Why We Chose Independence
After an exhaustive two-year due diligence process, we made the challenging decision to transition Consilio Wealth Advisors (CWA) to an independent Registered Investment Advisor (RIA). We interviewed with every major firm that wanted to recruit us, turned down large transition checks, demoed endless technology platforms, and sought the counsel from leading industry professionals. It wasn’t an easy decision, and one we battled with for months. Ultimately, we knew that the only way to deliver on the vision we had for CWA, was to become an independent firm.
It is our belief that every growing advisor should question if their current firm & team is the right place. The right place to serve their clients, for their growth & fulfillment as a professional, and for the well-being of their families. Your search will either cement your confidence in your current platform or lead you to a new opportunity – both are wins.
Our team summarized the primary reasons for our transition into the following four points:
1) Access to superior technology.
The technology available to financial advisors and their clients is changing at a rate never seen before. Independence gave us the freedom to implement those technologies, for the benefit of our team and clients.
Our team specializes in serving technology professionals with strong equity compensation, and we recognized that there were specialized technology tools that could allow us to provide greater value to our specific clientele.
In many firms, you are limited to the technology that they have approved. These firms invest a considerable amount of time & resources to research each item to ensure its value, security, and application across thousands of advisors. And if that technology doesn’t pass each hurdle they will restrict access, even if some advisor teams would benefit.
2) Ability to be a fee-based firm, and eliminate conflicts of interest.
Many financial advisors wear two hats – one as an “advisor”, the other as a “broker”.
The “advisor” hat is worn when advisors are compensated on a fee basis for providing financial planning advice or ongoing investment management. Their compensation is the same, regardless of the investments used in the portfolio (aka product agnostic).
The second hat is that of a “broker”, where the advisor is compensated through commissions and/or bonuses on the sale of a product. These products could be investments, insurance, annuities, etc. Many investors have heard of advisors having their Series 7 license, but in fact, this is a license to sell investment products, not to manage investments on a flat fee-basis.
The problem with this two hat setup is that the client never knows which hat their advisor is wearing. Are they giving unbiased advice, or trying to sell something?
At our prior firm, we were licensed to wear both hats. Despite the fact that commissions & bonuses represented less than 4% of top-line revenue, we recognized that the “broker” role presented a conflict of interest. We believe so strongly in the value of our team’s advice, that we never wanted a client to question our motives. As a result, we opted to become a fee-based firm, dropping all investment broker/dealer relationships.
When we told our clients that we were dropping our broker/dealer affiliation, many were overjoyed. They were already aware that our being licensed as a broker presented a conflict of interest, but they found value in our team’s advice and trusted us to work with them. Removing this conflict made the relationship even stronger.
Lastly, by eliminating a relationship with a large broker/dealer, we also eliminated the sales targets imposed on advisors. We are of course driven to grow, but hitting a sales quota shouldn’t be on the mind of your financial advisor as they’re providing recommendations to your family.
Unbiased, always.
3) Freedom to share our team’s expertise.
I am fortunate to work with really smart team members – scary smart. By making the leap to independence, we would now have the opportunity to share our team’s expertise with the marketplace through blogs, social media, podcasts, YouTube, etc. Most of which is not possible at large broker/dealers, due to compliance restrictions (read: managing to the lowest common denominator).
Our vision is to be the leading experts in financial planning for technology professionals; not necessarily the biggest firm, but the best at what we do. Create massive value.
4) Efficiency & innovation of our business structure.
Every advisory platform has the same basic needs – trading, compliance, cloud storage, client portal, etc. As the independent market has evolved, these resources have become more robust, readily available, and less expensive. New providers come online every year, and the value of their offerings is constantly improving.
Our team came to crossroads – we determined that we could replace every component of our previous advisory practice, for less money than we were paying, and have access to more valuable services for our team and clients. In fact, there would be sufficient financial resources remaining to hire new smart & passionate members onto the team – which is exactly what we did.
In closing, these are the reasons that worked for CWA. They won’t be justification for everyone. We believe there are smart & talented advisors at every single firm. Clients should hire people they trust to serve their family, and that goes much further than the firm name on their statement.
DISCLOSURES:
Consilio Wealth Advisors, LLC (“CWA”) is a registered investment advisor. Advisory services are only offered to clients or prospective clients where CWA and its representatives are properly licensed or exempt from licensure.
The information provided is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor's particular investment objectives, strategies, tax status or investment horizon. You should consult your attorney or tax advisor.
All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information and it should not be relied on as such.
