In this special edition, we take a journey to the Wealth Management Edge conference in beautiful Boca Raton, Florida. Today, we're tackling one of the most critical decisions a financial advisor has to make: the ownership structure of their business. Should they go captive, work at a wirehouse, or venture into the world of independence? We've got just the right guest to shed light on this subject and more.
Introducing Brad Smithy
We are thrilled to welcome Brad Smithy, a founding partner and head of Wealth Management at Elevation Point. With a commendable background of 32 years in the wirehouse world, Brad brings invaluable insights into the realm of financial advisement. Elevation Point, founded by Jim Dickson, represents a unique corporate RIA model. Their approach involves minority stakes in partner financial service firms, promoting full alignment and mutual benefit. This structure supports an environment where clients receive top-tier care and service.
The Road from Wirehouse to Independence
Brad discusses his transition from the traditional wirehouse world to the independent space, emphasizing both the hard work and ample rewards. A common misconception in the industry, according to Brad, was that independent advisors operated in small-scale or less prestigious settings. However, he's witnessed high-quality teams making successful transitions, thriving due to broader solutions and increased capacity to meet client needs.
The Role of Technology in the Transition
An essential element driving the shift towards independence is technology. Brad highlights how electronic transitions, as opposed to traditional, paper-heavy processes, have made movements significantly smoother. Moreover, independent advisors can rapidly integrate new technologies, akin to updating an app store. This flexibility allows them to remain on the cutting edge, adapting quickly to innovations — something typically slower for larger firms.
Considering Independence: Questions to Ask
For advisors contemplating the switch to independence, Brad suggests asking crucial questions:
- Are you prepared to be a business owner?
How does your current firm support or limit growth?- Are you ready to embrace technology to its fullest?
Understanding the flavors of independence, from being under a wirehouse umbrella to full autonomy, is vital. Elevation Point offers a middle-ground approach, blending the benefits of partnership with independent ownership.
The Impact of Technology on Day-to-Day Operations
Technology permeates all aspects of wealth management, from AI-driven solutions to efficient client communications. Brad notes that AI complements the personal touch advisors offer, enhancing problem diagnostics and operational efficiency, without replacing the essential human element.
Succession Planning in Wealth Management
With a forecast indicating that two-thirds of financial advisors may retire in the next seven years, succession planning becomes paramount. Brad encourages advisors to consider multi-generational planning, tapping into family involvement where possible, and emphasizes the importance of being vocal and proactive about one's succession plans to secure the best valuations and partnerships.
Conclusion
Our conversation with Brad Smithy provides a comprehensive look at the evolving landscape of wealth management. The move towards independence is driven by technology, entrepreneurial spirit, and a desire for alignment with clients' needs. As the industry shifts, the need for thoughtful succession planning and leveraging technology becomes increasingly critical.
Thank you for tuning in to this episode of Zephyr's Adjusted for Risk Podcast. Stay connected with us on our YouTube channel, Spotify, and LinkedIn, and don't forget to like, subscribe, and follow to stay updated. Have a great week ahead!