Daniel Wiener, chairman and co-founder of Adviser Investments, a $5.5 billion registered investment adviser, is calling out the fee-based financial planning industry for taking what he describes as government handouts.
“Shouldn’t any wealth management company that purports to provide sound investment and financial-planning advice be maintaining a robust balance sheet for just those periods when the economy, the markets or an exogenous event require emergency funding?” Wiener wrote in Citywire RIA after learning that several multi-billion-dollar RIAs were taking the forgivable government loans designed for rescue businesses impacted by COVID-19.
As InvestmentNews pointed out in March when the first wave of stimulus money was moving through Congress, Wiener believes the fee-based business model, unlike hair salons and restaurants forced to close their doors, continues to charge fees based on portfolio performance.
Jeff Benjamin: Why are you so passionate about the way some RIAs are taking forgivable loans through the Coronavirus Aid, Relief and Economic Security Act Paycheck Protection Plan?
Daniel Wiener: Because the RIA business model is very simple, it’s based on assets under management and it is a business model that should be able to accommodate both bull and bear markets.
Taking a government bailout just because it’s easy to get is immoral and unethical.
JB: What do you think about fee-based firms taking these loans?
DW: If the business model is so broken they feel they need a government backstop and don’t have other sources of capital such as bank lines of credit already established, these are not viable businesses and shouldn’t be propped up in the first place.
JB: Can you see any justification for RIAs taking these loans?
DW: Absolutely not. Full stop.
If the business model is broken, it’s broken. The justifications I’ve been reading in some of the disclosures are completely at odds with the intent of the program. If the business is not at risk, why take the money?
JB: Should these RIAs do a better job of disclosing these loans?
DW: Yes. It behooves anyone who takes my tax money for a bailout to disclose not only that they took it, but how much they took.
JB: How should clients and potential clients view advisory firms that take these forgivable loans?
DW: There’s going to be a lot of false justification given for taking these loans, but clients should read through it and understand that one of two things happened: Either the firm is in a weaker financial situation than they thought, or the firm has some issues around the morality of taking government handouts. Take your pick.
InvestmentNews reported in 2017 that the IRS was scrutinizing the tax shelter land deals, called syndication conservation easements.
Advisors gain a second workflow for 401(k) guidance as the fintech expands beyond bulk rebalancing, backed by new policy research on advice access.
New data shows most people do not have enough saved to cover costs and are not fully utilizing their accounts.
Firms announce new recruits this week, with teams overseeing hundreds of millions in client assets switching affiliations.
It’s the 12th deal for Stratos since SEI's investment and follows 11 acquisitions worth $4.8B in 2025.
Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains
Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income
