Fiduciary Team Leaves Wells Fargo's FiNet for Greater Freedom
After more than six years using Wells Fargo Advisors’ independent network, FiNet, advisor Michael Eddy left in August to form his own RIA. The firm, Berkeley Capital Partners, now manages more than $400 million. The Norcross, Ga.-based wealth-management shop has hired Triad Advisors as its broker-dealer and Schwab for custodial and other back-office services.
Q: Why did you feel a need to switch affiliations?
A: When I left with four other ex–Smith Barney advisors in early 2009 to affiliate with FiNet, we were really looking for a more independent route. We wanted to be in a better position to separate ourselves from the mother firm and our clients. So as our practice’s managing partner, my focus was on making as smooth a transition from the wirehouse environment, and eliminating as many conflicts of interest, as possible. FiNet appeared to be an attractive way to go.
Q: What did you learn along the way?
A: We were really searching for a greater level of independence than what FiNet wound up offering. In managing clients’ money, we wanted a platform with no restrictions. For example, using their discretionary investment platform, we couldn’t easily buy foreign debt denominated in foreign currencies. Another issue was that we had limited availability of options strategies to use in client accounts, which we believe are good tools to help provide downside protection when market volatility picks up. Those types of limitations made sense from a big financial institution’s compliance point of view. But for us, it limited how we could manage money.
Q: Do you have more technology alternatives available to you these days?
A: Yes, we’re now able to take more of an open-architecture approach with access to a broader set of financial-planning packages outside what was made available to us at FiNet. For example, we’ve decided to adopt MoneyGuidePro as our core planning package. We’ve also upgraded our transactional software. We don’t trade a lot — but when we’ve got to make changes across several different accounts at a time, we’re able to take advantage now of a very nimble and sophisticated system through Tamarac.
Q: Besides trading, what other types of software are you using now?
A: We’re using Salesforce as our CRM system. It’s made our practice so much more efficient, and it’s mobile friendly. That’s very important since as a 64-year-old longtime advisor, technology isn’t necessarily my strong suite. I pay my staff a lot of money to figure these sorts of things out, and they’re very excited about the best-of-breed platform we’ve been able to put together. With this new package, I can manage contacts and store client notes very easily. With other systems — I’ve struggled to even use them, because nothing was very intuitive.
Q: How did your fiduciary roles change?
A: We’ve hung our hat on the belief that a more knowledgeable client makes for a better client. I feel strongly that a big part of my role as an advisor is to help educate people and point them to interesting articles. We’ve found that the better equipped clients are to talk about things like risk-tolerance levels and potential black-swan events, the better chance they’ll have at achieving their financial goals.
Q: How does that relate to working as an independent?
A: I’ve spent entire days writing special reports on particularly timely investment or planning issues, expecting to be able to post them on our website right away. But it can take weeks — or, they might not even get approved at all — at a big Wall Street firm. So I had to learn how to write around those restrictions, which left me feeling like we weren’t able to be totally transparent with our clients. We had our own website, but basically we were limited by the same controls as bank employees faced.
Q: What would you recommend to an advisor considering breaking away?
A: People always warn that you shouldn’t do business with friends, but I don’t want to work with clients who might not someday become my friends. So it’s paramount to me to create a working relationship with a broker-dealer or custodian who really lets you focus on servicing clients the way you feel best. Too many times, people will tell you how much money you can make working with their firms. But I’ve learned an important characteristic in choosing a new business partner is to look for vendors who talk about how they can enhance your fiduciary role with clients.