To stay ahead of market forces that are disrupting wealth management firms, an advisor who managed about $200 million at Wells Fargo left to open his own RIA.
"I passed up the paycheck," Jim Denholm III, says of wirehouse recruiting deals. "I paid back Wells Fargo some fairly large bonuses that hadn't vested. I did it because think this platform is best equipped to serve my clients."
Among the trends Denholm says he's striving to stay ahead of is the advent of new technologies that are transforming how services are delivered to clients.
"With 15,000 financial advisors, it's hard to change financial planning software. It's hard to change the day-to-day stuff," Denholm says.
RIAs increasingly have access to better technology, he says. Plus, they have more flexibility to adopt emerging digital tools.
Denholm, who opened IronBridge Private Wealth in Austin, Texas, also points to a lingering distrust of large Wall Street firms and fee compression as reasons for his move.
A Wells Fargo spokeswoman declined to comment.
The firm isn't the only one benefiting from a still strong breakaway movement.
'STRENGTH AND STABILITY'
Over a year-and-a-half Denholm dedicated mornings and evenings to doing research on custodians and other vendors to prepare for his move, he says.
"Frankly, I didn't think of starting my own RIA at first," he says.
But after a dozen years with Wells Fargo, the industry had changed. Once he decided to go the RIA route, Denholm says he narrowed the choices for a custodian down to Charles Schwab and Raymond James. He opted for the latter in part because he felt his transition from wirehouse to independent would be smoother.
"I think clients want a certain level of strength and stability with the firm that is holding their assets," he says.
Also joining Ironbridge are director of financial planning Gwen Henson and portfolio manager and private equity analyst Chad Karnes. The firm caters to business owners as well as real estate and private equity investors.
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Naureen Hassan says tools in development will make advisers "faster and smarter" in serving clients.
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The deciding factor might be ruthlessness.
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Those unwilling to embrace technology will be left behind, wealth management leaders warn.
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"Everything people thought was cool in 2014 is table stakes in 2017," said Kendra Thompson, head of Accenture’s global wealth management practice.
July 11
"I think those are niches that have not been very well served," he says. "These clients have a lot of non-liquid assets and they think about risk and return differently."
Clients also want a different kind of experience than what large firms are delivering, he adds.
"The larger firms want to create a Starbucks- or Amazon-type of brand loyalty. I think that works for certain things. For a checking or credit card account that works. But when you are talking about higher net worth … people don't talk about their dreams or fears with just anybody," he says.
"I don't think you can commoditize trust," Denholm adds.
