Ron Carson will drop his personal FINRA registration this year and is making it easier for his network of financial advisors to follow suit.
In an interview with Wealthmanagment.com this week at the MarketCounsel Summit in Las Vegas, Carson revealed that he was taking steps to register a limited purpose broker/dealer, and will use it to buy the legacy, commission-based assets from any of the 80-plus advisory firms in his Carson Group network that want to go fee-only.
The move, he said, was in response to a desire from the advisors who want to go fee-only, but maintain their brokerage registrations simply because they have legacy, commission-based assets on their books.
“Advisors will still be able to advise on those assets,” Carson said; clients won’t notice a difference, and for the advisor, selling the trailing-12 commission stream to Carson will make it a revenue neutral transaction.
“It’s for efficiency. It will be much easier for these advisors to do business. These legacy assets are not a good use of their time,” he said. “It will be one less thing they have to worry about.” Keeping a FINRA registration means a broker must keep up with continuing education requirements and submit to FINRA examinations. For advisors who don’t do a lot of brokerage business, but with legacy trailing-commission assets for some clients, it can be time-consuming and costly.
This year he will let his own FINRA registration drop as well, he said. For Carson Group advisors that still want to do brokerage business, Cetera remains the firm’s b/d.
Though there were no details on how much he would pay for the commission-based assets, it reflects a move to help advisors say they are fee-only advisors, something it’s not possible to do with trailing revenue products in their books of business.
Carson Group has been on a growth streak: The firm has over 80 partner firms in the group, which Carson has either acquired outright or taken a stake in exchange for equity in the firm. At least 29 of those deals happened in the past year. Most recently, Maryland-headquartered Cornerstone Wealth Management Group, a registered investment advisor firm with $775 million in assets under advisement, joined the firm.
He said his firm is on track to hit $11 billion in assets this year; and with the acquisition of technology and marketing firm Mineral Interactive to create a unified, branded experience for clients throughout the group, he expects he can double that again to $20 billion in 2019. He just secured 10 acres of land in Omaha to build a new, 200,000 square-foot corporate headquarters, and predicts he’ll soon have 2,000 employees and stakeholders in Omaha.
At MarketCounsel, Carson presented for the first time in public his firm’s new technology portal, what he calls the “single-pane-of-glass” for advisors and clients. The portal brings together the various components of an advisor’s “tech stack” into a single, user-friendly interface, bringing clients through onboarding, account aggregation, goals-based planning and portfolio performance.
It includes a timeline of significant events for the client, including decisions that the advisor made along the way. Reminding clients of that entire chain of activity helps them justify their fees, he said. “They feel there’s a value being added because they can feel it and see it in real time,” he said.
The platform goes a long way to accounting for the $60 million his firm spent on technology over the past few years. Unlike United Capital, which rents out its platform to outside advisors, Carson said he wouldn’t offer an enterprise version to firms outside of his network.
“The amount we would need to charge to provide this, the market won’t pay it,” he said. “Our margins are razor thin. We couldn’t afford to sell if for what the market will pay.”