A reconfigured advisory firm is gambling that LPL Financial will help it attract an "overlooked" class of wirehouse advisor: smaller ones.
"We are in a very interesting industry where people who are doing $250,000 in revenues are considered by the wirehouse communities as throwaway businesses," says Kurt Rozman, founder and president of Freedom Wealth Alliance in Brookfield, Wis. "I think those are people who are doing an important service."
By switching to the platform run by the nation's largest independent broker-dealer, Rozman says he can convince wirehouse advisors with $250,000 to $800,000 in revenue to switch shops, though he aims to take advisors with $1 million in revenues and up as well.
In the lower range, Rozman says, "There are a lot of people who need a different support structure."
RECONFIGURING A PRACTICE
Rozman morphed his longtime firm, Rozman Wealth Management, into Freedom Wealth in order to try to offer such a structure, he says. The existing firm had five advisors and $225 million in assets under management, although two new breakaway advisors are in the process of joining the firm this week, Rozman says.
In general, the firm is seeking advisors with approximately $50 million in AUM. Rozman aims to offer them comprehensive practice management support, including centralized back- and middle-office operations, automated and turnkey marketing systems and succession planning.
The new group also intends to offer a centralized portfolio management strategy that can be highly customized for each advisor's clients. Rozman is a veteran advisor and portfolio manager, according to a release announcing the Freedom Wealth move.
3 LEVELS FOR ADVISORS
Breakaways can affiliate with the firm at three different levels, Rozman says: The smallest advisors, who need the most support, can join as full-time employees; planners with midsize practices can come on as 1099-based contractors and get less intensive support from the home office; and advisors with as much as $1 million in production who wish to retain their own brand and offices -- and perhaps maintain their own RIA -- will likely join as independent affiliates.
That last group of larger advisors, Rozman says, "can roll in under our RIA in a completely separate location. We will do all the compliance and we will assist them with marketing."
At all levels, he says, his firm is looking for a good fit.
"We are not looking for advisors who are looking to be stock jockeys," Rozman says. The right advisors need to believe in "a long-term relationship with the client, and in high-quality money management."
The group is currently planning to expand its operations into several new locations, including Wake Forest, Ill., and several Sun Belt spots: Tampa, Naples and Sarasota, Fla., and locations in Texas and Arizona.
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