Financial Advisor IQ – Ex-Merrill Team Gets a Better Deal by Joining an Indie RIA
Q: Why did you leave Merrill?
A: We’d each been at Merrill Lynch for nearly 20 years, and over the course of time, we saw the industry evolving through the independent model. By moving to Snowden Lane, we were able to expand our capabilities in terms of products, technologies and services for our clients. On our new platform, each area has been greatly enhanced.
Q: Why now?
A: We started this process more than two years ago. In fact, we wanted to be fair and objective, so we started by looking at all of the major competitors to Merrill, including other wirehouses. But our sense that we needed to follow a more independent business model was confirmed rather quickly. We just couldn’t find everything we were looking for in terms of providing the best products and services to our clients as part of another wirehouse. So our search advanced and branched out to look at three other major independent RIAs as well as several independent broker-dealers.
Q: Did the fact that Snowden Lane was started by a group of ex-Merrill advisors influence your move?
A: It provided a level of trust, at least initially, because these were people we’d worked with in the past at Merrill Lynch. But what really swayed our decision was the level of service and the technology platform we could offer our clients. At Snowden Lane, we just have greater flexibility in who we can work with and what we can do to help our clients. Another plus is that somebody else doesn’t have to tell us how we’re going to split revenue among our team.
Q: Do you see any other advantages for your clients by your choosing the independent channel?
A: We’ve also got much greater flexibility in how we set up fee structures so that they’re customized for each high-net-worth client. And at Snowden, we can advise on assets held away at other financial institutions. We think that’s going to be a huge plus for our practice.
Q: How do you see your firm growing in the future?
A: Our practice has grown primarily from referrals. We see that continuing, but we should have more flexibility to divide our book by source. Our referrals tend to cluster around families, friends and colleagues. As each of these groups grows, we want to keep marketing to each cluster — which could include eight or nine who are interconnected as referral sources. So it’s not really a niche strategy. Instead, we like to keep it simple and build our business model around those clients who prove to be our best generators of referrals.
Q: What was the most difficult part of the move?
A: The move isn’t necessarily difficult, as much as time consuming. We’ve been putting in very long days. We’ve made sure to make ourselves available to clients whether we’re sitting at our desks or at our dining room tables. But Snowden Lane is helping to make sure everything goes smoothly by providing us with a four-person transition team.
Q: Has the move helped lower fees for your clients?
A: Our management fees for advisory services on the whole are largely the same. But over time, we believe that a greater breadth of products and services to choose from, by being a part of the independent channel, will prove beneficial to our clients.
Q: Has your compensation changed?
A: In Snowden Lane’s independent platform, we have the ability to manage our team’s own profit and loss statement, which has a direct impact on our compensation. We’ve also joined this firm as equity partners. So as the firm grows, the value of that investment should grow. But another important part of our move was getting a voice in our firm’s long-term growth plan and implementation of strategies to maintain a client-first culture.
Q: What suggestion would you give other advisors who are thinking about making a change?
A: The most important thing is to look across the entire wealth-management landscape. And do your due diligence — don’t rush the process. It’s critical to look at the long-term prospects for your practice and pick a business model that will help you move into the future, in terms of both servicing your clients and taking advantage of everything in the independent marketplace.
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