, I imagine anybody can teach you a list of questions to ask. The real skill comes in is knowing what to do with that information.

So, let’s assume that someone says an advisor says you ask that smart question, “What keeps you up at night? What do you think about at 3:00 AM?” Pressure around fees. I find people, clients asking me, prospects asking me all the time what sort of value I can add, whether it be in the land of AI or competitively, whatever it is, pressure around fees. What do you do? So you’ve asked the smart question, but what do you teach? What do you do with that information?

James Woodfall:

It’s a mindset, I think, because having just say a list of questions I don’t think is really helpful to any advisor when you’re training them. And yet I find I do get people who, okay, say, “Well, look, what questions should we ask? Have you got a list of questions that you would ask?” I hold back giving those out because I think that, well, that’s what I would say. It’s not necessarily going to land the same way if you say it.

The mindset I’m trying to teach advisor is to adopt a curious mindset. So not asking questions for question’s sake, but if I’m talking to someone, what I want to do is I want to understand, how are you thinking? How do you see the problem? What assumptions are you making? What things do you believe which maybe don’t line up with how things are in reality, or goals, objectives, or whatever it is. So I’m trying to understand how you think, and that requires not asking questions off a list of great questions to ask, comes off of understanding the format for that, is utilizing the open questions to gather information, to check assumptions that might sit behind them, because actually understanding those assumptions is really, really useful. And to then summarize and play back to someone that you’re talking to so that you can demonstrate that you’re listening and you deeply understand them, and being able to summarize and be able to succinctly put their words into a, “Well, what do we do next about this?”

Mindy Diamond:

Yeah, and, why does it matter? I love that because what I always say is it’s art, not science. AI could give you a list of, if I put in the topic of emotional intelligence and give me a list of 10 smart questions to ask relative to X. One of the questions I would ask someone from an emotional perspective that demonstrates I have strong emotional perspective relative to pressure around fees, AI could spit out the questions. But I think you’re 100% right. The real key is being a good listener and meeting someone where they are. And it’s not about a prescribed or canned list of questions that demonstrate you have strong emotional intelligence. It’s much more about asking the right next question, saying the right thing, the validating statement afterwards. And not as a means to an end, not as a means to a transaction, not as just a way of checking the box, I have emotional intelligence, but really because demonstrating that you deeply care. And I like what you said, the notion of a changed mindset. Do people get that right away?

I guess what I’m asking is, financial advisors, while smart ones who are looking to make themselves untouchable by AI will get that concept. They’re looking to differentiate themselves and they’re looking to hone the skills that AI can’t bring to the table. But at the same time, financial advisors are number oriented and goal oriented. And so, how long does it typically take to begin to see, or how do you paint the picture about getting from here to there, connecting the dots between strengthening changing your mindset, strengthening your emotional intelligence, and seeing more results?

James Woodfall:

Well, look, it’s about behavior change, isn’t it? Like any kind of behavior change, there has to be a few things at play. One is that you have to have a good understanding of where you are right now, what things that you are good at, but what things you need to work on. And then effectively the things you need to work on, you need a plan of how you’re going to work on them. So I think commonly how you develop these kind of relational skills is that you need to be able to get close to, what does the goal look like? Where am I headed? If I get this right, what’s it going to look like?

And then you need to have a plan to get from A to B. And actually part of that plan has to be built around good feedback. And I was quite lucky where during my career, I worked for two large banks before I started my firm. And I had really, really good training from managers that I worked with, almost on a monthly basis would come and sit in my client meetings and then feedback to me about what I could have done better.

And so actually, if you’re going to really commit to developing, I suppose relational skills and becoming more emotionally intelligent, you need help from someone within your firm or externally to come in and actually observe you by trying out new things and giving you feedback. Now of course, you could do some of that yourself if you’re doing a virtual meeting, you could hit record, play it back, be your own analyst. But quite often we can’t see that ourselves, but if you’ve got say a third party, they can watch you in action. Quite quickly they can hone in and say, “Well, actually, you could have asked a different question here, or actually if you’d phrased that like this, you might’ve got a bit more information, or the client closed down when you ask that question.” So actually then, you start to create that behavior change.

So feedback I think is one thing, but actually aligning it with really, values, I think. So, one of the things that I suppose is quite important for behavior change is that we are motivated to do things where we strongly believe it’s the right thing to do. So, I think which is why it can be quite difficult for a firm to bring in with a team of advisors and say, “Well, we’re going to roll out emotional intelligence training,” because you’ll get some of us go, “This is brilliant.”

Mindy Diamond:

Eye roll. I would imagine eye roll is the… It can be a lot of the response, right?

James Woodfall:

You get a lot of resistance, because some people see it as a criticism of just saying, “Well, actually I’m good at that. I don’t need training in that, thank you very much.”

Mindy Diamond:

And because if efficiency in getting to a goal is the true north, I mean, I think the mindset shift you’re talking about is going from believing that getting to the goal by just asking the right numbers and dealing in data, changing that from it’s about building a relationship, which ultimately will impact the amount you manage and how you grow and how you connect and all of that stuff. But for people that are goal-oriented, linear in their thinking, I imagine this can be not just felt as a criticism but hard to embrace.

James Woodfall:

Oh, yeah, no. I think we view the brain as kind of a black box. I do get people I speak to, they go, “Mental health isn’t real. And all of this is psychobabble,” but from the people that I’ve had feedback from, and this is even for people I haven’t trained. I wrote a book about 18 months ago about the topic which talks about emotion intelligence within the 5X context. I’ve had people contact me on LinkedIn and say, “Look, I read your book. I’ve been following your content for a while. I’ve put some of the ideas to work, and I’m now getting my manager and their manager contact me and saying, ‘What are you doing differently?’” Because all of a sudden they’re opening up conversations with clients that they couldn’t before, doing business with clients where they couldn’t before. And all it is that this kind of focus on the client, the relationship, building that connection, and all of a sudden you start seeing that convert into more sales opportunities.

Mindy Diamond:

Yes and more yes, because that’s always been our philosophy, my philosophy from starting the business and our philosophy, and I couldn’t agree with you more. You articulated it probably as did, I got to it instinctively. You have research behind it, etc. By the way, for our listeners, we will link your book in the notes for this episode if anybody’s interested in buying it. But you hit the nail on the head, so, or you took the words out of my mouth in terms of next question. Who are your clients? Are they individual advisors? Are they independent RIAs? Are they Morgan Stanley and Merrill Lynch? And what kind of work do you do for them?

James Woodfall:

So, I do, there’s probably two parts to my business. One is the consulting training part, which is going into firms, typically firms that were the owner managed typically, where the owner either is still advising or has a big impact on other behaviors of the advice team that’s underneath them. And really, I work on a consultancy basis. So rather than going and just provide EI training, what I do is effectively start with understanding the business.

So exactly as I’ve been talking to you about, the process I used to follow as an advisor, it’s the same process I follow when I’m working with practices, is I want to find out what’s going well in the business. Where are the blockers, what’s not going so well? And I’m a social science researcher. So I’d want to spend some time in the business actually doing a bit of a deep dive and maybe speaking to the team while the owner’s not in the room and finding out a bit about how they’re seeing things. Because ultimately, what that will do is it allows me to look at thematically extracting what types of training interventions might move the needle within the business.

