Every time a big acquisition deal goes down in another corner of the independent brokerage industry, the executives at
The bigger some of Arkadios' rivals like LPL Financial become, the greater the likelihood that some high-producing teams there will want to look for a more comfortable home at a smaller firm, according to director of corporate strategy Paul Pilcher. That, Pilcher said, is where boutique firms like his will see their greatest opportunities for growth in coming years.
Arkadios' latest recruitment deal, Pilcher said, is a case in point. The Atlanta-based independent broker-dealer firm announced Monday that it's bringing on Gulf Coast Wealth Management, a 15-member team that had managed roughly $850 million through its previous affiliation with LPL.
Pilcher noted that LPL's
The Gulf Coast team, which had been with LPL for more than 20 years, was looking for a partner who could concentrate on helping them achieve specific goals.
"They wanted to continue to go up market with the type of clients they served," Pilcher said. "So they wanted to be part of a much smaller community of advisors. They're looking for a more boutique product. They're looking for a much more white-glove operation and service experience."
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LPL didn't immediately respond to a request for comment. Mark Elzweig, an industry consultant and recruiter at the
He said he can understand why some teams might feel comfortable with a smaller partner but said there are advantages to staying at a large firm like LPL.
"Independence is a skinny margin business, and larger firms are often well positioned to make the investments in technology and compliance that the business requires," Elzweig said. "LPL has a variety of business models and advisors can choose the one that is right for them."
"The good thing," he added, "is that there's lots of choice."
That's not to say that Arkadios itself hasn't been growing quickly in recent years. Founded in 2016, the firm has come through
Many of the teams Arkadios has brought on
The firm now works with roughly 50 offices in 35 states. Although it tends to be concentrated in the Southeast and the East Coast, Arkadios is steadily building a national presence. Gulf Coast Wealth Management, for instance, has its headquarters in the New Orleans metropolitan area and offices in Baton Rouge and other parts of Louisiana.
Pilcher said he believes Arkadios' still relatively small size allows it to avoid one-size-fits-all approaches to priorities like regulatory compliance.
"It's just the nature of the beast. If you get bigger, you have to be more restrictive in what you can and can't offer, and you have to be much more boilerplate," Pilcher said. "It's not just with compliance but also with products and technology. When you're serving a bigger community, you have to be pretty rigid in what you can and can't do."
Pilcher said Arkadios advisory teams with everyone from the high net worth individuals Gulf Coast is pursuing to more mass affluent investors. He said Arkadios' hybrid structure — meaning it operates investment advisory and brokerage arms — furthers its ability to accommodate the needs and preferences of advisors and their clients.
Many investors prefer to simply use a fee based on their assets under management to pay advisors for managing their money. But with certain investment products, a one-time commission-generating sale through the firm's brokerage arm makes better sense, Pilcher said.
That might be the case, for instance, with various types of alternative investments. Many of these vehicles tie up money for years and can't be sold on a whim. So there is little reason to pay for active management using an ongoing advisory fee, Pilcher said.
"I think you can make a case that some illiquid products are better served to be done in a one-off transactional manner," he said. "But it's really a matter of client preference and advisor preference."
Jason King, wealth management director at Gulf Coast, said he and his team have spent the past two years considering where they might want to move.
"Arkadios' commitment to advisor independence, industry-leading technology and high-performance culture aligns with our mission to be the premier wealth management firm on the Gulf Coast," he said in a statement.
If mergers and acquisitions spell recruiting opportunities for Arkadios, the firm has had plenty of reason to be on the lookout for deals in recent years. The consulting and
So much industry disruption only stands to benefit a nimble firm like Arkadios, Pilcher said. He predicted Arkadios would be arranging several other large transitions over the summer and into next year.
"We can be just as effective for a guy for a one-man shop who manages $150 million of advisory assets as opposed to a firm like Gulf Coast that has close to a billion and has eight to 10 advisors on their platform," Pilcher said. "We are scalable, it's all bespoke technology, and it's going to allow our teams to flourish. And we are creating an environment where they can stay with us for, really, indefinitely."
