After eight years at Morgan Stanley, advisor Margaret Dechant last week joined six of her ex-wirehouse colleagues to form 6 Meridian. The Wichita, Kansas-based group managed more than $2.2 billion at Morgan Stanley. The new indie RIA has chosen Pershing as its custodian and employs a support staff of six.
Q: What was the main reason that your team decided to go independent?
A: We’ve always operated very independently within Morgan Stanley. But we’ve built a unique investment and wealth planning process. Our client base is primarily made up of hard-working professionals and entrepreneurs who’ve created their wealth by their own hands. So that creates a very distinct profile of the type of client our practice typically serves. Since they’re used to taking risks in their own businesses, our focus is on wealth preservation.
A: How is that different from when you were at Morgan Stanley?
A: We just weren’t utilizing a lot of Morgan Stanley’s investment platform. They’ve created some great tools for a large base of clients. We just found that those resources weren’t always the most applicable to the individual needs of the families we serve. In making the decision to establish our own firm we simply wanted the freedom and flexibility to choose our own custodian, research and technology.
Q: Was technology a big driver in your move to independence?
A: Yes, we believe that we’ll now be able to tailor our client reporting systems and back-office technology more to what our clients really want to see. We’ve decided to select MoneyGuide Pro as our primary wealth management tool. For our clients’ reporting engine, we’re using Addepar. And we’re going to be using Junxure for CRM. Morgan Stanley has a very good technology platform which is very intuitive and easy to use. But by being able to go out and shop and negotiate our own deals, we’ll be able to create greater operational efficiencies in our practice.
Q: Will this move impact your clients’ fees?
A: We now have the capabilities to deliver the best products and resources to our clients at reasonable rates. This move gives us complete flexibility in how we focus our time and energy. So we feel like we’re going to be able to provide more personalized service and offer very reasonable fee schedules.
Q: What’s been the hardest part of the move?
A: Just the physical logistics – all of the paperwork required in making this transition. We’ve brought in an outside consultant who has helped us to make sure we’ve got everything covered. We’ve also made sure to divide responsibilities among staff and taken a lot of time to figure out how different aspects of the move will impact different parts of the business. So we’ve used that big picture analysis done months in advance as a framework for guiding our staff through this process.
Q: When did you start looking at making a move?
A: We began researching the concept almost two years ago. That involved looking at various platforms and considering working with hybrids like HighTower as well as several major independent broker-dealers. After we considered all of our options we came to the conclusion that we could really make this move on our own. And we found that going completely independent would serve our clients’ interests the best.
Q: How does this move affect your own compensation outlook?
A: We could’ve taken a big check to join another firm. Instead, each of our seven partners have decided to invest our own capital into starting a business. We’re very confident that being able to control how we allocate our resources will give us greater ability to grow over time. By going independent, we now also have complete flexibility in hiring the professional skill sets we’re going to need the most to expand.
Q: What are your long-term growth plans?
A: Our goal is to expand our investment options. For example, we’d like at some point to be able to start a mutual fund so that mainstream investors can take advantage of some of our investment strategies. That’s nothing we could’ve done at Morgan Stanley. As an independent firm, we’re also going to have total freedom to give advice to clients no matter where their assets are held. That’s something we couldn’t always do at Morgan Stanley.