And then I put that onto a report for businesses and say, “Look, this is what I think we should be doing.” Some of that might be me working one-to-one, doing that coaching, observing, training with particular people in the business who have been highlighted as requiring development, or it might be group training, might be taking the whole teams through a training program. And then following up, helping build those development plans, and then being there supporting with the one-to-ones as they bed in that behavior change. So, that’s one part of the business.

The other part of the business is working for the larger firms. I’ve done a bit of work for Fidelity this year and last year, and they’re looking to hire me as an authority expert on the topic to put together training programs that go out to the advisors that they work with. So, there’s the two aspects, like an external speaker trainer that’s brought in by some of the larger companies. And then the other one is a bit more hands-on, applying not only the science but my experience of having been there and run a business.

Mindy Diamond:

Right. So are the big firms like… So you mentioned Fidelity, are the wirehouses, Merrill, Morgan, UBS, Wells Fargo, are they embracing this? Are the big banks embracing it, or is this largely in the RIA space right now?

James Woodfall:

In the UK, there’s been a huge kind of interest in emotional intelligence, behavioral finance, relational skills. And actually, a lot of the kind of people who require influential in the UK are actually based in the US. And so, I think there’s a good bit of crossover. We’ve got good people who are specialists in looking at the retirement piece from a retirement transition about, how do you support people through what is a profound psychological transition? So, I think the RIAs are really interested in it as a topic.

Then we’ve got the larger institutions are interested in it either as the RIAs are clients of theirs and they want to be seen to providing thought leadership to the RIAs and helping them develop these skills. But also, we’ve got some quite large companies in the UK now here, like the banks, for example, the banks or the whole exited the advice market in around about 2012, 2013, and then this year they’re starting to come back. So they’ve had 15 years nearly out of the market and they’re coming back because they’re just wanting an opportunity for face-to-face advice. So, I think actually it’s a hot topic now and I think all segments of the market are looking at, how do they develop non-technical skills to help them succeed in the future?

Mindy Diamond:

Can someone who was not born with strong EQ, can they learn this?

James Woodfall:

Absolutely. One of the interesting things about EQ is it’s not like IQ, for example. IQ is our a sort of cognitive ability. There was some good research that was done probably about, I think 2016, which looked at, do you remember all this sort of brain training apps like, if you do Sudoku, do you get smarter? You get better at Sudoku, but it doesn’t translate into performance on another. You don’t get better at crosswords from doing Sudoku, for example. So, IQs are pretty much fixed and there’s not a lot we can do about that. But EQ has been shown to be a trainable ability. So regardless of where you are now, if you understand your strengths and weaknesses and put a plan together for improvement, everyone has the ability to improve their EQ.

And it’s not like personality, for example, where it’s quite hard to shift the dial. Let’s say if you’re quite strongly introverted and you find social situations difficult, if you just took that approach and said, “Well, look, can we make you extremely extroverted?” The answer would be, well, probably not. But EQ absolutely helps that person because noticing that you feel uncomfortable in, say, a networking situation if you have to do that professionally, having the tools in the bag to manage that feeling and throw yourself into the experience, that’s EQ in action. So, it doesn’t matter your baseline of where you are, EQ can have a big impact on your ability to perform across a range of different contexts, home, work, with friends.

Mindy Diamond:

Yeah. Let’s talk about your comment that EQ or strong emotional intelligence is what can make an advisor untouchable by AI. And I assume the premise being that, I can’t replace a human relationship. It may be able to come up with the questions, but at least for today it lacks the ability to know what to do with that information and to create the human connection. Talk to me more about that. How and why is that? I mean, is that part of why people are coming to you, because they’re worried about AI encroaching on their business?

James Woodfall:

Where we are at the moment is actually AI… Let’s look at healthcare for a second. Chatbots in healthcare have actually been outperforming humans in some respects. So there’s a type of therapy called cognitive behavior therapy, that’s been run with AI agents and patients. And as researchers to show that actually, disclosure has increased when patients are speaking to a chatbot because cognitive behavior therapy is like it’s guided, is a method, it’s a methodology to it. But disclosure increases and this theory behind that is is that people open up more when they don’t feel like they’re being judged by another person. So that’s interesting, because that saying to us, “Well, actually, people are trusting AI agents with very, very personal information, and people are already getting that feeling of empathy with AI agents.” Because if you tell an AI agent something deeply personal and it says, “That must have been really difficult for you,” for example.

Mindy Diamond:

Yeah, it does that well. Wonderful feedback about how great you are or what a smart question you just asked.

James Woodfall:

Yeah, but it’s synthetic, it’s not real empathy, it’s synthetic empathy. Whilst we might feel actually we get that feeling that we’re being understood, it’s not real. And I think the advisor’s edge is, look, I think where we might end up with this is that if you take a step back and you do this kind of exercise of what’s my ideal client, the ideal client is, I think, now is someone who is still time poor. So yes, an AI agent might be able to interview you, build a financial plan, but do you really want to spend the time doing that or do you have any inclination to do that? No. Well, that’s a perfect client who would hire an advisor. They value human relationships.

Obviously when we do get AI entering the advisor market, it’s going to be at a lower price point. So actually, we’re now talking about a difference between experience. So the experience of being with an advisor comes at a premium. So that experience is going to be what people are going to pay additional value for. So, it’s the experience of dealing with a human. It’s the experience of dealing with a human who can talk them through complex information and options, help them understand their thinking and apply judgment, connect with those emotional things. But there’s a whole range of information that we get when we’re talking face-to-face, which AI doesn’t have access to.

So back to that retirement example, if we say, “Well, man, I’ve modeled your plan. If we do X, Y, and Z, you’re not going to run out of money when you retire. You’re going to be okay.” And then the person, usually what they do is they sigh with relief, which is actually the emotion of joy, relief is actually happiness. So that sigh of relief and the softening of muscle tension in the body that you see when you’re face-to-face with another person, AI can’t, doesn’t get that data.

Mindy Diamond:

And how powerful is that? So, why does that matter? If I say, “I have X, I need Y. I have X number of years until I retire. Will I have enough money to retire the way I want to?” AI can spit that answer out faster than any financial advisor and come back hopefully saying, “Yes,” they’ll know that I will experience relief and joy because I’ll write back saying, “Great news.” It’ll say, “Yes, that is fabulous news.” It’ll tell me why I’m relieved and all that sort of stuff. So, why does that matter?

James Woodfall:

I think fundamentally, it comes back to trust. For those people who can get that quick answer, they’ll go, “Yeah, that’s great.” But there’ll be some people who go, “Yeah, fine. I’ll take that answer at face value.” There’ll be other people who go, “Well, what if you made a mistake?” Quite interesting that actually, people will get the same answer from a human advisor and they’ll trust it more. And I think one of those things is because we’re wired for connection, so when empathy develops, it’s quite interesting.

Something which you see in young children, for example, is when we develop at the very early stage, probably about three or four years old, before children have learned to self-regulate their emotions, you see emotional contagion in groups of children happen quite rapidly. You get one child who say gets a toy taken away from them and starts crying, and then all the other children at the same age in the nursery start crying. Now, none of those other ones are crying because they’re sad. They’re crying because we have these things called mirror neurons, which means we pick up and mirror the emotional state of people around us. So, you actually get an experience of shared feeling and especially if you’ve got strong rapport, strong relationship, you actually share emotions of the people around you. Now, of course, as we grow out of that developmental stage, we learn this ability to understand that actually what we’re feeling isn’t happening to us, it’s happening to someone else.

