Abundance of Retiring Advisors Means Growth Opportunities

Tell me more about the opportunities for RIAs or hybrid advisors?

It’s absolutely the best time ever to be in the financial services space because of, No. 1, the industry consolidation we’ve seen: In the last 13 years, 40% of broker-dealers have gone away.

So we have an ever-changing environment of how advisors affiliate.

No. 2: There’s a bigger need than ever for financial advice: 10,000 baby boomers turn 65 every day. And, according to a recent Cerulli [Associates] survey, clients are more willing than ever to pay for financial advice. 

Then you throw in what makes it a perfect storm: One-third of advisors are going to retire in the next 10 years.

Is there still a trend of breakaway brokers from wirehouses?

A huge trend. They become independent from the things at the wirehouse they didn’t want and as an independent, have better control of their economics and more control and flexibility [in running their practice].

But the cost of that is that they have to do everything on their own — and they don’t have a lot of time to do it.

So many of them are less independent in many areas than they were at the wirehouse, where they could dedicate all their time to serving the clients.

What are some things they have to deal with once independent?

Especially if they’re RIAs, they have to deal with compliance and testing it, and of course technology, dealing with staff, marketing.

In many cases, they’ve had no experience doing these things, and they’re also not very good at them, though they [may be] great advisors.

We’ll continue to see a shift of advisors finding a home where they can get the independence they want — but they’re trying to find the right level of support.

Broadly, what does your firm provide?

Front- and middle-office resources. Those have the biggest effect on the advisor’s business. Things like front-end technology, marketing functions including branding.

About two-thirds of our advisors are under our Gateway Financial Partners brand. This creates the public perception that they’re much larger than they are.

We do all the HR functions, and we have a virtual admin program.

If you’re a solo advisor or a small ensemble shop, you don’t need full-time people for doing social media, client experience or marketing. But you still need those resources.

We collaborate with people that specialize in them. On a very cost-effective basis, we give the advisor a lot more scale than they can ordinarily get on their own.

What do advisors need help with the most?

Taking away non-revenue-producing activities, which can [vary]. For some, it might be technology. For others, it might be HR because they don’t want to deal with some of the staffing issues.

What are the advantages and benefits of your equity alignment program, The Gateway Growth Partnership.

About 60 of our employees and financial advisors have an equity interest in the organization. That makes a big difference in how we all work together as a firm.

Our program is a lot less restrictive than some offered by other firms. We give the advisors a lot of flexibility to continue to own their business and run their practice the way they want to with our help.

Partnering with an organization like ours gives them a lot more scale instantly.