Mitch, a 25-year wirehouse veteran with $500 million in client assets in the Midwest, began considering his options for a move in 2008. He was tired of the bad press about his firm and other wirehouses and decided he was financially prepared to forgo a 300 percent incentive check; he liked the idea of independence.

On his own, Mitch began doing due diligence with several custodians to explore partnering with one of their existing RIAs. He had no interest in being distracted from his clients to set up his own firm; he wanted to stay focused on growth. But because of differences over economics, infrastructure, culture, or business mix, none of the firms he talked to seemed the right fit. He also realized he preferred to create his own brand. He then started talking about creating his own firm, but outsourcing the back- and middle- office work like technology, compliance and other operational functions to a third-party platform or service provider.

The Plan

With all of his other options exhausted, Mitch began discussions with Concert Wealth Management in San Jose, Calif.

The Model

Firms such as Concert Wealth Management, Washington Wealth Management and Dynasty Financial Partners have gained momentum in the last several years as more wirehouse advisors seek to go independent without the operational headaches associated with setting up and running an RIA. These firms are often referred to as “platform firms” because they essentially rent out their platforms to RIAs who want to use their back-office and compliance services.

The Meetings

Mitch knew that his time and skills were best focused on client-related activity, and he saw the tremendous value in outsourcing to a platform firm the process of creating the firm and operating the business. Not only would it allow him to brand himself and outsource the difficult stuff, he was also able to keep assets that were parked in certain investments not available through Concert at his wirehouse.

Key Differentiators - Why Mitch Chose Concert:

  • Ability to self-brand, own his clients, dictate the direction of his business and work in the best interest of clients.
  • Ability to use multiple custodians, which helps to negotiate competitive pricing.
  • Access to institutional-level capabilities including research and lending products that would not otherwise be available to a standalone independent advisor.
  • Provision of an office that was up and running for him before he started, and availability of support staff on the ground with him to assist with the transition.
  • Ability outsource all operations to the platform firm, and to have everything tailored to his specific needs, including furniture and office supplies.
  • Ability to build equity in his business.
  • Superior economics for himself and his clients.

The Wrap-Up

In January 2010, Mitch left his firm with his staff and formed a fee-only RIA through Concert. The transition went off seamlessly and Concert now provides back-office support as well as legal and compliance services. Mitch spends the majority of his time focusing exclusively on client needs. Since its inception, Mitch's firm has become one of the country's fastest growing advisory firms, seeing a substantial increase in assets under management. Mitch was able to capture clients and prospective clients who had lost confidence in his former firm and who embraced the idea that he could provide conflict-free advice.

The Lesson

Mitch had to get a better sense of the landscape of possibilities for independence before he could make a smart choice. He didn't know he wanted to create his own firm with back- and middle-office support until he started looking into it.


Mindy Diamond is president of Diamond Consultants of Chester, N.J., a nationally recognized boutique search and consulting firm in the financial services industry.