But have you ever been around… My favorite example for this is, if my wife has had a bad day at work because she comes home and starts slamming the door and banging cupboards, why I start to feel anger, because it’s rubbing off, it’s in the room. So, it’s this shared understanding that I think is where the value is. And so absolutely the answer might be faster and quicker, but for some clients they value that experience of having that answer delivered by someone who understands them.

Mindy Diamond:

And I think, so the point is that there will be clients or prospects that will value the efficiency of AI, that don’t necessarily need the face-to-face, that don’t necessarily… They just want the answer. They want the answers to the test, they don’t care how you got there. But what you’re talking about is finding the clients that really value the human connection. And if that’s what in fact is going to make advisors untouchable, then they need to make sure that they really strengthen this skill.

James Woodfall:

It’s not just the answer, but it’s the whole experience that’s wrapped around that. So actually last year, and my wife took me to a restaurant and we had a lovely, lovely meal. And on the menu there was this cup of coffee and the beans were like one of the rarest beans in the world. They’re the ones that get eaten by this little animal with the jungle in it, poops them out, and then the beans get roasted. But it was about 40 pounds for this cup of coffee and I thought, well, I’m going to have that. But that’s the experience, isn’t it? I could get a cup of coffee at McDonald’s, but actually the experience of this, something which is rare, exclusive, delivered in an amazing environment, that’s what you’re paying for.

So, you’ve got to remember that actually if experience dictates a lot of what we value as well. So because if all of our decisions were made on price, Ferrari wouldn’t have a business because everyone would just be buying the cheapest car that does the job. You’re going to think advisors that are going to operating in this space, well, they need to think about the whole package, as in the experience that the plan that’s delivered, and the advice.

Mindy Diamond:

But it speaks to the notion of any advisor that isn’t thinking about AI’s impact on his business and how to reshape or rewire the business, even just rewiring the value proposition, retooling their value proposition, how they explain their value and what they do needs to change because they’re competing not only with the advisor that sits next to them or down the hall, but they’re competing with AI. How about as AI, as you see AI develop? So fast-forward five years, you and I are talking about where AI is today, but AI is, God knows where it’ll be five years from now. So, how do you foresee, do you still foresee the advisor being untouchable if they get this right, five or 10 years from now?

James Woodfall:

I don’t think it’s financial advice that’s unique with this, because I think it’s any profession where at the moment human judgment and understanding are valued. Healthcare, for example, same thing, doctors follow consultancy process. You’ve got this like tax, legal, a whole range of professions which are all grappling on the same problem.

So I think in five years time, I think the answer is, is that we just don’t know what AI will look like. But certainly in the moment, if you track what Claude are doing with code work, and what Perplexity is doing with its skills and add-ons, a lot of it is actually at the moment geared up to freeing up the advisor’s time so that they can spend more time with clients. So, I think at the moment this sort of trend is looking like AI companies want to support advisors to be way more efficient so that they can deal with more clients. But in five years time, who knows?

I think probably one of the biggest leaps that will happen is when AI is no longer working from, say, just a transcript. If it gets out to that kind of chat where you can actually interact with an AI agent like you and I are talking, I think that’s going to provide a different experience, because then you’re moving it from, as I said, that kind of structure where somebody is stuck there tapping away at keyboard, having a conversation with a chatbot, effectively, to actually having a conversation with an embodied agent with a face, gestures, a voice. That I think will start to change things a little bit.

Mindy Diamond:

Yeah. Well, it will be an interesting future, for sure.

This has been a fascinating conversation. I really enjoyed it, and thank you so much for sharing so graciously. Is there anything to wrap up that I didn’t ask you, that you would want an advisor to know about this concept or anything you’re thinking about?

James Woodfall:

I think we’ve taken a broad sweep and then a deep dive into certain areas. I think really probably have to get started. I think probably one of the… I mean, you mentioned obviously I’ve got a book that you share the links to, which is fantastic. Audiobook is available to that as well on Spotify or wherever audiobooks are listed. I think there’s a lot of good advice in that about how to get started. So, I think for people who are looking at covering that next step of, what do we do, it’d be, yeah, pick up a book and have a bit of a deep dive. If you want to skip the book and come straight to having a conversation with me, then I write a weekly email, which goes out once a week, which is just one topic. So very much like we’ve been talking today, I share ideas on that once a week, or on LinkedIn, I’m around on LinkedIn as well.

Mindy Diamond:

Good. Well, we will link all of it so everyone knows how to find you. Thank you again for being so gracious. Love the topic, love the work that you’re doing, love that there’s a need for it, and can’t wait to see where you go from here.

James Woodfall:

Brilliant. No, I enjoyed it. Thank you.

Mindy Diamond:

Thank you.

As a financial advisor, you hold yourself to the highest standards of integrity, honesty, and credibility. You are successful because you take your professional responsibility seriously, and are dedicated to your clients. But are you living your best business life? Are your goals aligned with your firms or could a better option exist? Should I Stay or Should I Go? Is a book written with you in mind? It’s a self-guided journey that walks you through the key steps that we take with our advisor clients. This strategic thought process and roadmap to professional self-discovery is designed to help you ask the right questions and think critically and objectively, whether you’re considering change or not. Learn how to get your copy at diamond-consultants.com/thebook.

Emotional Intelligence: The “Untouchable” Differentiator in an AI World

A conversation with Mindy Diamond and James Woodfall, Communication and Behavior Specialist at Raise Your EI.     

Mindy Diamond:

Welcome to the latest episode of our podcast series for financial advisors. Today’s episode is Emotional Intelligence: The “Untouchable” Differentiator in an AI World. It’s a conversation with James Woodfall, Communication and Behavior Specialist from Raise Your EI. I’m Mindy Diamond, and this is the Diamond Podcast for Financial Advisors.

At Diamond Consultants, we help elite advisors identify the right environment for their businesses to thrive, whether that’s at a wirehouse, boutique, or independent firm. With nearly three decades of experience, we’ve guided thousands of advisors and represented more than a quarter of a trillion dollars in assets transitioned. And each year, one in four advisors managing a billion dollars or more who change firms are our clients. Our process is education driven and based on building relationships, starting as your strategic partner well before you’re even thinking of a move. To schedule a confidential conversation, call us at (908) 879-1002.

Wondering why advisors change firms and where they’re headed? Are transition deals going up or down? Those very questions and more inspired us to create our Annual Advisor Transition Report. It’s the award-winning, data-driven resource designed for advisors that connects the dots between the motivations around movement and the firm’s appetite for top talent. Arm yourself with the knowledge you need to make smart decisions. Download your copy at diamond-consultants.com/transitionreport.

For years, advisors have competed on expertise, the ability to solve problems, deliver answers, and provide guidance clients couldn’t easily find on their own. But today, those answers are becoming easier to access via artificial intelligence and tools like ChatGPT, Claude, and Perplexity. AI can generate planning ideas, summarize complex topics, and answer questions in seconds. As the technology continues to improve, it raises an important question. If information becomes increasingly commoditized, what will clients continue to value most?

