Integrated Partners, a Waltham, Mass.–based hybrid registered investment advisor with $13 billion in assets, has launched a W-2 employee model aimed at advisors new to the industry who will serve smaller clients that are referred through its CPA program.
Integrated has long had its CPA Alliance, a program that partners advisors with CPAs. The firm has 140 CPA relationships and works with CPAs to build out a wealth management business within their company. An Integrated advisor can then step in to run that part of the company.
Integrated also helps CPAs identify the right clients to introduce to the advisor, then helps them build a process not only with the client but also with the CPA.
“As we worked with our CPA partners and our advisors started moving up what we call the complexity curve, working with high-net-worth clients, family office type clients, there’s obviously a lot more to be done with those clients,” said Andree Peterson Mohr, chief implementation officer at Integrated.
The company realized that many of those lead advisors needed a more junior advisor to support their practices, so that they could focus on the more complex clients and their needs. But these are fiercely independent advisors.
“We can’t go say to them, ‘You have to go hire a new person,’” she said.
At the same time, Integrated couldn’t go to the CPA and tell them to send only $3 million plus leads. “We want to make sure we’re supporting that CPA as well,” said Rob Sandrew, Integrated’s chief growth officer.
Advisors in the W-2 model will likely serve clients with about $1 million and below in investable assets.
“We recognize that it was actually solving two problems by launching this W2 program to a) allow us to help our advisors and the CPAs be more successful because we were freeing up their time so they could focus on their highest, best use, and also kind of solving an industry problem where there’s a lack of opportunity for new individuals to get into the industry just because of all the barriers to entry,” Peterson Mohr said.
One of those barriers to entry is building up a book of business and actually earning an income. As employees of Integrated, these junior advisors will get a base salary, and the firm has two advisors in this model thus far. They’ll also get a sort of natural channel of client referrals coming in through Integrated’s systems and processes in place with its CPAs. They’ll also have the benefit of working with that senior advisor, who will be teaching them on the job and backing them up if needed.
“It helps them build their confidence as well; they know that they’re not alone in what they’re doing and the recommendations they’re making to the client because they’re following this pretty strict planning process and structure we have in place at Integrated,” Peterson Mohr said.
These employee advisors go through a two-week intensive training program when they come on board, in which Integrated conducts role-playing scenarios with them. A relationship manager oversees their training. They’re also made part of ongoing study groups with other junior advisors throughout the firm, regardless of whether they’re W-2 or not, where they can learn best practices.
Louis Diamond, president of Diamond Consultants, a financial advisor recruiting firm, said the new program was a smart move for Integrated.
“For Integrated, obviously there’s revenue and also a lot of future potential with these smaller relationships. So if they have a cost-efficient way to service them and give everyone a consistent experience, that benefits them,” he said.
It’s also good for the junior advisor, as it’s hard to get up and running in this business.
“Some people are really good and smart advisors, but don’t have the appetite or ability to go prospect,” he said.
“It’s an opportunity to help the industry evolve and continue to bring in new talent. Our industry does struggle with that,” Peterson Mohr said. “If we can do our part to help bring in new talent, make the industry friendlier to diversity and things like that, that’s what we’re trying to do.”
This follows recent news that Integrated is expanding into the RIA M&A space for the first time since its founding in 1996.