New RIA aggregator Uniting Wealth Partners gives majority ownership to advisors

Former Envestnet executives John Phoenix and Jay Hummel have launched Uniting Wealth Partners (UWP), a new RIA aggregator that will be majority-owned by advisors to challenge the existing roll-up RIA ownership structure.

Independent advisors who join UWP will split a 60% stake in the firm, while the remaining 40% will be owned by Phoenix and Hummel through their RIA consultancy, Wealth Advisor Growth Network (WAGN). UWP has secured up to $50 million in funding from a family office. Former Raymond James advisor Scott Shepherd and his $550 million AUM team has already joined UWP, and more additions are expected to bring UWP to $1.5 billion AUM by this summer.

UWP considers itself to be an “RIA succession incubator,” as the firm aims to attract the aging U.S. advisor population. Over a third of these advisors plan to retire over the next decade.

“We're providing capital initially. We value a firm based on their earnings and then we buy 20% of their free cash flow up front, and in exchange for that, they get a pro rata share of the 60% of the holding company that the advisors own,” Phoenix said. “We're providing financing for tuck-ins for smaller advisors, and giving those smaller advisors the ability to have the bigger multiple but also setting them up to be the next generation of the bigger firm.”

Hummel added that UWP plans to revisit equity portions for advisory teams on an annual basis to reward advisors based on their financial performance. UWP plans to sell itself to an institutional investor (most likely a private equity firm or asset manager) within the next three to five years. UWP intends to manage more than $5 billion up to $10 billion in assets at sale. A 75% super majority vote among equity holders will be required to sell.

“We’re trying to be advisor friendly. WAGN isn't going to walk in tomorrow and say all of you are going to go work for Goldman Sachs,” said Hummel. “We cannot force a sale under the way that we are going to set this up. We can't force the advisors as a group to sell.”

Goldman Sachs had acquired United Capital for $750 million in 2019, then sold that RIA in 2023 to Creative Planning. Creative Planning is among the largest RIA aggregators that Uniting Wealth Partners looks to challenge in the space. Other leading RIA aggregators include Edelman, Hightower, Focus Financial Partners, and the Canadian firm CI Financial, which sold last year to the Abu Dhabi sovereign wealth fund, Mubadala Capital, for $8.7 billion.

UWP’s software for advisors will be run through LibertyFi. Phoenix believes his firm’s RIA model can also be attractive to Commonwealth advisors who are now contemplating their future amid Commonwealth’s sale to the independent broker-dealer giant, LPL.

“We're in conversations with four Commonwealth teams now that are either thinking of joining Uniting Wealth or starting their own RIA,” said Phoenix.

“We feel that the IBD market is really broken. Commonwealth had an unbelievable culture created by Wayne Bloom, it was a boutique feel where the advisors really felt they had a say and were able to really create a unique environment for their clients. I truly believe that there's a lack of cultural fit between Commonwealth and LPL,” Phoenix said.