My guest today, James Woodfall, is the Founder of the training firm, Raise Your EI, and a former wealth management business owner. James now helps advisors, leaders, and organizations strengthen the communication and behavioral skills that drive trust, influence, and performance. Skills rooted in emotional intelligence or EI, something that AI cannot authentically replicate. What’s interesting about James’s perspective is that he doesn’t view emotional intelligence as a soft skill. He views it as a business skill, one that impacts how advisors build rapport, earn referrals, lead teams, deepen client relationships, and ultimately differentiate themselves in an increasingly competitive marketplace that includes human and machine-driven advice.

Our conversation explores why rapport is the foundation of trust, how emotional intelligence can be developed like any other professional skill, and why advisors who learn to create authentic human connection may be best positioned to thrive alongside AI, not compete against it. Or as James puts it, remain untouchable in the face of a changing world. Because while technology may continue to reshape how advice is delivered, the experience of being understood, trusted, and guided by another human being remains remarkably difficult to replicate. So, let’s get to it.

James, thank you for joining me today, especially coming all the way from the UK. I’m grateful.

James Woodfall:

Thanks for having me on.

Mindy Diamond:

So, let’s start at the beginning. You’re a different kind of guest for us, and a topic that is near and dear to my heart because I’m always all about emotional intelligence and EQ, but it’s a topic that sometimes can feel a little squishy to some folks. So, tell us a little bit about your background and really how you got into the world of wealth management.

James Woodfall:

I got into wealth management probably was by accident while I was, I think about 19 years old. I got a job at a bank because I was living with different jobs and it was the first company that would take me. So I ended up working in a bank as a cashier in a branch.

And then after a series of different career moves, I ended up running my own wealth management firm for about nine years, which I sold about three and a half years ago. Around the time that I was selling it, I did my first master’s degree in communication and behavior analysis, and that’s when I started taking a bit of a deep dive into understanding emotional intelligence and behavior and communication. But really, I started that journey before I sold my wealth management company, and really the goal was, how can I become a better financial advisor to my clients by having a better understanding of their psychology behavior around money so that I could communicate with them more effectively, help them build their plans? So I had a bit of a… like a lot of people I speak to in wealth management, they fell into it.

Mindy Diamond:

So, a lot to unpack there and I’m fascinated by your story. Tell us a little bit about how you began to use or leverage emotional intelligence. You say you got into it or were fascinated by it because it was a way of helping your clients. So, talk to us a little bit about that. How did you begin to see the impact long before you started this business?

James Woodfall:

So going back a couple of steps to that. When I started the business, it was very transactional. You’d sit down with the client, you find out about what sort of assets they have, what type of plans they have already, and you look for gaps where you can optimize things, or there was a product which they need which you didn’t have. But I moved away from that type of service to a financial planning led service. So, where actually before we get talking about, well, how do we structure your world? We spend a lot of time building a plan in cashflow modeling software. So the one that I used was over at a company called Voyant, and effectively I build a cashflow plan for the clients, which would map out based on assumptions of what age they would reach financial independence. And then that then would then move on to, how to we optimize your holdings?

Now what occurred to me pretty quickly in offering that service is that the outputs from that type of exercise are only as good as the inputs. So you’re really relying on the client to be able to come up with the answers to the questions that you ask them to make the financial plan work. And in my experience, quite a lot of the time you sit down with these people and you ask them, “Imagine you’re retired, what does an ideal week look like for you?” So, what I realized is actually I was asking clients a lot of questions which no one had ever asked them before, such as, “If you go retire, imagine you’re retired tomorrow, what does your idea week look like?” Very rarely do we get asked that day-to-day, especially not from friends, family members, certainly.

So I went off and actually did a diploma in coaching because I thought initially I want to become better at actually getting people to think about the future and think about plans. And in doing that, I ended up wanting to take a bit of a deeper dive into understanding behavior at a higher level. So that led me on to getting my masters. Impacts on clients though is that I became, and me as well, is that I became a far better listener first. So I listened first, I stopped making so many assumptions as I found I had about people. And really, I think that changed the dynamic in terms of me constant, I suppose, dictating to people about what they should be doing. So of course that’s what a good advisor does, isn’t it, is advice. You switch around into actually making sure you’ve got a deep understanding of people’s hopes, fears, goals, dreams, and then ultimately, you can help them better in terms of optimizing their financial plans and wealth.

Mindy Diamond:

Yeah. 100% of what you just said speaks to me in a big way, because that is 100% our philosophy. Most recruiters, I don’t mean it disparagingly, but most recruiters in general are pretty transactional. They see a hammer, they see a nail. So, a recruiter sees a financial advisor and he’s a means to an end to making a deal to a transaction. And our whole approach from day one was never about seeing you, financial advisor, as a transaction, but rather first and foremost, wanting to understand what’s important to you.

And we get told all the time that we were asking questions that nobody ever asked them before. And I want to unpack it more, because I love what you’re saying. The goal as far as I see it is not just to ask a bunch of questions nobody asked before, but it’s to ask questions as a means to an end, to start out by asking questions that make somebody comfortable that tell them that you care about them. Then it’s about asking questions that they’ve never been asked before because the answers to a question like, “How do you see yourself behaving in retirement,” has everything to do with how much money they’ll need to retire. So, one informs the other.

In our world asking somebody, “What are the things that spark you and what are the things that really don’t? And what will you do with this information?” And all those sorts of questions are questions many people had never been asked before, especially if somebody was looking at them as a transaction. And yet, it’s what deepens relationships, it’s what creates trust, and it’s what allows you to identify me as a recruiter, identify the best solution or the best opportunity for someone. So, do you agree with that? Is there anything that I’m off about?

James Woodfall:

No, that’s exactly the point. I think I’m asking better questions as a wealth manager talking to your client. Because ultimately this is, I suppose, one of the things which comes from understanding emotional intelligence, is that for most of us, we make decisions in motion first and then we justify with logic and reasoning, which is basically back to from. If I was to start with logical reasoning and then expect people to make a buying decision.

And so a lot of the time, especially with things like retirement savings, for example, because it’s in the future, it’s over there, especially if it’s 10, 20 years away, people think, “Well, why will I give up so much money a month now for something which is so far in the future that I can’t comprehend it yet?” But if you start reigning the questions in a way which gets to kind of the… Really what you want to uncover is, if you wake up at 3:00 in the morning and you can’t get back to sleep, what’s on your mind? Because if you can uncover that emotion that fits all that kind of pain or problem, then you deal with emotion first and logic second.

Mindy Diamond:

And it tells you what you need to solve for, right?

James Woodfall:

Exactly, yeah.

Mindy Diamond:

If what keeps me up is I’m worried I’m going to outlive my money, and you know that’s your true north in terms of how you begin to tackle that they’re thinking about the future, they want you to focus on the long term. Right? Is that what you get from that? What’s the typical answer you get to that question, that one in particular?

James Woodfall:

For retirement planning, it’s usually clusters around. “Well, I’m not sure I’m making the right decision. There’s lots of options that are complicated. But really, actually, am I going to have enough money? Am I going to run out?” Because it’s the big question, isn’t it? How long are you going to live and how much are you going to need?

