Beverly Hills Wealth Management has launched an internal asset management division with the addition of the emerging McComsey Asset Management, with $30 million in assets under management, to help attract a greater number of breakaway brokers.

The BHWM partnership is somewhat unique in the advisory world. Many RIA firms outsource asset management of client portfolios and many asset managers -- which build specific portfolio strategies as opposed to an overall allocation – are often absorbed into banks and other financial institutions, says John Stuart, chief information officer of BHWM, with offices in California, Arizona, and Florida. The acquisition, Stuart says, is part of additional in-house services BHWM is offering in an effort to lure breakaways and attract the high-net worth market – something he anticipates seeing other RIAs do as well.

"When a breakaway broker starts their own shop as an RIA for example, the fees that an asset manager charges them are much higher than when they were at the wirehouse," Stuart says. The acquisition therefore is an effort to create economies of scale to lower asset manager fees, he says. “Breakaways see this as an opportunity to spend more time with their clients and less time in compliance, and research.”  

The recent McComsey acquisition puts the assets under management of BHWM north of $500 million.


Historically, many RIAs have elected to focus their internal capabilities on client management, financial planning and asset allocation, says Brian Lauzon, managing principal of Advisor Assist, a management consulting firm. Those that do so, are most likely to outsource the investment management function to third-party model portfolio providers.

Other RIAs, according to Lauzon, take an approach where they use some combination of mutual funds, ETFs and separate account managers and deploy client assets to each based on their in-house asset allocation models. This approach, according to Lauzon, means that the RIA is performing its own capital market research and manager due diligence, two capabilities that stretch beyond the skills and budgets of the majority of RIAs.

“Most RIAs cannot afford (or lack the skills) to build their own proprietary investment capabilities, yet wish to demonstrate an active approach to client portfolio management,” he says. “Their best path strategically for these firms is to focus on client management and acquisition and outsource investment management and asset allocation to an experienced third-party. I think this approach is a strong one, as it aligns day-to-day activities with the most experienced people for the job.”


Stuart, on the other hand, highlights a number of benefits of an in-house wealth management team, and why RIAs should consider them.

  • Next generation wealth management is about specialization. Having in-house institutional asset management capabilities helps advisors build better allocations and provide a means to better analyze outside investment options.
  • Affords a greater amount of time devoted to client relationships instead of monitoring portfolios.
  • In an independent RIA environment, dedicated asset management helps advisors to differentiate themselves by offering a distinguishing product .
  • The integration of in-house portfolio management provides transparency, efficiency and a high level of control in portfolio costs – which assists in maximizing the portfolio return for clients.
  • Embedding an asset manager in an independent RIA can provide a means to offer asset management capabilities at more competitive rates.
  • Dedicated asset management allows advisors to have a fundamentally better level of access to manager research, themes and due diligence capabilities.
  • Provides financial advisors an advantage in objectively positioning portfolios and the ability to optimize client allocations.

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