Want to win in the advisor wars? Then make sure you’re offering plenty of choices

Choice and culture are key weapons in the advisor playbook when it comes to battling market volatility, according to Centaurus Financial.

While the financial advisory industry has seen widespread consolidation in recent years, the national independent broker-dealer offers its network of advisors a vast array of options, from investments to technology.

There are about 650 independent financial advisors affiliated with the broker-dealer, which has around 100 employees spread across its home office in Anaheim, California, and four corporate offices in Virginia, Georgia, New Jersey, and Idaho.

“We have partnered with numerous money managers, platforms, and insurance carriers. We provide access to multiple custodians and have several experts within our home office that our advisors can turn to,” Adam Simon, Centaurus Financial’s SVP and chief administrative officer, tells InvestmentNews. “Even though our advisors are independent, they’re never alone – and we make sure that their choices are vast.”

Founded in 1992, Centaurus now has more than $20 billion in assets under administration. The company touts its independence as a key selling point at a time when many firms are being absorbed into larger financial advisory companies. “Consolidation has been turning larger independent firms into ‘wirehouses in disguise,’” says Simon. “In order to scale, these firms have no choice but to deploy service and technology models that make things easier on them – we like to make things easier on the advisor. We understand that our advisors are our most important asset.”

“More importantly, we offer our advisors stability so they don’t have to worry about consolidation. Our firm has not been bought or sold since inception, and we plan on keeping it that way,” says Simon.

The wealth management industry has certainly seen a big push toward consolidation. In 2023 a PwC report predicted that 16 percent of asset and wealth management companies will be swallowed up or fall by the wayside by 2027, a figure that is twice the historical turnover rate.

Market volatility has also been a key theme in recent months, as advisors and their clients attempt to navigate a turbulent geopolitical climate that has sent energy stocks soaring and taken indexes on a rollercoaster ride.

But John Trentor, chief distribution officer at Centaurus, says that the company is perfectly positioned for this scenario. “When [our financial advisor partners] take into account a surging market or a declining market, they can feel comfortable knowing they have solutions available to them to meet the specific needs of their clients,” he says. “So if there is a client that is looking to preserve and protect their assets, we offer many conservative solutions.”

“And if there are investors that are trying to capitalize on the upside of the market, we offer solutions that meet that objective as well,” he adds. “We’re very comprehensive by design in what we offer our advisors. We like to think of ourselves as the best kept secret in the industry.”

Culture is also critical, according to Simon. “From our experience, culture matters more than scale in this industry, and I think we sit in a sweet spot – we’re a mid-sized broker-dealer that still knows all of our advisors and many of their family members by name,” he says. “And all of our advisors have direct access to executive leadership at all times – we love to pick up the phone, unlike some other firms.”

Trentor echos these sentiments: “There is so much consolidation going on out there in the industry right now with broker-dealers – everybody seems to be chasing large scale,” he says. “Everybody wants to be the LPLs of the world – that’s okay, that’s just not us.”

We’re family-owned and -operated, we carry no debt, we’re just a really well-run company and we’re flexible,” he adds.

That flexibility is crucial when it comes to tackling some of the biggest issues the wealth management industry faces – an aging advisor community and shifting client demographics. Set against this backdrop, succession has been thrust firmly into the spotlight in recent years, as has the need to cater to younger generations of clients. Centaurus acknowledges this aging demographic.

“We offer our advisors a detailed road map to assist in their succession-planning efforts,” says Trentor.

“As we start to recruit the younger advisors, and some of the younger clients of those advisors, technology is a big need and want,” says Simon, noting that AI is on everybody’s mind right now. “We continue to make significant investments in technology to make it much easier for the advisor and much easier for the client.”