Mindy Diamond:

Right. As I was preparing for this interview, I think I know the answer because I’m a person that lives in this world that believes fully in, I don’t have a degree in behavioral finance but I’m big on emotional intelligence, connecting, developing trust, and that I don’t have any right to sell anybody anything or suggest anything unless I’ve connected on an interpersonal level. But I don’t know that everybody believes that. So help us, our listeners to understand, why does this matter to financial advisors?

So, I’m going to give you two examples. I’m a younger advisor that has, say, five to 10 years in the business, say $100 million or 100 million pounds under management and is looking to really build a business. How and why does the concept of emotional intelligence, of EI, matter to me? And then I’m going to ask you the same question again with respect to someone who manages a billion dollars or a billion pounds. How and why does it matter?

James Woodfall:

Yeah. I think probably a starting point is, let’s just clear up I suppose in definitions so that we understand what we’re talking about when we say emotional intelligence, it’s an EQ. Because I suppose let’s think about, let’s call EQ the measurement, and emotional intelligence is the concept. So the definition of emotional intelligence is it’s an ability, and it’s this ability to understand and influence emotions in ourselves and others. So within ourselves, can we perceive and understand our own emotions? What turns them on? What triggers them? Can we do something about that? Can we recognize it, manage it in the right context, or either initiate our emotions in the right context? And can we do that when we’re talking to other people? So, are we good at perceiving people’s emotions within different contexts, and are we good at influencing and utilizing that information to help us communicate more effectively? So, these are skills which requires regard within those two roles to make you effective.

And so, one of the things that we’ve learned from probably 30 years of people studying emotion intelligence is that if emotion is involved within the job role, emotional intelligence correlates with job performance and has a meaningful impact on the difference between an average and a big performer. So regardless of whether it’s one of the two scenarios that you’ve said, performance improvements are always on the table.

But one of the things which tends to happen as you move from, say, up in terms of the money that you’re managing is the stakes get higher. So quite often, you actually need a much far higher degree of self-management, a higher degree of self-awareness, a higher degree of ability to perceive emotions in others, and to be able to communicate with influence. Because quite often as you are dealing with clients who are more affluent, there’s a correlation between actually the skills that your clients have and the skills that they expect you to have as an advisor. So the higher you go up that sort of ladder in terms of value, the more effective you need to be. So that’s where that EQ measurement. If you had to sit down and do an EQ assessment, for example, you need to be scoring way above average the higher up you go.

Mindy Diamond:

How will somebody begin to notice that developing the emotional intelligence muscle, developing the quantity of EQ, how will that begin to show up and impact their business?

James Woodfall:

There’s a couple of ways, and I think it really does show up in self-awareness and self-management and awareness and understanding of others. So one of the things which will show up in terms of that awareness and understanding of others is, can you build trusted relationships quickly? So like those skills that we were talking about before about asking better questions and listening, especially the first time you meet a new prospective client, if you can really turn your ears on and get very, very curious about the person that you’re talking to, rapport building is one of the foundational things for trust building. And really, if you get rapport building right, one of the goals should be to find common ground early, because the minute that you can build a connection with people and you start uncovering things that you’ve got in common, it starts signaling to people that actually you’re someone who is like them, on their side, and that they’re someone that you can trust.

Now people who get this right, they tend to close more clients and they tend to gain more referrals or recommendations to other clients. And when I used to run my business, referrals was the largest source of new clients. Every single year, all the other different marketing streams, they didn’t produce anything near referrals.

And I think back to that, if you look back to the kind of retirement example, if you can really get an answer to that question of, you wake up at 3:00 AM, what’s on your mind, what’s up when you’re getting back to sleep? If you can uncover that and solve that, for a client, it’s far easier to articulate that to a friend than it is for them to explain the technicalities of what you did with their retirement savings. But it’s easier to articulate, “You should absolutely go and see James. We were worried about whether we’re saving enough, he solved that, it’s brilliant, you need to go and see him.” That’s what I mean, is that they’re able to articulate the emotional outcome.

Mindy Diamond:

Even though what we’re talking about here is someone making the case that strengthening one’s emotional intelligence will make you a better advisor, easier to say that, sounds logical. But you’re connecting it to, you’re saying that someone who actually gets this right, gets it better, is going to create more of an instant rapport rooted in trust, and likely grow their business because it makes them more referable. And those are things that certainly every young advisor wants, but every advisor wants.

So, let me switch the tables a second. I get why a young advisor with 100 million wants to get to a billion, why this is really important. They want to do everything they can to really make themselves the most referable. But let’s take the advisor that’s on the back nine that has been doing this 30 years, manages a billion and a half of pounds, dollars in assets under management, is growing by referrals and it’s an organic referral stream. It’s a business that feeds itself. So, while everybody always needs to be in business development mode, they feel like they’ve cracked the code, they’ve got it covered. How and why does this concept impact a senior advisor, someone with a much bigger, more robust book of business?

James Woodfall:

Yeah, it’s interesting. So if we take a bit of a step back and look at a bit about what some of the research says about the impacts of emotional intelligence, there have been some studies done within financial services about the impact of your training on business outcomes.

So there was a study done probably around about between 2000 and 2004 with Ameriprise, and they brought their agents through a year-long emotional intelligence development program. And it was interesting, they measured at the beginning of the program EQ, what someone’s EQ score was, but they measured things like health, anger, trade anger. So, how often were people experiencing anger, stress, and burnout. So they’re measuring all sorts of things other than EQ just to see what the impact of EQ training was. Now EQ scores went up, sales went up, I think on average of about 24% across four cohorts. But things like stress, burnout, health outcomes, perceived health outcomes, people are asked to rate, how would you rate your health, that went up. Experience of anger went down because people become better at managing it.

So as you look at the kind of example that you described, I would say that as someone who’s in that stage of the career where they may not have the capacity to take on more clients. So just think, well, actually, I don’t want an uplift of 20%, 24% in sales because I might not process that. But one of the things which I suppose the EI research shows actually is that it impacts your quality of life.

And there is finding which is quite common in research, is that actually EI scores correlate with age. So as we go through life and we have sort of ups, downs, highs, lows, and we learn from those. We learn from our emotional experience, and that’s hypothesis, is it feeds into our EQ score. So you’ve probably got people at that later stage of their career who actually probably have had experience which has developed their emotional intelligence. They’ve got mature standing, which means that they might not necessarily need to go out and find new clients. They’ve got experience, which has helped them develop client relationships, but they might want to take a step back at quality of life. If they’re experiencing stress, burnout, pressure, EQ can help absolutely with all of those.

The other thing which is quite common as well is that if they’re playing any sort of leadership part within that business now, let’s say if they’re a business owner, EQ absolutely is key for leadership performance. So making sure that you’re building a team of people around you, you can help you develop the business. And actually, EI and leadership’s one of the biggest areas where research has been focused.

But I think one of the other things I’ve got to say is that we’ve all got blind spots. It doesn’t matter where we are in life, we’ve all got things that I suppose that we could be better at. And actually shining a lens on those and improving our self-awareness is something that you can develop at all stages.

Mindy Diamond:

A lot of people in our industry, whether it be a recruiter or an advisor themselves, believe that efficiency or being most effective and efficient is the true north. And that to ask what may fee like unnecessary or ancillary questions that don’t directly get to help me to figure out what your asset allocation is so that I can grow your portfolio, may feel ancillary. And so, is that one of the most common objections you get when somebody, say, comes to you and they’re thinking about retaining you and they’re wondering what the benefit is?

