Ask most financial advisors about their clientele, and they will mention the word “families.”
That is only natural, as wealth issues are typically family issues: how to achieve long-term security and prosperity for family members; how to save for important family milestones, such as college, weddings or retirement; how to foster the right attitudes and values in children and grandchildren; and how to pass on and preserve wealth effectively for the next generation.
For some advisors, however, families aren’t only who they help, but who they are.
Many wealth management teams are intra-family practices, and that doesn’t always mean father and son. Today’s shingles are just as likely to feature the names of mother-son, mother-daughter or brother-brother teams, among others.
A Changing World
As trends in wealth management continue to upend the established order, bringing innovation, competition and transparency, intra-family wealth practices may wonder how a move to independence could affect their own family businesses.
Two teams within the Dynasty Financial Partners network, Concentus Wealth Advisors and Omnia Family Wealth, shared their insights and experiences about this key transition in their personal and professional lives.
Concentus Wealth Advisors of King of Prussia, Pa., understands the challenges and opportunities that high-net-worth families face.
Founded by Gerald “Zeke” Strid in 1984, the team is now co-led by sons Erik and Paul Strid and includes five other team members. After a combined three decades with Merrill Lynch and Wells Fargo, the team launched Concentus Wealth Advisors in February 2014 as an independent investment advisory firm.
For the Strids, the move to independence intensified their ability to operate a family-focused firm.
“We treat our clients like family, and we also treat our colleagues that way,” Erik Strid says.
“For us, the ability to build a family wealth practice, infusing that relationship in all that we do, was an appealing aspect to launching our own firm,” he says. “There’s a family vibe in all that we do.”
That authenticity heightens their natural affinity with clients, many of whom operate or have sold their own family businesses.
“We know firsthand the unique advantages and challenges that come with family businesses,” Erik Strid says.
“Sometimes it’s odd to make business decisions with the same person you battled for the Captain Crunch when you were 10, but there’s also an environment of trust, loyalty and intimacy that is irreplaceable,” he says. “We help clients effectively navigate that dynamic because we live it ourselves.”
For Steven and Michael Wagner, father-and-son co-founders of Omnia Family Wealth in Aventura, Fla., true independence allowed them to connect with their clients on a deeper level. A five-person team, Omnia Family Wealth launched in September, moving from the private banking and investment group at Merrill Lynch and previously, UBS, where Steven founded the team more than 25 years ago.
Omnia Family Wealth offers a suite of strategies and services to ultrahigh-net-worth families, many of whom own or have owned a privately held business.
“We can relate to clients in a whole new way now, being on the same side of the table as business owners,” Michael Wagner says.
“Entrepreneurs understand our motivation and our deliberation,” he says. “When we launched Omnia, a number of clients told us they were proud of us; they could tell we put a lot of work and thought into the decision.”
As someone with an “entrepreneurial streak,” Erik Strid dreamed of going independent for a long time, craving the flexibility to bring clients the best solutions and services available, unfettered by the constraints of a single-firm platform.
“The large firms have to approach their based on the lowest common denominator,” he says. “We wanted to be free from that mindset, exploring a wider range of options for our clients and their families.”
That same desire is echoed by Michael Wagner, who underscores the customized nature of their approach.
“We work with a very specific set of clients; the large firms have to create businesses that can appeal to many types of clients,” he says. “By going independent, we have been able to uniquely tailor our business based on client needs, from technology, to reporting, to a choice of custodians.”
A New Mindset
In assessing the move to independence, Strid and Wagner not only point to what they could do but how they could do it.
“There is a culture of ownership in our firm now. Our employees can participate in that ownership through company stock,” Erik Strid says. “As a result, our team is more engaged in our collective success.”
Independence also conferred important autonomy for dynastic planning and compensation strategies, untethering the practice from a dependence on the vagaries of a wirehouse stock.
“Now, the equity we are building is our own. We are no longer tied to ups and downs of a stock ticker,” Erik Strid says.
Michael Wagner notes that independence has generated a spirit of innovation that suffuses all that his team does.
“We’re constantly asking ourselves if this is the best way to do things,” he says. “We’re not afraid to question how things are done so that we can bring new resources and opportunities to clients.”
Wagner also says that ownership allows the team to build true equity in the practice, an appealing feature for their own long-term planning.
Words of Wisdom
When asked what advice he would share with other family wealth practices, he encourages advisors to speak with peers who have made the transition to independence.
“As advisors, we constantly counsel people to strip out the emotion within a decision and boil it down to its logic,” Wagner says.
“I’d encourage advisors to take a long, hard look at their options,” he says. “I found it to be a welcoming and open community willing to share their experiences.”
Erik Strid also stresses the importance of sound advice.
“Your practice is going to change in a million different ways, and it can be daunting,” he says. “Having an experienced partner to give you support and confidence is essential.”
Reflecting on his own career path, Erik Strid says that “professionally, the move to independence was one of the happiest days of my life,” an observation that spurs him to offer some advice: “To other advisors, I’d say, ‘Do it now. Do it yesterday.’”
Timothy Bello is head of network development at Dynasty Financial Partners in New York.
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