When looking into the professional moves financial advisors are making to start their own businesses, the Denver Business Journal spoke with Cardan Capital Partners co-founders Marti Awad and Matt Papazian. From the report:
“When financial adviser Marti Awad sits down with a client, she has autonomy in her work. She doesn’t feel pressure to sell products to her client that they don’t want or need. And she acts as a fiduciary, meaning she puts her client’s interests first.
“For all those reasons, she joined three other financial advisers and walked out of the big New York-based Bank of America Merrill Lynch a year and a half ago to start their own firm, Cardan Capital Partners in Denver. The four partners — Awad, Matthew Papazian, Ross Fox and Sarah Keys — took with them about $640 million in assets under management.
“‘Merrill Lynch is a huge organization with (about) 15,000 financial advisers; they have to gear the services offered to the whole range – the skill set – of more than 15,000 people,’ Awad said. ‘We like to work more closely with our clients; we like to provide more analysis that we would not have been able to provide at Merrill Lynch.’
“Since the financial crisis of 2008-2009, financial advisers have been leaving the big wirehouses for independent firms or to start their own firms, not in droves, but in substantial numbers – enough to take a bigger slice of the market share pie.
“Global analytics firm Cerulli Associates says the independent registered investments advisers group grew assets in 2015 at a faster rate than any other group, including the wirehouses. Cerulli projects that registered independent advisers and a hybrid RIA combined will increase their asset market share from 23 percent in 2015 to 28 percent in 2020. In 2015, wirehouse asset base shrank by 1.9 percent.”
Also from the report is this perspective from Matt:
“’The reality is now our agenda is taking care of our clients,’ he said. ‘Whereas the bigger firms, they do have an implicit agenda, and I think clients get that even if they don’t verbalize it.’
“Papazian believes the smaller, independent firms, like his, attract independent thinkers. Their sweet spot is clients who are entrepreneurs, C-level executives, foundations and non-profits with roughly between $3.5 million to tens of millions in assets.
“‘Before we broke — the people we talked to, and I did not believe this for one second, I was skeptical – said you will get more referrals once you are out of the big firm. And that is 100 percent true.’”
Find more, visit the Denver Business Journal.