James Woodfall:

Well, I think the people in firms I tend to talk to, there’s a couple of common things that are coming to mind now. One is pressure around fees. So, how can I make sure I’m articulating my value in a time where clients are more informed, they can go on AI and they come to meetings prepared with answers, and they’re challenging back around the value that advisors can provide. So getting back, I suppose, and the answer is funnily enough, is actually if you’ve designed your service around a proposition which makes yourself easy to replace by someone else who can do it for the same or cheaper price with a promise of better performance, or even in the years coming, a robo-advisor, it’s going to be challenging to retain and grow clients. But I’m not particularly worried about AI.

The other types of firms that come to me is to say, “Look, we’ve identified actually that we need to think differently about our business model, what we do and who we serve, because it’s going to be easier than it’s ever been for clients to come up to do some of these things themselves.” But absolutely what is untouchable, I think, is this ability to create a human connection, to sit down and discuss a range of different options. “Do I do X, do I do Y? What are the trade-offs if I choose that over that?” And to uncover those things which, as I said, really keep people up at night and solve for them. I think it’s going to be quite hard to replicate that digitally.

Mindy Diamond:

So I want to get to a end that you hit the nail on the head, and I want to delve deeper into it. Whatever the advisor is looking for, they may not worry about pressure around fees, they may not be kept up at night. They have a practice or a business that’s worked well all these years and is growing organically and it’s more than good enough. But anybody who isn’t concerned about the potential impact of AI on their business and whether they’re a financial advisor or recruiter or anybody else, is living under a rock. So, the goal for everyone should be to make yourself untouchable. And you hit it on the head, it’s the ability to create human connection.

So, I want to ask you something. It occurs to me, you talk a lot about learning to ask the right questions. In some cases, the questions that a client never been asked before makes sense to me. But I think the real skill, I mean, I imagine anybody can teach you a list of questions to ask. The real skill comes in is knowing what to do with that information.

So, let’s assume that someone says an advisor says you ask that smart question, “What keeps you up at night? What do you think about at 3:00 AM?” Pressure around fees. I find people, clients asking me, prospects asking me all the time what sort of value I can add, whether it be in the land of AI or competitively, whatever it is, pressure around fees. What do you do? So you’ve asked the smart question, but what do you teach? What do you do with that information?

James Woodfall:

It’s a mindset, I think, because having just say a list of questions I don’t think is really helpful to any advisor when you’re training them. And yet I find I do get people who, okay, say, “Well, look, what questions should we ask? Have you got a list of questions that you would ask?” I hold back giving those out because I think that, well, that’s what I would say. It’s not necessarily going to land the same way if you say it.

The mindset I’m trying to teach advisor is to adopt a curious mindset. So not asking questions for question’s sake, but if I’m talking to someone, what I want to do is I want to understand, how are you thinking? How do you see the problem? What assumptions are you making? What things do you believe which maybe don’t line up with how things are in reality, or goals, objectives, or whatever it is. So I’m trying to understand how you think, and that requires not asking questions off a list of great questions to ask, comes off of understanding the format for that, is utilizing the open questions to gather information, to check assumptions that might sit behind them, because actually understanding those assumptions is really, really useful. And to then summarize and play back to someone that you’re talking to so that you can demonstrate that you’re listening and you deeply understand them, and being able to summarize and be able to succinctly put their words into a, “Well, what do we do next about this?”

Mindy Diamond:

Yeah, and, why does it matter? I love that because what I always say is it’s art, not science. AI could give you a list of, if I put in the topic of emotional intelligence and give me a list of 10 smart questions to ask relative to X. One of the questions I would ask someone from an emotional perspective that demonstrates I have strong emotional perspective relative to pressure around fees, AI could spit out the questions. But I think you’re 100% right. The real key is being a good listener and meeting someone where they are. And it’s not about a prescribed or canned list of questions that demonstrate you have strong emotional intelligence. It’s much more about asking the right next question, saying the right thing, the validating statement afterwards. And not as a means to an end, not as a means to a transaction, not as just a way of checking the box, I have emotional intelligence, but really because demonstrating that you deeply care. And I like what you said, the notion of a changed mindset. Do people get that right away?

I guess what I’m asking is, financial advisors, while smart ones who are looking to make themselves untouchable by AI will get that concept. They’re looking to differentiate themselves and they’re looking to hone the skills that AI can’t bring to the table. But at the same time, financial advisors are number oriented and goal oriented. And so, how long does it typically take to begin to see, or how do you paint the picture about getting from here to there, connecting the dots between strengthening changing your mindset, strengthening your emotional intelligence, and seeing more results?

James Woodfall:

Well, look, it’s about behavior change, isn’t it? Like any kind of behavior change, there has to be a few things at play. One is that you have to have a good understanding of where you are right now, what things that you are good at, but what things you need to work on. And then effectively the things you need to work on, you need a plan of how you’re going to work on them. So I think commonly how you develop these kind of relational skills is that you need to be able to get close to, what does the goal look like? Where am I headed? If I get this right, what’s it going to look like?

And then you need to have a plan to get from A to B. And actually part of that plan has to be built around good feedback. And I was quite lucky where during my career, I worked for two large banks before I started my firm. And I had really, really good training from managers that I worked with, almost on a monthly basis would come and sit in my client meetings and then feedback to me about what I could have done better.

And so actually, if you’re going to really commit to developing, I suppose relational skills and becoming more emotionally intelligent, you need help from someone within your firm or externally to come in and actually observe you by trying out new things and giving you feedback. Now of course, you could do some of that yourself if you’re doing a virtual meeting, you could hit record, play it back, be your own analyst. But quite often we can’t see that ourselves, but if you’ve got say a third party, they can watch you in action. Quite quickly they can hone in and say, “Well, actually, you could have asked a different question here, or actually if you’d phrased that like this, you might’ve got a bit more information, or the client closed down when you ask that question.” So actually then, you start to create that behavior change.

So feedback I think is one thing, but actually aligning it with really, values, I think. So, one of the things that I suppose is quite important for behavior change is that we are motivated to do things where we strongly believe it’s the right thing to do. So, I think which is why it can be quite difficult for a firm to bring in with a team of advisors and say, “Well, we’re going to roll out emotional intelligence training,” because you’ll get some of us go, “This is brilliant.”

Mindy Diamond:

Eye roll. I would imagine eye roll is the… It can be a lot of the response, right?

James Woodfall:

You get a lot of resistance, because some people see it as a criticism of just saying, “Well, actually I’m good at that. I don’t need training in that, thank you very much.”

Mindy Diamond:

And because if efficiency in getting to a goal is the true north, I mean, I think the mindset shift you’re talking about is going from believing that getting to the goal by just asking the right numbers and dealing in data, changing that from it’s about building a relationship, which ultimately will impact the amount you manage and how you grow and how you connect and all of that stuff. But for people that are goal-oriented, linear in their thinking, I imagine this can be not just felt as a criticism but hard to embrace.

