United Capital adds RBC vet, seeks organic growth

New efforts pave the way for the firm to enter more major cities and double revenue, says founder Joe Duran.
JAN 23, 2015
United Capital Financial Advisers, an aggregator of registered investment advisors, is gearing for more aggressive growth as the firm continues to capitalize on consolidation in the RIA space, according to founder and chief executive Joe Duran. The firm has hired a key recruiter in New York and opened its first “organic” office in Chicago, as it begins its quest to add around 20 to 30 new offices in the next two years and more than double its revenue from just over $100 million to $250 million in the next three years. The firm is already on track this year to nearly double revenue in the past two years, after bringing in $66 million in 2010. Mr. Duran said he expects about 30% to 40% of that growth to come from acquisitions and the rest to come from organic growth through recruiting clients and advisers to existing offices. So far, most of the growth has been from acquisitions. The firm’s objective is for the 47 offices in existence to grow to $3 million to $5 million a year. In the new Chicago office, however, the firm bought the office space first and has now moved in two advisers who have much lower revenue and operate as 1099 independent contractors. United Capital did not pay them to join the firm, but provides its back-office and client lead generation software for a “platform fee.” The goal is to get those advisers to $50 million in assets by year-end, Mr. Duran said. “We're opening a new office with no acquisition in place, and so we're testing out all kinds of new ideas,” said Mr. Duran, who is based out of the firm's home office in Newport Beach, Calif. “We want to be in every major metropolitan market.” Once they get to $1 million in annual revenue, or around $100 million in assets, the two advisers will have the option to join United Capital as partners or W-2 employees, or continue running as their own practice. Jason Del Col, senior vice president of advisory services at United Capital, said that bringing on teams that way demonstrates that the firm has built a successful client practice protocol that can be repeated in offices around the country. “We're driving organic growth,” Mr. Del Col said. “We have the client experience systematized and can start an office without buying our way into a market or buying a firm.” As part of its model, United Capital uses direct mail and other methods to generate client leads. It then forwards those on to advisers in its offices. There's also a call center in Dallas and other back office services that are provided remotely. The other portion of organic growth is set to come from recruiting established advisers who may be sole practitioners into the existing 48 offices. So far, the firm has hired 12 advisers to join onto existing offices, according to Mr. Duran. He expects that to accelerate. In New York, the firm brought on Ryan Marcus, a key figure in the registered investment adviser space who was involved in more than 300 breakaways, transitions and RIA acquisitions during his tenure as head of national business development for MarketCounsel, a consultancy for RIA firms. Mr. Marcus, 35, had most recently been with RBC Adviser Services, the RIA custody and clearing arm of the Royal Bank of Canada. He left after 11 months in the position before deciding to sign on with Mr. Duran at United Capital. He said that he wanted to work at an organization that was more nimble and believed in Mr. Duran's vision for consolidation in the industry and building on independent firms who are looking for scale. As director of new partnership development, Mr. Marcus will be responsible for finding new acquisition opportunities and also bringing on advisers to existing offices between Boston and Washington D.C. (An earlier version of this story incorrectly stated the company's revenue reached $66 million in 2012 and that some of its advisers had their own ADV.)

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