Integrated Partners is bolstering its outreach to brokers seeking a way out of the wirehouses, and their plan includes the recruitment of Juncture Wealth Strategies. The Scottsdale, Ariz.-based fee-only registered investment advisory firm has a total of more than $200 million in assets, and works with high-net-worth to ultra-high-net-worth clients between $2 and $30 million.
According to Integrated, the firm’s four financial service advisors, including CEO Barry Rhonemus and Mahes Prasad, VP of Business Development, will help strengthen their case with brokers that Integrated can ease the transition to independence by retaining many of the benefits they perceive are inherent with the backing of a wirehouse. During a roundtable interview with WealthManagement.com, Rhonemus said the firm broke with Wells Fargo in 2010 to become wholly independent, a move he said he likely would not have done if he had known how strenuous and intensive the transition could be.
“When you’re in a wirehouse or private bank, you’re used to picking up the phone when you have a need and calling someone,” Rhomenus said. “Being there for thirteen years, there’s some truth in that, but there’s typically a disconnect between what’s available and what actually gets delivered.”
Integrated Partners, which has about $6 billion in assets under advisement and is a super Office of Supervisory Jurisdiction (OSJ) with LPL Financial, hopes to entice antsy wirehouse brokers with boosts to its program linking CPAs with advisors (known as its Professional Partners Program), family office services and succession plan offerings. Rob Sandrew, the firm’s head of advisor recruiting, described the partnership with Juncture as a core component of its breakaway broker initiative. To Sandrew, Integrated’s biggest hurdle in reaching brokers was primarily cultural; he said Integrated needed to be sure it was speaking the language of the disaffected wirehouse broker when trying to attract them to break away.
“With the resources available within the organization, we’re providing those resources in conjunction with Juncture and what they bring to the table. But I think it’s a question of translation,” he said. “There does not seem to be consistency in terms of how the independent world faces off with folks coming out of that (wirehouse) channel.”
Juncture asserts the partnership allows for flexibility, letting recruited firms decide whether they want to join Juncture entirely or retain nominal independence. Juncture will custody with TD Ameritrade and Charles Schwab, and Sandrew affirmed that advisors who join them will have flexibility when it comes to their chosen custodian (though it remains to be seen if LPL will lift their basis point fee for advisors who custody assets off the LPL platform, as the broker/dealer agreed to do with Private Advisor Group earlier this year).
The deal is Integrated’s largest to date with a fee-only RIA firm, with Rhonemus stressing that it offers a good opportunity for brokers working with $2 to $20 million clients who currently feel that their only option is to ally themselves with a wirehouse. He said he understood the fear inherent with moving towards independence and said a clear succession plan was particularly important to advisors considering it.
“Most advisors are in their 50s or older 60s, and this is their last move,” he said. “They want to increase the value of their practice and then they want options to what succession looks like as opposed to just taking the sunset plan at Merrill, because that, in and of itself, is not giving them enough value for their businesses. This is one of the biggest life decisions these advisors will make; I know it was for me ten years ago.”
Sandrew and Rhonemus also stressed that Integrated’s practice acquisition and succession plan offerings needed to be structured in a way to help firms understand that the purchase is only the first step, and any successful succession plan requires the requisite work on retention. But Prasad found Integrated’s approach to be preferable to a firm built entirely upon one ‘type’ of advisor.
“They’re looking for diversity of thought and diversity of experience,” he said. “Now, you’re bolting on people that have experience in M&A, experience in private banking and experience in the wirehouses. And that’s exciting because we can all lean on each other.”