James Woodfall:

Oh, yeah, no. I think we view the brain as kind of a black box. I do get people I speak to, they go, “Mental health isn’t real. And all of this is psychobabble,” but from the people that I’ve had feedback from, and this is even for people I haven’t trained. I wrote a book about 18 months ago about the topic which talks about emotion intelligence within the 5X context. I’ve had people contact me on LinkedIn and say, “Look, I read your book. I’ve been following your content for a while. I’ve put some of the ideas to work, and I’m now getting my manager and their manager contact me and saying, ‘What are you doing differently?'” Because all of a sudden they’re opening up conversations with clients that they couldn’t before, doing business with clients where they couldn’t before. And all it is that this kind of focus on the client, the relationship, building that connection, and all of a sudden you start seeing that convert into more sales opportunities.

Mindy Diamond:

Yes and more yes, because that’s always been our philosophy, my philosophy from starting the business and our philosophy, and I couldn’t agree with you more. You articulated it probably as did, I got to it instinctively. You have research behind it, etc. By the way, for our listeners, we will link your book in the notes for this episode if anybody’s interested in buying it. But you hit the nail on the head, so, or you took the words out of my mouth in terms of next question. Who are your clients? Are they individual advisors? Are they independent RIAs? Are they Morgan Stanley and Merrill Lynch? And what kind of work do you do for them?

James Woodfall:

So, I do, there’s probably two parts to my business. One is the consulting training part, which is going into firms, typically firms that were the owner managed typically, where the owner either is still advising or has a big impact on other behaviors of the advice team that’s underneath them. And really, I work on a consultancy basis. So rather than going and just provide EI training, what I do is effectively start with understanding the business.

So exactly as I’ve been talking to you about, the process I used to follow as an advisor, it’s the same process I follow when I’m working with practices, is I want to find out what’s going well in the business. Where are the blockers, what’s not going so well? And I’m a social science researcher. So I’d want to spend some time in the business actually doing a bit of a deep dive and maybe speaking to the team while the owner’s not in the room and finding out a bit about how they’re seeing things. Because ultimately, what that will do is it allows me to look at thematically extracting what types of training interventions might move the needle within the business.

And then I put that onto a report for businesses and say, “Look, this is what I think we should be doing.” Some of that might be me working one-to-one, doing that coaching, observing, training with particular people in the business who have been highlighted as requiring development, or it might be group training, might be taking the whole teams through a training program. And then following up, helping build those development plans, and then being there supporting with the one-to-ones as they bed in that behavior change. So, that’s one part of the business.

The other part of the business is working for the larger firms. I’ve done a bit of work for Fidelity this year and last year, and they’re looking to hire me as an authority expert on the topic to put together training programs that go out to the advisors that they work with. So, there’s the two aspects, like an external speaker trainer that’s brought in by some of the larger companies. And then the other one is a bit more hands-on, applying not only the science but my experience of having been there and run a business.

Mindy Diamond:

Right. So are the big firms like… So you mentioned Fidelity, are the wirehouses, Merrill, Morgan, UBS, Wells Fargo, are they embracing this? Are the big banks embracing it, or is this largely in the RIA space right now?

James Woodfall:

In the UK, there’s been a huge kind of interest in emotional intelligence, behavioral finance, relational skills. And actually, a lot of the kind of people who require influential in the UK are actually based in the US. And so, I think there’s a good bit of crossover. We’ve got good people who are specialists in looking at the retirement piece from a retirement transition about, how do you support people through what is a profound psychological transition? So, I think the RIAs are really interested in it as a topic.

Then we’ve got the larger institutions are interested in it either as the RIAs are clients of theirs and they want to be seen to providing thought leadership to the RIAs and helping them develop these skills. But also, we’ve got some quite large companies in the UK now here, like the banks, for example, the banks or the whole exited the advice market in around about 2012, 2013, and then this year they’re starting to come back. So they’ve had 15 years nearly out of the market and they’re coming back because they’re just wanting an opportunity for face-to-face advice. So, I think actually it’s a hot topic now and I think all segments of the market are looking at, how do they develop non-technical skills to help them succeed in the future?

Mindy Diamond:

Can someone who was not born with strong EQ, can they learn this?

James Woodfall:

Absolutely. One of the interesting things about EQ is it’s not like IQ, for example. IQ is our a sort of cognitive ability. There was some good research that was done probably about, I think 2016, which looked at, do you remember all this sort of brain training apps like, if you do Sudoku, do you get smarter? You get better at Sudoku, but it doesn’t translate into performance on another. You don’t get better at crosswords from doing Sudoku, for example. So, IQs are pretty much fixed and there’s not a lot we can do about that. But EQ has been shown to be a trainable ability. So regardless of where you are now, if you understand your strengths and weaknesses and put a plan together for improvement, everyone has the ability to improve their EQ.

And it’s not like personality, for example, where it’s quite hard to shift the dial. Let’s say if you’re quite strongly introverted and you find social situations difficult, if you just took that approach and said, “Well, look, can we make you extremely extroverted?” The answer would be, well, probably not. But EQ absolutely helps that person because noticing that you feel uncomfortable in, say, a networking situation if you have to do that professionally, having the tools in the bag to manage that feeling and throw yourself into the experience, that’s EQ in action. So, it doesn’t matter your baseline of where you are, EQ can have a big impact on your ability to perform across a range of different contexts, home, work, with friends.

Mindy Diamond:

Yeah. Let’s talk about your comment that EQ or strong emotional intelligence is what can make an advisor untouchable by AI. And I assume the premise being that, I can’t replace a human relationship. It may be able to come up with the questions, but at least for today it lacks the ability to know what to do with that information and to create the human connection. Talk to me more about that. How and why is that? I mean, is that part of why people are coming to you, because they’re worried about AI encroaching on their business?

James Woodfall:

Where we are at the moment is actually AI… Let’s look at healthcare for a second. Chatbots in healthcare have actually been outperforming humans in some respects. So there’s a type of therapy called cognitive behavior therapy, that’s been run with AI agents and patients. And as researchers to show that actually, disclosure has increased when patients are speaking to a chatbot because cognitive behavior therapy is like it’s guided, is a method, it’s a methodology to it. But disclosure increases and this theory behind that is is that people open up more when they don’t feel like they’re being judged by another person. So that’s interesting, because that saying to us, “Well, actually, people are trusting AI agents with very, very personal information, and people are already getting that feeling of empathy with AI agents.” Because if you tell an AI agent something deeply personal and it says, “That must have been really difficult for you,” for example.

Mindy Diamond:

Yeah, it does that well. Wonderful feedback about how great you are or what a smart question you just asked.

James Woodfall:

Yeah, but it’s synthetic, it’s not real empathy, it’s synthetic empathy. Whilst we might feel actually we get that feeling that we’re being understood, it’s not real. And I think the advisor’s edge is, look, I think where we might end up with this is that if you take a step back and you do this kind of exercise of what’s my ideal client, the ideal client is, I think, now is someone who is still time poor. So yes, an AI agent might be able to interview you, build a financial plan, but do you really want to spend the time doing that or do you have any inclination to do that? No. Well, that’s a perfect client who would hire an advisor. They value human relationships.

Obviously when we do get AI entering the advisor market, it’s going to be at a lower price point. So actually, we’re now talking about a difference between experience. So the experience of being with an advisor comes at a premium. So that experience is going to be what people are going to pay additional value for. So, it’s the experience of dealing with a human. It’s the experience of dealing with a human who can talk them through complex information and options, help them understand their thinking and apply judgment, connect with those emotional things. But there’s a whole range of information that we get when we’re talking face-to-face, which AI doesn’t have access to.

