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Concurrent co-founder Nate Lenz

Concurrent Departs Raymond James to Form Multi-Custodial Hybrid Platform

The OSJ is leaving the Raymond James platform to form a hybrid RIA with greater flexibility and access to more resources, Concurrent says.

Concurrent Advisors is dropping its affiliation with Raymond James to restructure as a multicustodial, hybrid registered investment advisor over the coming months, the firm announced Tuesday, calling the move “a crucial next step in the firm’s mission to foster advisor entrepreneurship.”

Tampa, Fla.–based Concurrent, an office of supervisory jurisdiction with Raymond James' independent broker/dealer, was established six years ago as a technology and services platform for independent financial advisors. Merchant Investment Management, a New York–based private partnership that provides growth capital and other support to independent financial services firms, took a minority, noncontrolling interest in the firm last summer.

Concurrent is now restructuring to give its advisor affiliates access to a broader range of investment strategies, products and technology, according to co-founder Nate Lenz. Published reports indicated that Raymond James made the decision to split from Concurrent, but Lenz said the decision to leave and pursue other custodial relationships had been an “ongoing discussion” and that the broker/dealer eventually initiated an acceleration of its departure.

“We've been working collaboratively with them on the time line to be able to facilitate this," he said.

“Raymond James has decided to end its relationship with Concurrent Advisors and is in discussions with the branch owners regarding an orderly dissolution of our relationship,” said Justin Mayfield, a spokesman for Raymond James, in a statement. “Consistent with Raymond James’ values and commitments, we will support those advisors who want to transition with Concurrent as well as those who wish to remain directly affiliated as independent contractors with Raymond James.”

A source close to the RIA, who declined to be named, suggested that Raymond James may be threatened by the growing power of larger, more democratically run RIA partnerships and, seeing the writing on the wall, opted to end the relationship first. “It’s kind of like you don’t want to be the one that gets dumped first,” they said. “It’s a little bit like high school, probably.”

Other Raymond James advisors who have gone multicustodial, such as Steward Partners, ultimately retained the firm as a custodian, but Concurrent will not. Lenz said this is because other custodians are better positioned to serve SEC-registered advisors, which will be the focus of the new hybrid RIA going forward.

“We see the benefits of operating on the more traditional RIA custodial platforms versus a broker/dealer platform,” said Lenz. “Which is why we've looked at everything and we've decided that we want to step away from the independent broker/dealer space and get into a more truly fiduciary environment.” The firm has been in talks with Pershing, Fidelity and Charles Schwab, he said.

Concurrent will maintain a broker/dealer affiliation with PKS Investments, according to Lenz, but will focus primarily on developing a best-in-class platform offering for independent RIAs who want to maintain personal branding and culture while leveraging the capabilities, capital and intellectual capital a scaled partnership can provide. Rather than developing a proprietary end-to-end platform, Concurrent will rely on vendors and API connectivity to provide advisors and their end clients with a range of service options.

“Our advisors will have greater freedom to choose technology and service platforms tailored to their unique brand identities and client needs,” Concurrent co-founder Mike Hlavek said in a statement. “We’re excited to support our advisors with an even wider variety of integrations with market-leading planning tools, trading solutions, TAMPs, alternative platforms and CRMs.”

“They'll have options around their custodian that they choose,” said Lenz. “From an investment platform standpoint, they'll be able to gain access to a broader solution set of different managers. We're also excited about what's possible on the alternative investment side of things. So, I think the moral of the story is that, in our current state, we were captive to the single custodian and a singular set of technology solutions, you know, singular product due diligence. This is going to really open the doors in all of those different areas to create more choice for our teams and we’re really excited about that.”

The move to multiple custodial partners will not change the fundamental nature of Concurrent’s partnership with its affiliated advisors, said Lenz. Advisors will still have access to a platform of 38 dedicated operations staff for planning, technology, virtual administration and transition support, and Concurrent will continue to offer shared capital and strategic resources through its Merchant partnership. Lenz said that there will be no disruption in service or technologies and that the newly structured platform should be operational by next spring.

Merchant’s investment enabled Concurrent to accelerate inorganic growth initiatives and has been instrumental in helping to implement an equity swap option that three quarters of affiliates have already accepted. In 2022, the company has onboarded 25 financial advisors representing more than $3.4 billion in managed assets. Concurrent now has 145 advisors working from 66 locations around the nation and managing nearly $13 billion in client assets, with $12 billion more under advisement.

Lenz and Hlavek expect that the restructuring will “open a sea of M&A and advisor recruitment opportunities,” and have plans to reach $15 billion in AUM by 2023—and as much as $40 billion over the next three to five years. “There are a number of aspiring aggregators in the market—firms with $1 to $3 billion in assets and five to 25 advisors that don't necessarily have the scale to construct the platform or to gain the pricing that we do,” said Lenz. “I think that we'll start to really get aggressive on the acquisition, but we want to make sure that we're doing it in the right way and with the right people.”

“Concurrent knows our advisors need the best tools and most responsive service partners to succeed as fiduciaries and entrepreneurs,” Lenz said. “By removing the limits imposed by the single-custodian space and an antiquated wirehouse mindset, we have uncapped the growth potential of advisors powered by our platform.”

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