I took my ankle bracelet off when I became an RIA, says CEO

Brett Bernstein, chief executive officer and co-founder of XML Financial Group, attests one of the things that makes him unique in the advisory space is not just being an entrepreneur but also being CEO and an active advisor at his Bethesda, Maryland-based firm.

“I joke but I was at Merrill Lynch, and I was in jail. When I was at LPL, I was at a halfway house. And then I took my ankle bracelet off when I became an RIA. So as a leader of the firm, I can say number one, I've been on all three platforms,” he says.

While there's plenty of others in the industry who share the same skill set as Bernstein, what he says he brings to the table is “the vast experience that someone can say, ‘You get what I'm going through’.”

Bernstein lays it flat out on the table. “I'm authentically me. I'm an honest person and I'm a straight shooter. Some people may not always like that, but I'm not going to sugarcoat things.”

Indeed, this is what has helped him succeed in managing almost $4 billion in client assets with the firm’s partner, Focus Financial Partners and undertaking significant M&A activity - the latest merger was with Samson Wealth Management Group, a Pennsylvania-based firm.

Bernstein admits having a partner like Focus has also helped not only find opportunities, whether it's hiring an advisor or doing M&A activity, but it allows XML “to have that experience to grow.”

“The collaboration across the partnership is amazing because we share with each other and we collaborate on how we can help people,” Bernstein says. “The industry, like any industry that's regulated is changing, and it's changing faster than I've ever seen. But it wouldn't matter where we worked. What I like is that I get to be creative.”

Creative to Bernstein is not just getting to just help clients but getting to help the firm’s team. He says he enjoys being an entrepreneur, having the ability to hire and attract young talent and help them grow.

“I can help a senior advisor phase into retirement and transition their clients. I like that I can acquire firms that are looking for a succession plan. It allows me, as a leader of the firm, to have different facets to my career. I still enjoy working with clients, it just has opened up a different breadth of things.”

Bernstein often jokes that XML stands for Ex-Merrill Lynch, where Bernstein came from before forming XML in 2004 with partner Rob Kantor. The decision to leave Merrill to go independent came from “wondering if the grass was greener”.

“We decided that if we wanted to have total independence, if we want didn't want to have proprietary products, if we didn't want to have a conflict of interest between a research department and an investment banking arm, and if we wanted to have a little bit more of an entrepreneurial spirit, then we couldn’t be with a big bank or brokerage firm,” said Bernstein, who noted their custodian of choice at the time was LPL.

For those who are considering making the same move, Bernstein provides his two cents saying, “you have to really decide if you're going to go independent. There's a lot [to consider]. Costs, time, the resources, the compliance, cybersecurity. Do you understand what it means to do it on your own?”

Bernstein is quick to point to his own strategy of partnership as an alternative.

“You can partner up, and maybe you can plug into something. You don't have to reinvent the wheel,” said Bernstein. “If you're going independent, understand all the different options that are out there before you jump in and say, ‘I can just become independent because the grass isn't always greener.’ People don't always understand. You don’t know what you don’t know.”

Name: Brett Bernstein
Position: CEO and co-founder
Company: XML Financial Group
Founded: 2004 (rebranded in 2016)
AUM (with affiliated broker dealer): Nearing $4 billion in client assets