Summit Financial has taken a minority, non-controlling stake in Kandor Global, a Miami-based registered investment advisor with $450 million in client assets. The firm joins under its new custom capital model, Summit Growth Partners, which was launched in January with the help of Merchant Investment Management.
Kandor, which specializes in serving the Latin American business community, represents Summit’s 13th such investment and its first aimed at serving international clients. The RIA was launched late last year by CEO Guillermo Vernet, who stepped down from his role as head of Insigneo Wealth Advisors, the RIA owned by Insigneo Financial Group, a financial services firm that specializes in serving non-U.S. clients.
“In the last decade, this whole international space of wealth management has gotten decimated,” said Stan Gregor, CEO of Summit Financial Holdings. “The bigger bulge bracket firms and commercial banks that were in this space have either exited the business entirely, or have significantly cut resources for servicing those clients.”
Wells Fargo, for instance, announced earlier this year it would no longer serve clients abroad. Several firms, including Vernet’s former employer Insigneo and Snowden Lane, have had success lately recruiting advisors out of Wells Fargo for that reason.
“Now you’re seeing advisors scrambling to go from firm to firm, and they go to domestic firms and they’re kind of a fish out of water,” Gregor said.
Vernet has aspirations to grow and recruit some of those advisors who focus on non-U.S. clients. Gregor said Summit can help.
“[Vernet] wants Kandor to be a solution for advisors out there that are either at the Merrills, the Morgans, the UBS’s, the Wells' and so forth that are probably not happy and underwhelmed and underservicing their clients,” he added.
Advisors who want to come under the Summit Growth Partners model must first meet Summit’s qualifications, including having clean records, revenues of $1 million or more, and a demonstrated holistic approach to wealth management. Once they join the partnership, they have access to all the services the firm offers to help an advisor run their business at a discounted pricing model, so an advisor would have a higher payout and lower expenses than those outside of the partnership. The advisor also gets upfront cash monetization as well as an equity stake in Summit Growth Partners. Merchant, which owns a stake in Summit, provides the funding.
In exchange, Summit would take a minority stake in that advisor’s business. If they so choose, partners also have access to credit in the future, whether it’s to expand their practice or possibly acquire a retiring advisor’s practice.
Summit Financial has built a turnkey platform for independent advisors, providing a range of services via five entities under the Summit umbrella. The firm’s RIA currently has about $5.7 billion in assets and 55 teams primarily on the East Coast. Advisors who join the partnership must come under Summit’s ADV, although they remain independent contractors.
In addition to getting the services of the RIA, advisors also have access to Summit’s financial planning company, with attorneys on staff who can do trusts, estates, legacy planning, business succession planning, tax planning, etc. The firm’s investment management arm will do everything needed to manage money for clients, including research, analysis, stress testing, portfolio generation, rebalancing and trading. Summit also has an insurance general agency via MassMutual, so it offers full-service insurance support.
The firm provides a technology stack through SummitVantage, an advisor dashboard that’s fully integrated with single sign-on functionality and electronic signature capabilities, powered by Salesforce, eMoney Advisor and Addepar.
Advisors also have access to Summit’s human resources company, which takes care of all of their HR needs, from insurance and health benefits to staffing and 401(k) services.