Wirehouse Breakaways: This Might Be Your Next Big Option
Brokers who want to break away from their big firms have another option to choose from besides going fully independent or joining an RIA network. David A. Noyes & Co., the 110-year-old financial advisory firm, launched hybrid RIA and broker-dealer network Sanctuary Wealth Partners in May and is touting a new type of independence model.
Sanctuary is open to both advisors and brokers who want to go independent, according to Christopher Cooke, Indianapolis, Ind.-based partner and senior institutional consultant at Cooke Financial Group, which is part of the Noyes group and the first firm to be part of the Sanctuary network.
Founded in 1969, Cooke Financial Group has around 720 individual clients with around $2 billion in assets.
And two more advisory firms have joined Sanctuary since its launch.
Winthrop Capital Management, an Indianapolis-based RIA specializing in the management of model portfolios, equity, high-grade and high yield fixed income portfolios for institutions and private clients, joined in August. Winthrop, an employee-owned firm with nearly $1 billion in client assets, was founded in 2007 by Greg Hahn, its president and chief investment officer.
Cerulean Private Wealth Advisors, an Indianapolis-based private wealth advisory firm that provides financial planning and investment management strategies for high net worth individuals and their families, joined in September after being established that month. Before founding Cerulean, Mike Myers had been a financial advisor at Bank of America Merrill Lynch since 1998.
Cooke says Sanctuary offers its partners both worlds: the support of Noyes as the broker-dealer – including a range of wealth management solutions and products it can access because of the pooled resources – and the independence to build and expand their own practices.
Noyes, which currently has around 60 advisors and 110 employees, is “embarking on a very high growth path,” according to Cooke, which includes Sanctuary’s partnering with more brokers or advisors who want to become independent.
“It’s a very clear decision to change the trajectory of Noyes from being an older broker-dealer to a new RIA and broker-dealer hybrid that is modelled on partnered independence,” says Cooke, who owns a “portion” of Noyes. “We’re bringing in independent teams that affiliate through us and we will use our size and scale to make their lives better.”
Sanctuary aims to provide its partners with operational, compliance and clearing support; the access to a range of wealth management solutions and products; and the economies of scale that can help bring down business costs. Most of the brokers or advisors joining Sanctuary will get either “their own a little piece of Noyes,” referring to some equity, or a profit interest in the group, according to Cooke.
“If you are completely independent, you have to do payroll, accounting, compliance, some investment banking, products, and on every one of those things, you can buy it more efficiently within a network,” Cooke says. “For example, we hire an accountant to do the books for all [the partner firms]. We help run all these lines of businesses. We create an ecosystem where all these things are solved for them.”
When asked what would be the selling point of Sanctuary over other networks, Cooke points to the differences in what the various business “aggregators” do.
“For example, Dynasty [Financial Partners] might help you set up and get a portion of your fees to set up. But at year two or three they cease to offer new things,” Cooke says. “There are other places where you can go be independent and get clearing – like a Raymond James – but they don’t help provide other services like doing your payroll and other things that we think are valuable.”
When FA-IQ reached out to Dynasty, a spokeswoman for the firm stressed its standing as a “market leader in providing supported independence in the high-end RIA space with an eight-year track record of proven success.”
Dynasty currently has 47 advisory firms with more than $30 billion in client assets on its network.
The spokeswoman says Dynasty’s consulting and practice management business, customized capital solutions, M&A programs, proprietary technology, industry connectivity, middle and back office support allow advisors to spend more time with clients and build better businesses.
“One of Dynasty’s fastest-growing businesses is with already independent RIAs who are coming to Dynasty to outsource various needs to help drive scale with third party vendors, minimize staffing needs, gain value expertise and capital, while freeing up time to grow both revenue and margins in their respective RIA business,” she says. “We are the RIA’s growth partner and very much an extension of their team.”
FA-IQ also reached out to Raymond James but didn’t receive a reply as of this writing.