CEO of Purpose Advisor Solutions shares how breakaways benefit from having a higher-conviction practice
Many firms may just say that their success is tied to their customers’ success, but for Purpose Advisor Solutions (PAS), that is an absolute truth. And that’s borne out by a consistent trend of growth acceleration the firm sees from the newly independent advisors it works with.
“Across our business, we’ve consistently seen that after 90 days, growth starts to accelerate with firms,” says Jeff Gans, president and CEO of PAS. “And it's because of three things.”
The first key factor, Gans says, is how the firm has by that point taken the time to reassess their practice and optimize it for growth. Once they’ve improved processes and squeezed out capacity, they have more of an opportunity to invest in expanding their business.
The second is a matter of motivation. As the owners of their own business, he says independent advisors have more conviction in what it does and what it stands for. That conviction comes across in different aspects of their processes, whether it’s through more clearsighted management decisions or having policies that are in tighter alignment with the client’s interests. The upshot, he says, is more revenue generated from satisfied customers.
“The third reason we see growth is clients actually like the boutique approach. They like seeing something different,” Gans says. “You're able to really target your value proposition to your clients versus trying to match the bigger institution you were in. So when you do things right, you unlock growth in a way that really can actually be incredible for an advisor.”
According to Gans, it’s important for advisors to spend time upfront thinking about how they set their business up, as any early issues can have serious knock-on implications. Because of its extensive experience helping advisor teams through transitions, PAS is able to anticipate and sidestep many of those pitfalls.
“Well ahead of any transition, we make sure we’re right beside clients as they consider big questions around how to establish and structure their partnership. Are they a corporate entity? Where do they want to get registered?” said Marlo Kravetsky, General Counsel and Chief Risk Officer at PAS. “We also help them think through their big checklist and calendar of deliverables.”
PAS also helps firms create an initial draft of their compliance manuals, which they then iterate on depending on the firm’s specific processes. The PAS playbook also offers up guidance on AML and other policies and procedures, as well as training decks and additional updated training materials.
To help ensure their client firms are stable enough to make their own way, PAS provides support even well after the initial business setup. While they will have their own chief compliance officers and will be hiring on as they scale for more people, Kravetsky says firms will need experts who are comfortable and experienced enough to provide templates and act as a sounding board for different situations.
“It’s like a one-stop shop for transitioning firms that need guidance, but helping them be the best they can be,” she says.
Now, Gans says PAS is seeing advisors set up shop, get running, and getting their assets over in record time. Within 90 days of making the leap, entire teams are fully transitioned and back on the path of growth that every advisor ultimately wants to achieve. After committing to do something different, he says the breakaway advisors they work with quickly discover that there’s a well-trodden path to independence, and they’re not necessarily alone in walking it.
Compared to the U.S. market, Canada has a long way to go: Gans says registered independent advisors account for more than 30% of the wealth market there. But he adds that the U.S. experience shows how first movers are able to capture real economic value, as reflected in the price of early RIAs and the ability of others to roll out.
“Canada is just starting, but we're really starting to see it pick up pace,” Gans says. “It's incredible to see the ownership that advisors are taking on helping deliver a fantastic experience to their clients.”