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Financial advisors looking to become independent typically spend a few months to a year planning their move. For a father-son team leaving UBS, the process took almost ten years.
Roy David Gutierrez and his son David Hale Gutierrez announced Nov. 7 the launch of its new registered investment advisory firm, Gutierrez Wealth Advisory of Little Rock, Arkansas. They were joined from UBS by client relations director Leighann Arthur and client relations associate Hillary Canterbury. The team has a total of nearly $1 billion in client assets, including $330 million in assets under management and an additional $625 million in pension plan assets under deliberation.
SEC filings show the company was asset to October 21. In addition to Arkansas, it is also licensed in Texas and Florida – the same markets their former employer UBS intends to target as wealthier families move South, according to a report by Reuters Last week.
Moving comes later UBS lost a $2.6 billion team to Wells Fargo last week, and a $1.7 billion team at RBC regional brokerage the week before. AdvisorHub reported UBS loss from a small pair of advisers in New Jersey, with about $700 million in assets under management, to Morgan Stanley last week. The Swiss bank has big plans for expand its footprint in the United States and acquiring ultra-rich specialists, as he did last month with a billion-dollar Morgan Stanley Rhode Island teambut it faces an uphill battle with its competitors.
The Gutierrez firm will focus on personalized advice for families and affluent individuals and advice on pensions, according to a press release. The services she will provide include financial planning and portfolio management, insurance and annuities, tax strategies, liability management, education funding, estate planning, charitable giving and services. personal bank accounts, according to website.
“We are well positioned to expand our wealth management services to Arkansas families and individuals, providing fiduciary advice and personalized solutions with a human touch,” David Gutierrez said in the press release. He said TruClarity, a consulting firm that specializes in helping advisors achieve independence, made the transition easier.
“Ridiculously thorough”
Louis Diamond, an industry recruiter at Diamond Consultants who also worked on the move, said in an interview that the level of thoroughness his client put into the transition was unusual.
About a decade ago, Gutierrez advisers contacted Diamond Consultants, Diamond said. “They did a due diligence, but at that point they couldn’t find anything that made sense to them. So they decided to stay, but even then it was about becoming independent.”
About two years ago, Diamond said, the advisers returned. “They were ridiculously thorough and very, very thoughtful before even considering the move and probably did the most due diligence of any band we’ve worked with, or thereabouts,” he said. declared.
He said advisers evaluated “a ton of different companies” when considering working with partners, and ultimately chose TruClarity as the platform provider and Fidelity Investments as the custodian.
Pamela Stross, CEO and President of TruClarity, agreed. “It was a very detail-oriented group, very attentive to what they wanted to do and what they wanted to create as a family legacy,” she said in an interview.
Diamond said departing advisors often have different timelines for making a jump. “Some people go very fast, and some people go very slow.” On average, however, “it’s probably four to six months for a team that just changed employers…it’s probably closer to a year for teams that go freelance,” he said. declared.
Likewise, Stross said it’s typical in his practice to see advisers take about three to nine months to become independent.
Own the complete ADV
TruClarity, which Stross founded in 2015, is one of many specialized companies that have been created to help advisors move over the past decade. TruClarity’s goal is to help advisors achieve fully independent status. “They wanted to have their own RIA registered with the SEC, rather than being a 1099 or affiliated with an RIA. They wanted to own their Form ADV and own the RIA,” Diamond explained of the reason for which Gutierrez chose TruClarity.
Advisors seeking independence from distribution centers moved with frequency close to record for much of this year.
“Every year we see more activity than … the year before,” Stross said. The pandemic “has caused advisers to wonder whether or not they want to stay in the larger wirehouse-like world or whether they actually want to go out there and start their own business.”
Stross described the process as one that starts “from scratch, with this [will] the pro forma looks like? What’s it going to look like for them financially?” Next comes the administrative stuff: developing a brand, designing a logo and website, marketing, selecting a office location and lease negotiation.
The hardest part is often real estate, followed by branding and marketing, Stross said.
“When an advisor tells us what their ideal space looks like, sometimes the hardest part can be finding that ideal space that matches what they want to see,” Stross said. They sometimes want “a certain type of building, or it’s a skyscraper, or a skyscraper in a certain part of town. And so the initial search might take a while, and then from there it goes further in the negotiation.”
Then there is the matter of building the tech stack. Advisors like the Gutierrez team have chosen independence because “they’re not beholden to someone else’s compliance program or their particular data stack,” Stross said.
Defer higher payload
The father-son dynamic of the advisory team was important in motivating the move, Diamond said, as the father, considering the estate, had ambitions for better long-term growth outside the confines of a house of brokerage of employers.
“Instead of just saying, ‘Hey, UBS is fine. It’s not the best, but I can just take the retirement plan,’ he was thinking much more broadly about what will be best for the company for many years. many years to come, and what’s best for his son,” Diamond said of father Roy Gutierrez’s thinking, adding that it’s not uncommon for father-son moves to happen this way. David, the son, took “the lead role” in coordinating the move, but he “obviously needed his dad’s energy and support, his enthusiasm,” Diamond said.
With talent bidding wars Having raged much of the past year in the wealth management industry, the Gutierrez team avoided a temptation: a big upfront paycheck at another company.
“If this team, instead of going freelance, had gone to Morgan Stanley, they would have gotten a 300+ percent recruiting deal and could have monetized the business right off the bat,” Diamond said. But these loans often have to be repaid over years, and the benefits of the business can accrue slowly, forcing many advisors to stick around. Asked if this was the case for them, the firm Gutierrez refused through a representative to answer.
“They weren’t paid a dollar to make the trip,” Diamond said. “And if there is a monetization event, it won’t be until they sell the business many, many years from now.”
The wait, however, could mean a higher payout from selling years of practice down the line.
“Generally, you need a longer time horizon before the economy makes sense” to leave, Diamond said.