RIA custodian Equity Advisor Solutions and ETC Brokerage, both affiliated with the family that founded Equity Trust Company, have combined to create Innovayte, a new custody and clearing platform that seeks to work with “entrepreneurial” RIAs and broker/dealers. The new entity currently clears through Axos Clearing, but it will go self-clearing eventually.
Innovayte will be led by Catherine “Cat” Davies, who most recently served as chief solutions officer for Hightower. Davies first joined Hightower in May 2019 as chief of staff and head of business management. Before that, she served as senior relationship manager and vice president at Fidelity.
Davies said Innovayte will target firms with between $100 million and $800 million in AUM. She said with other, larger custodians, “while technology has been helpful, they’re not spending as much time and energy with those types of advisors.” With the average advisor's age being in the 50s, she cited the wealth management industry’s coming so-called “retirement cliff” as being a major concern. She said they were focused on this coming “second generation” of advisors who may be more technologically advanced.
“We want to grow with them,” she said. “We want to handpick who we want to work with.”
Innovayte is “in it for the long run” as Davies said they are not intending to sell to private equity in a few years.
“We want to grow over the next 20 years with them, or longer,” she said. “We have long-term capital. We are not here to sell. We don’t have private equity money. That is not what we’re doing. We will build for the long term.”
Equity Advisor Solutions and ETC Brokerage Services are owned by the Desich family.
Davies believes custodians should be more accommodating of RIA firms that want to be multi-custodial.
“Not everybody wants that,” she said. “People should have multiple custodians in case they end up with a custodian they don’t want to be with. … The world has changed. We need to be more accommodating to the idea that we need to meet the advisors where they are. If that’s at two custodians or if it’s three, that’s where it is. They need to handpick the custodian that fits what they need at that time and the types of services and products that they want.”