Compound Planning, a $1.45 billion tech-centered RIA created via acquisition last year, has added more recruits in the first two months of 2024 than in all of 2023.
With 15 new advisors this year, five more than joined all of last year, Compound has been onboarding recruits at a rate well above CEO Christian Haigh’s stated goal of about two a month. Nine came on board in January, one in February and four more joined earlier this month, per their LinkedIn profiles, bringing advisor headcount to 25 out of 70 total employees.
Nearly all made the move from Personal Capital via Empower, which acquired Personal Capital in 2020 and transitioned all employees to its branding by early 2023. One, Michael O’Connor, joined this month from Advisor Partners.
“We’ve recruited each advisor individually,” said Haigh. “It was funny when the nine advisors joined in January, and they logged on to our Slack communication system, they were like, ‘Whoa, these are all my friends!’ So we were able to keep it pretty quiet, but I do think that after that first wave of advisors came over, we had a lot of other advisors and other team members there reach out.
“I think the business model resonates with those advisors,” he said. “Personal Capital is in a similar category in the sense that they have their own proprietary dashboard and client experience—as do we. And we’re at a point in time, something like 10 years later, doing exactly what Personal Capital was doing when it was founded. But we’re at a point in time where there are new technologies available and there’s a lot more that we can build on to create a really great experience.”
“The team, beautiful client dashboard and robust service offering—including in-house tax advisory and access to alternative investments—is a combination that I simply couldn’t find at other firms,” Compound Senior Vice President Matt Buenafe shared in a LinkedIn post last week.
Some components of Compound’s technology stack are built in-house, such as onboarding, account opening and a proposal generator. Others, including reporting and reconciliation, rely on API connections with third-party vendors.
“We have a large product and engineering team and invest a lot of money into new R&D, every month we're putting out new features and we’ll continue to do that as we scale and build out what I would call an operating system for wealth management,” said Haigh. “We’re taking what we’ve learned from similar businesses like Mint, which also has a dashboard, and trying to build that next wave of bionic experience with clients.”
In the 3rd quarter of 2023, Haigh’s 2-year-old RIA platform, Alternativ Wealth, which had been working to build back and middle-office software to help advisors manage their books, bought Compound, a “tech-enabled financial and tax advisor for tech executives and creating a self-described “digital family office” overseeing about $1.1 billion in assets.
“Building an incredible client experience was on the roadmap, but we hadn’t started building yet,” Haigh explained. “When we came across Compound and there was an opportunity to buy the firm, we realized that they had focused solely on the client experience and built out what I personally thought was one of the best client experiences that I’d seen in the industry.”
He noted an interactive client dashboard allowing advisors and their clients to create personalized financial plans collaboratively.
“You’ve got all these advisors who have a personal relationship with their client, and then you’ve got the robo-advisor movement like Wealthfront and Betterment, where it’s just fully automated,” said Haigh. “We’re somewhere in the middle. We have advisors who have great relationships with their clients, but we accompany that with software that enhances that experience so clients can interface with our firm without having to talk to their advisor every time they do.”
Eventually, the plan is to add another business line combining aspects of the technology and wealth management businesses into a white-labeled service for tangential financial companies seeking to incorporate wealth management without the headache of bringing advisory in-house. The idea, Haigh explained, is to capture more tech-savvy young earners ahead of a widely anticipated generational wealth transfer.
With corporate headquarters in New York City, Haigh is based in San Francisco, and all Compound advisors work remotely from locations all around the country. New advisors are brought in as W-2 employees and adopt Compound branding.
Compound recently hired a sales director, a head of advisor recruiting and a head of tax advisory to support ongoing recruitment efforts. The firm is targeting clients who are primarily in the 30 to 55 age range and have $1-10 million in investable assets. Haigh said he expects to attract younger advisors as well.
“They’re still excited to continue to grow on both an educational level as well as with their book of business,” he said. “They tend to be hungry and excited for something new and to be working with clients who also fit into that category. There’s a 30- to 50-year-old client who’s more digital-native, and we really resonate with that kind of advisor and clientele because, typically, we have a better client experience that is specifically targeted for the kind of clientele that they work with.”
The firm is using Charles Schwab and Fidelity for custodial services.