John Phoenix, Partner at Wealth Advisor Growth Network, joined Julie Cooling, Founder and CEO of RIA Channel, to discuss how his experience as an advisor can assist advisors with their break away or succession planning.
Wealth Advisor Growth Network (WAGN) seeks to interact with advisors who desire to grow or break away. Different than other consultants, WAGN will invest in the businesses of advisors that want to grow inorganically. Over the last six years, WAGN has supported 18 advisors. The firm primarily works with advisors leaving broker-dealers or independent broker-dealers. Other advisors have taken the step to work with an intermediary. Some advisors join the network to prepare to sell their business in the next ten years.
As an advisor, Phoenix understands the difficulties of finding new clients and the pain points of operating an advisory firm. Many consulting or private equity firms seeking to invest in advisory firms do not have experience as financial advisors.
Phoenix is very familiar with technology from his time at Envestnet, where he learned to reduce costs and increase margins through the use of technology. Margins at advisory firms can expand when technology is deployed to perform tasks that were previously handled by more expensive personnel. Tasks that can be outsourced or automated include trading, billing, compliance, operations, payroll, and benefits. Advisors make the most money when their people are focused on client-facing activities.
WAGN uses an outsourced CFO who benchmarks the performance of advisory firms through metrics such as revenue per employee. WAGN’s performance on this metric is far stronger than the industry average, at $700,000 relative to $300,000, respectively.
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