Retirement adviser aggregators want teams, not individuals

Tips to help small advisers looking to sell or join a specialist

Jun 2, 2018 @ 6:00 am

By Evan Cooper

A roomful of wisdom: Top execs at the RIA aggregator roundtable included (from left): Fielding Miller and Jamie Greenleaf.
+ Zoom
A roomful of wisdom: Top execs at the RIA aggregator roundtable included (from left): Fielding Miller and Jamie Greenleaf.

Greater competition and regulatory demands, as well as the need for more spending on technology, are making it increasingly difficult for advisers serving a limited number of retirement plans to continue in that business. Couple those trends with the ever-growing wave of advisers nearing retirement, and the result is a rising number of advisers who are deciding to shed the retirement-plan portion of their business.

As one leading registered investment adviser aggregator put it at the recent InvestmentNews Retirement Plan Advice Think Tank in New York, "If an adviser with just a few plans wants to compete for something other than table scraps, they'll need a team behind them."

For advisers considering selling their book of retirement-plan business or perhaps concentrating on the market more fully by affiliating with a specialist firm in that market, comments by participants in an RIA aggregator roundtable discussion at the Think Tank may be particularly helpful.

Attraction factors

Among the subjects discussed were the factors that make an adviser's retirement-plan business, as well as perhaps the adviser him- or herself, attractive as an acquisition or employee/partner.

The participants touched on six key themes that will help make small-book advisers more attractive to aggregators.

1. A willingness to stay and expand the business. For many RIA aggregators, an adviser looking to sell a small book of plan business and then exit is not appealing.

"We want to know what we can do with what you've built, how we can help you parlay that into something greater in years ahead," said J. Fielding Miller, chief executive of Captrust Financial Advisors, one of the nation's largest RIA aggregators. "We require you to commit to us for five years. It's not a blood contract, but it's a handshake that you're going to be around for a while."

In the same vein, aggregators find salesmanship the most attractive skill an adviser can have.

"Many retirement advisers are so technical, they find sales really difficult, and that's what we are really looking for," said Pam Popp, president of Lockton Retirement Services.

2. Having a team. Advisers with very small books of retirement-plan business — disparagingly referred to by many aggregators as "two-plan Tonys" — may be attractive to some acquirers, but more sizable businesses typically are preferred.

"Advisers join us [as independent contractors], so they keep their own brands and their own culture," said Vincent Morris, president of the financial services division of Bukaty Cos. "That means that if they are to do a full-service business, they need a six-, 10- or 15-person adviser team to have all the skills necessary to sell and service a retirement plan, which is why we have teams rather than individuals joining us."

3. Having a specialty. "Today, everyone pitching a $100 billion plan looks exactly the same," said Jim Owen, managing partner at Global Retirement Partners.

For that reason he likes to have a variety of specialists to deliver every aspect of what a client wants. Advisers looking to be acquired, therefore, may be considered more attractive if their practice is specialized and a potential acquirer finds that specialty necessary or complementary.

One particularly important specialty currently is financial wellness.

"The No. 1 hire right now is a wellness sales and implementation person who can grow that line of business," Mr. Owen said.

4. Having a complementary location. Because RIA aggregators are widely dispersed geographically, an adviser in an area where an aggregator is seeking to expand may be much more attractive than the same firm would be to an aggregator with a major presence already in that area.

"In addition to the cost of putting people in different parts of the country and the cost of travel, there's a huge cost in finding the right people in the right location who can be trusted to do the job," said Jeffrey Levy, managing partner at Cammack Retirement Group.

5. Thinking of yourself as a business, not a practice. Because many advisers still perceive themselves as running a book rather than operating a business, they often don't understand "what they have or what they are trying to sell," making valuation difficult, said Jamie Greenleaf, lead adviser and principal of Cafaro Greenleaf. She notes that advisers whose businesses are better-positioned for acquisition place themselves at a competitive advantage.

6. Being flexible regarding status and role. Advisers in business for themselves may have to adjust their way of thinking if they join an aggregator.

"Some people don't like to take their name off the door or hand the keys over to somebody else. Others can't handle the thought that maybe some of the people who work for them won't be needed. So there are a lot of emotional things to consider," Mr. Miller said. "We think that if you do it our way, you end up with a bigger pile. But that's the math argument; it's the emotional side of things that people get caught up with."

Evan Cooper is a freelance writer.


What do you think?

View comments

Recommended for you

RIA Data Center

Use InvestmentNews' RIA Data Center to filter and find key information on over 1,400 fee-only registered investment advisory firms.

Rank RIAs by

Upcoming Event

Oct 23


Women Adviser Summit - San Francisco

The InvestmentNews Women Adviser Summit, a one-day workshop now held in four cities due to popular demand, is uniquely designed for the sophisticated female adviser who wants to take her personal and professional self to the next level.... Learn more

Featured video


InvestmentNews celebrates diversity & inclusion in the financial advice business

Highlights of the Excellence in D&I Awards, showcasing the achievements of 26 individuals and firms that are moving the needle when it comes to diversity and inclusion.

Latest news & opinion

Ex-Wells Fargo brokers sue for damages, claiming they lost business in wake of scandals

In a Finra arbitration complaint, two brokers allege that Wells Fargo's problems damaged their business.

Invesco to buy OppenheimerFunds

Deal brings Invesco another $246 billion in assets, as well as high-fee actively managed funds.

Dawn Bennett found guilty of $20 million Ponzi scheme

Jury took less than five hours to convict the former financial adviser and radio host.

10 advisory firm employee benefits you won't believe

Some advisory firms stand out for their creative efforts to keep their troops happy and engaged. Spa retreat, anyone?

Small-cap funds take a beating

For most of the year, the sector had outperformed, but that all changed last week.


Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting It'll help us continue to serve you.

Yes, show me how to whitelist

Ad blocker detected. Please whitelist us or give premium a try.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print