So back to that retirement example, if we say, “Well, man, I’ve modeled your plan. If we do X, Y, and Z, you’re not going to run out of money when you retire. You’re going to be okay.” And then the person, usually what they do is they sigh with relief, which is actually the emotion of joy, relief is actually happiness. So that sigh of relief and the softening of muscle tension in the body that you see when you’re face-to-face with another person, AI can’t, doesn’t get that data.

Mindy Diamond:

And how powerful is that? So, why does that matter? If I say, “I have X, I need Y. I have X number of years until I retire. Will I have enough money to retire the way I want to?” AI can spit that answer out faster than any financial advisor and come back hopefully saying, “Yes,” they’ll know that I will experience relief and joy because I’ll write back saying, “Great news.” It’ll say, “Yes, that is fabulous news.” It’ll tell me why I’m relieved and all that sort of stuff. So, why does that matter?

James Woodfall:

I think fundamentally, it comes back to trust. For those people who can get that quick answer, they’ll go, “Yeah, that’s great.” But there’ll be some people who go, “Yeah, fine. I’ll take that answer at face value.” There’ll be other people who go, “Well, what if you made a mistake?” Quite interesting that actually, people will get the same answer from a human advisor and they’ll trust it more. And I think one of those things is because we’re wired for connection, so when empathy develops, it’s quite interesting.

Something which you see in young children, for example, is when we develop at the very early stage, probably about three or four years old, before children have learned to self-regulate their emotions, you see emotional contagion in groups of children happen quite rapidly. You get one child who say gets a toy taken away from them and starts crying, and then all the other children at the same age in the nursery start crying. Now, none of those other ones are crying because they’re sad. They’re crying because we have these things called mirror neurons, which means we pick up and mirror the emotional state of people around us. So, you actually get an experience of shared feeling and especially if you’ve got strong rapport, strong relationship, you actually share emotions of the people around you. Now, of course, as we grow out of that developmental stage, we learn this ability to understand that actually what we’re feeling isn’t happening to us, it’s happening to someone else.

But have you ever been around… My favorite example for this is, if my wife has had a bad day at work because she comes home and starts slamming the door and banging cupboards, why I start to feel anger, because it’s rubbing off, it’s in the room. So, it’s this shared understanding that I think is where the value is. And so absolutely the answer might be faster and quicker, but for some clients they value that experience of having that answer delivered by someone who understands them.

Mindy Diamond:

And I think, so the point is that there will be clients or prospects that will value the efficiency of AI, that don’t necessarily need the face-to-face, that don’t necessarily… They just want the answer. They want the answers to the test, they don’t care how you got there. But what you’re talking about is finding the clients that really value the human connection. And if that’s what in fact is going to make advisors untouchable, then they need to make sure that they really strengthen this skill.

James Woodfall:

It’s not just the answer, but it’s the whole experience that’s wrapped around that. So actually last year, and my wife took me to a restaurant and we had a lovely, lovely meal. And on the menu there was this cup of coffee and the beans were like one of the rarest beans in the world. They’re the ones that get eaten by this little animal with the jungle in it, poops them out, and then the beans get roasted. But it was about 40 pounds for this cup of coffee and I thought, well, I’m going to have that. But that’s the experience, isn’t it? I could get a cup of coffee at McDonald’s, but actually the experience of this, something which is rare, exclusive, delivered in an amazing environment, that’s what you’re paying for.

So, you’ve got to remember that actually if experience dictates a lot of what we value as well. So because if all of our decisions were made on price, Ferrari wouldn’t have a business because everyone would just be buying the cheapest car that does the job. You’re going to think advisors that are going to operating in this space, well, they need to think about the whole package, as in the experience that the plan that’s delivered, and the advice.

Mindy Diamond:

But it speaks to the notion of any advisor that isn’t thinking about AI’s impact on his business and how to reshape or rewire the business, even just rewiring the value proposition, retooling their value proposition, how they explain their value and what they do needs to change because they’re competing not only with the advisor that sits next to them or down the hall, but they’re competing with AI. How about as AI, as you see AI develop? So fast-forward five years, you and I are talking about where AI is today, but AI is, God knows where it’ll be five years from now. So, how do you foresee, do you still foresee the advisor being untouchable if they get this right, five or 10 years from now?

James Woodfall:

I don’t think it’s financial advice that’s unique with this, because I think it’s any profession where at the moment human judgment and understanding are valued. Healthcare, for example, same thing, doctors follow consultancy process. You’ve got this like tax, legal, a whole range of professions which are all grappling on the same problem.

So I think in five years time, I think the answer is, is that we just don’t know what AI will look like. But certainly in the moment, if you track what Claude are doing with code work, and what Perplexity is doing with its skills and add-ons, a lot of it is actually at the moment geared up to freeing up the advisor’s time so that they can spend more time with clients. So, I think at the moment this sort of trend is looking like AI companies want to support advisors to be way more efficient so that they can deal with more clients. But in five years time, who knows?

I think probably one of the biggest leaps that will happen is when AI is no longer working from, say, just a transcript. If it gets out to that kind of chat where you can actually interact with an AI agent like you and I are talking, I think that’s going to provide a different experience, because then you’re moving it from, as I said, that kind of structure where somebody is stuck there tapping away at keyboard, having a conversation with a chatbot, effectively, to actually having a conversation with an embodied agent with a face, gestures, a voice. That I think will start to change things a little bit.

Mindy Diamond:

Yeah. Well, it will be an interesting future, for sure.

This has been a fascinating conversation. I really enjoyed it, and thank you so much for sharing so graciously. Is there anything to wrap up that I didn’t ask you, that you would want an advisor to know about this concept or anything you’re thinking about?

James Woodfall:

I think we’ve taken a broad sweep and then a deep dive into certain areas. I think really probably have to get started. I think probably one of the… I mean, you mentioned obviously I’ve got a book that you share the links to, which is fantastic. Audiobook is available to that as well on Spotify or wherever audiobooks are listed. I think there’s a lot of good advice in that about how to get started. So, I think for people who are looking at covering that next step of, what do we do, it’d be, yeah, pick up a book and have a bit of a deep dive. If you want to skip the book and come straight to having a conversation with me, then I write a weekly email, which goes out once a week, which is just one topic. So very much like we’ve been talking today, I share ideas on that once a week, or on LinkedIn, I’m around on LinkedIn as well.

Mindy Diamond:

Good. Well, we will link all of it so everyone knows how to find you. Thank you again for being so gracious. Love the topic, love the work that you’re doing, love that there’s a need for it, and can’t wait to see where you go from here.

James Woodfall:

Brilliant. No, I enjoyed it. Thank you.

Mindy Diamond:

Thank you.

As a financial advisor, you hold yourself to the highest standards of integrity, honesty, and credibility. You are successful because you take your professional responsibility seriously, and are dedicated to your clients. But are you living your best business life? Are your goals aligned with your firms or could a better option exist? Should I Stay or Should I Go? Is a book written with you in mind? It’s a self-guided journey that walks you through the key steps that we take with our advisor clients. This strategic thought process and roadmap to professional self-discovery is designed to help you ask the right questions and think critically and objectively, whether you’re considering change or not. Learn how to get your copy at diamond-consultants.com/thebook.