Financial advisors looking to go independent usually spend anywhere from a few months to a year planning their move. For one father-son team leaving UBS, it's been a nearly decade-long process.
SEC records show that the firm was
The move comes after
The Gutierrez firm will focus on custom advice for affluent families and individuals and consulting on retirement plans, according to a press release. Services it will offer include financial planning and portfolio management, insurance and annuities, tax strategies, liability management, education funding, estate planning, charitable giving and personal banking, according to the firm's
"We're positioned to expand our wealth management services to families and individuals across Arkansas, providing fiduciary guidance and custom solutions with a human touch," said David Gutierrez in the press release. He said thatTruClarity, a consulting firm that specializes in helping advisors achieve independence, facilitated the transition.
'Ridiculously thorough'
Louis Diamond, an industry recruiter at Diamond Consultants who also worked on the move, said in an interview that the level of thoroughness his client put into the transition was unusual.
Roughly a decade ago, the Gutierrez advisors reached out to Diamond Consultants, Diamond said. "They did a run of due diligence, but at that time, didn't find anything that was making sense to them. So they decided to stay, but even then it was all about going independent."
Around two years ago, Diamond said, the advisors returned. "They were ridiculously thorough and very, very thoughtful about even considering the move and did probably the most due diligence of any group that we've worked with, or just about," he said.
He said the advisors assessed "a ton of different firms" when considering partners to work with, and ultimately chose TruClarity as their platform provider and Fidelity Investments as a custodian.
Pamela Stross, the CEO and president of TruClarity, agreed. "This was a group that was very detail-oriented, very thoughtful about what they wanted to do and what they wanted to create as a family legacy," she said in an interview.
Diamond said that departing advisors often have different timelines for making a leap. "Some people go really quick, and some people go really slow." On average, though, "it's probably four to six months for a team that is just moving between employers … it's probably closer to a year for teams that are going independent," he said.
Similarly, Stross said it was typical in her practice to see advisors take around three to nine months to go independent.
Owning the full ADV
TruClarity, which Stross founded in 2015, is one of many specialist businesses that have been created to help advisors move over the past decade. TruClarity's focus is helping advisors achieve full independent status. "They wanted to have their own SEC registered RIA, versus being a 1099 or affiliating with an RIA. They wanted to own their Form ADV and to own the RIA," Diamond said of why Gutierrez chose TruClarity.
Advisors seeking independence from wirehouses have been moving with
"Every year we see more activity than … from the year before," Stross said. The pandemic "made advisors think about whether or not they want to stay in the larger wirehouse-type world or they want to actually go out there and create their own firm."
Stross described the process as one that starts "right from scratch, with what [will] the pro forma look like? What's it going to look like for them from a financial standpoint?" Next comes the administrative points: developing a brand, logo and website design, marketing, selecting an office location and negotiating on a lease.
The toughest part is often with real estate, followed by branding and marketing, Stross said.
"When an advisor tells us what their ideal space looks like, sometimes the hardest part can be finding that ideal space that is what they want to see," Stross said. They sometimes want "a certain type of building, or it's a high rise, or a low rise in a certain part of the city. And so the initial search can take some time, and then from there it goes more into the negotiation."
Then there's the question of building out the tech stack. Advisors like the Gutierrez team chose independence because "they're not beholden to somebody else's compliance program, or to their particular data stack," Stross said.
Deferring a higher payload
The father-son dynamic of the advisor team was important in motivating the move, Diamond said, because the father, contemplating succession, had ambitions for better, long-term growth outside the confines of an employer brokerage.
"Instead of just saying, 'Hey, UBS is fine. It's not the best, but I can just take the retirement plan,' he was thinking much broader about what's going to be best for the business for many years to come, and what's best for his son," Diamond said of father Roy Gutierrez's thinking, adding that it was not uncommon for father-son moves to happen this way. David, the son, took "the lead role" in coordinating the move, but he "obviously needed his dad's energy and support, enthusiasm," Diamond said.
With
"If this team, instead of going independent, went to Morgan Stanley, it would have gotten a 300% plus recruiting deal and been able to monetize the business upfront," Diamond said. But such loans often need to be paid off over years and company benefits can vest slowly, keeping many advisors locked in place. Asked about whether this was the case for them, the Gutierrez firm declined through a representative to respond.
"They didn't get paid a dollar to make the move," Diamond said. "And if there is a monetization event, it won't be until they sell the business many, many years from now."
The wait could mean a higher payout from selling the practice years down the line, though.
"Typically you need a longer term time horizon before the economics make sense" to leave, Diamond said.
