PLANADVISER - September/October 2018 - 29

do the everyday 'blocking and tackling' of our business; our
team can do that. We work on the strategy of our business. "
When FiduciaryVest started, Jones played a very handson
role. " Now, my role is primarily in letting go of things
over time, so that my time can be better spent on client relationships, "
he says. " The name of the game in this business
is being able to leverage yourself and your time. You learn
that you want to hire great people, but great people expect
to have growth opportunities, so you have to continuously
create those opportunities for people. "
Cue the Aggregators
For independent advisers who successfully
build a team, at some point it
makes sense to evaluate whether to
align with an advisory firm aggregator.
" That's something you keep revisiting, "
says Jones, adding that FiduciaryVest
has been completely independent since
its 2005 founding. " The benefit of an
affiliation is that you look much bigger
than you actually are; you've got a
depth of resources, and you maybe have
a little less risk. But by remaining independent,
we control our own upside,
and there's more of a direct payoff for
wins. We also have more direct control
over our business. "
Independent
advisers
currently
White says. " To be in the game now, you need to have so
much 'skin' as an adviser, " he says. " I think that even large
independent advisers will need to be part of an aggregator to
have the necessary efficiencies, brand, back-office support
and ability to integrate new lines of business. If not, you
just can't compete on the basis of your brand or your scale:
You're one lonely shop, going against a massive company. "
Evaluating whether to align with an aggregator is both
" We find that
a right-brain and left-brain decision for an adviser, Darian
says. It's about a cultural and personality fit, and also about
bottom-line realities such as daily workloads, the long-term
financial payoff and, ultimately, buying
into the broader vision of another firm.
Certain aggregators acquire an
most providers
in the industry
are not very
flexible when it
comes to work/
life balance.
We're a familyhave
a major catalyst for evaluating
their aggregator options, Cullen says:
the now-defunct revised Department
of Labor (DOL) fiduciary rule. " It may
have been blown up by the courts, but
the legacy is still there. For the very
first time in our industry, we have an
educated buyer, " he says. " CFOs [chief
financial officers] and HR [human resource] managers now
know who they should hire and who they shouldn't hire. And
they know they're not displacing much of their risk if the
company they're displacing it to is a small organization. "
The largest end of the retirement plan consulting busifirst
culture, and
word of that has
gotten around
the industry. "
adviser's business and provide heavy
support, and others have a membership
model in which the adviser remains
independent and gets help running the
business more efficiently.
"" Ask yourself, 'Do I want to continue
building a business?' " Darian suggests.
" 'How much independence and control
do I want to maintain?' If you decide to
sell your practice to a large aggregator,
such as CAPTRUST, that acquires practices,
you have to accept that they've
built an effective and efficient centralized
model that works well, and it
handles things such as fund reviews
and creating reports. You give up a little
control, and you focus on client relationships
and selling. " Other firms, such
as HUB International Ltd., " will buy
your business and then leave you alone, "
he says. " It doesn't change anything,
except it will provide you with some
tools and services. "
Advisers who want to stay independent can affiliate with
a membership-based aggregator such as GRP, which also
will provide tools and services-e.g., relating to participant
wellness and fee benchmarking-and investment research.
For the founding adviser, when his firm starts to see real
ness-the national firms that work mostly with mega
plans-already has consolidated, says Dick Darian, a partner
at Wise Rhino Group, a consulting firm in Mount Pleasant,
South Carolina, that works with advisory firms to increase
their enterprise value. " If you look at independent advisory
firms, it's still very much a cottage industry, " he says. " That
cottage industry is the last part of the DC [defined contribution]
space that is going to consolidate. "
Anything that can be scaled in this space will be, Darian
predicts. " Plan sponsors are asking all vendors, especially
advisers, to do more for less. Aggregators give these advisers
the ability to provide more services for a lower price, " he
says. " If you're an independent adviser trying to compete for
business now, you're feeling the pressure of the scale of the
larger firms. "
The marketplace's evolution and increasing fiduciary
focus make it harder for an independent adviser to compete,
success, " it becomes a lot more about managing the business,
versus doing what he really loves, " White says. " If you
talk to successful independent advisers around the country,
they all say the same thing: 'I want to get out of the day-today
running of this business. I want to focus on helping plan
sponsors and participants, which is what I love to do.' "
Strategic Retirement Partners has
several different
models as an aggregator, and Cullen says each tends to
appeal to advisers of different ages and with a different
practice size. " We have an acquisition model, we have a
50-50 partnership model, and we have an affiliation model, "
he says. Someone in his 40s may prefer an affiliation or
partnership, and someone in his 50s may prefer an acquisition.
" Our goal was to simply attract the best advisers-and
the best advisers are at different stages of their career, " he
says. " We wanted a model that would be flexible enough to
fit with where they are in their career. " -Judy Ward
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PLANADVISER - September/October 2018

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