This month, we’re profiling two advisors who have recently gone independent. Michael Parikh, age 45, and Jon Wakely, age 48, started Boston-based PW Global Advisors in May 2008. They were previously with UBS and Merrill Lynch and have 24 years of experience and more than $100 million of assets under management. Here’s what Michael and Jon have to say about going independent.
Q: What has been your biggest challenge so far in going independent?
Michael: The idea that we are running two businesses. One being our investment advisory and the other being the business that manages that advisory. We are now responsible for not simply managing our client relationships, but also all of our new business relationships with the custodian, vendors, attorneys, prime brokers, etc.
Q: As the saying goes, the “devil’s in the details.” What are some of little-known things that you learned in the process of going independent that you hadn’t thought about before?
Jon: How many options there are for everything! Custodian, performance reporting, prime broker relationships, compliance, accounting, legal—all of which need to be decided on and monitored to see if there are meeting both our clients’ and our needs.
Q: How long did the process take you?
Michael: Two months of research, negotiations, and decision-making and one month to tie everything together. Ideally we would suggest spending double that time in preparation. As suggested in the previous question the devil is in the details. You need more time to vet the answers to all the details.
Q: What advice would you give to advisors looking to go independent?
Jon: Talk to as many people as possible that have recently made the move.
Michael: We would also suggest having a master list of all decisions that need to be made and systematically go through them. Take legal, for example. This includes who is going to represent you, but also gaining an understanding of the scope of work that they will be doing for you—ADV forms, licensing and negotiations, among other things. Then there’s the custodian. It’s not just the platform that’s important, but you also have to consider the statements, detailed trading costs, investment options, client interfaces, prime broker arrangements, performance reporting integration, billing, transition support, and ongoing support.
Jon: It’s a lot to think about, but if you create a master list and check things off one by one, it makes things more manageable.
Q: If you could go back and change anything about the switch-over to independence, what would it be?
Michael: Do it sooner. We were always questioning if we should wait until some event in the future happened—we had more assets, the economy was better, the regulatory environment was different, etc. But if it is something you have thought about, there are plenty of resources out there to gather information to see if your practice would fit into an independent model.