Aspiriant, the soon-to-be $10 billion mega-RIA based in Los Angeles and San Francisco, thinks long-term planning is a good idea. Really long-term planning — to the tune of 100 years.
"I talk to our management team about the responsibility we have to set the right foundation for the longevity that we are striving for," says Aspiriant CEO Rob Francais. "We want to be around for 100 years. We want to have our independence in 100 years."
To that end, Francais sometimes asks his colleagues to picture the firm one day with 100,000 employees and $1 trillion in AUM.
"It is really to open people up to a much bigger construct in their minds," he says. "We can only imagine what we could do for clients if we had that scale."
The goal is to become "a comprehensive national service firm," Francais explains, targeting a market of "affluent families."
EQUITY DISTRIBUTION KEY
This long-term vision is based on ever-increasing equity distribution.
Francais could have kept his own large stake in the company. But he transferred most of it to partners years ago so that the firm is not owned by any one actor. The firm now has 52 partners, one of the largest ownership groups in among all the country's largest RIAs.
By comparison, the longtime number No. 1 firm on Financial Planning's annual list of Top RIAs, Oxford Financial, has 21 managing principals.
"We've been skating towards this puck for 15 years and I feel like we've kind of arrived," Aspiriant CEO, Rob Francais says, of the firm's rapid growth plans and broad power sharing.
The unavoidable risk, of course, is that Francais himself could be dumped as CEO at any time, because he lacks a controlling stake, potentially upending these plans. But there is no sign that he has lost the confidence of his ever-increasing ranks of partners.
STANFORD MERGER ADDS $850 MILLION
The most recent additions are the five new partners set to join Aspiriant from Stanford Investment Group in Mountain View, California.
The Silicon Valley-based RIA manages $850 million in client assets. The deal will bring Aspiriant's assets to $10.4 billion by its close on Jan. 31.
Aspiriant merged with two other firms at the start of this year and plans to complete two more deals by the middle of next year, Francais says. The firm was founded in 2008 out of the merger between Quintile Wealth Management in Los Angles and Kochis Fitz in San Francisco.
'WE HAD CHOICES'
For its part, Stanford considered deals with a roll-up firm, a private equity firm and also looked at becoming an acquirer itself, before deciding on Aspiriant, CEO Helen Dietz says.
"We were at a point where we had choices," Dietz says, part of the second generation of owners of the firm that was founded in 1982. "We did not have to do this but we may have had to do this in five years or ten years."
By merging with Aspiriant, Stanford will get the "deep management" bench that Aspiriant has put together, she says.
After the close of next year's deals, Aspiriant should have 60 partners, Francais says.
CLOSING OUT BD BUSINESS
To prepare to join Aspiriant, Stanford Investment shut down the last vestiges of its broker-dealer roots to remove any lingering conflicts of interest, Dietz says.
"We had some 12b-1 fees from American Funds," she explains. "It was basically less than 1% of our business."
One of Stanford's clients – a woman who has acted as a mentor to Dietz – urged her to merge with Aspiriant, Dietz says. One of the woman's friends is a client of Aspiriant and thought the deal would be good for both firms, she adds.
'GIVING UP CONTROL IS A BIG THING'
"Giving up control is a big thing," Dietz says. "That's why a lot of deals don't happen because the founders aren't willing to give up control." Through the merger, all of Stanford Investment's partners will become Aspiriant employees. Dietz will become one of Aspiriant's directors of wealth management.
However, having been through a leadership transition before, Dietz says, she knew it was the right thing. "I am very happy," she says.
Unless Aspiriant decides to put the brakes on temporarily to digest the mergers already on its plate, Francais says he envisions more deals to come.
"We are open for business," he says, "and the industry has no shortage of talented firms that are beginning to understand what our growth strategy is."
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