How Robust Tech Stacks Can Support Recruiting of Wirehouse Breakaway Advisors

Independent platforms with strong digital offerings compete more effectively in recruiting elite financial advisors from wirehouses


Many of the questionable aphorisms we grew up with have impressive staying power. It’s not uncommon for beliefs based on outdated notions or superstitions to perpetuate themselves by repetition alone.  Consider the following:

  • You should wait one hour after eating to go swimming.
  • Cold weather makes you sick.
  • We only use 10% of our brains.

Here’s the point:  Falsehoods are particularly intransigent when the information used to be true but no longer is.

In the wealth management space, one of the best examples of this is the idea that, by going independent, wirehouse breakaways are giving up their access to digital systems, innovative tools and other value-added support resources. In reality, the days of having to choose between independence and top-shelf technology are long gone.

Michael Terrana, Terrana Group

Michael Terrana of Terrana Group agrees. “Yes, 20 years ago, the independent channel, while growing, was still a bit behind the times. The barriers to cutting-edge tech remained high in the independent channel, and the quality of tech was highly variable to say the least.”

However, adds Terrana, that was then, and this is now.

“There’s no question that the quality of tech stacks can still vary broadly from firm to firm in the independent channel. But across the board, the proliferation of high-quality, third-party wealthtech solutions, paired with the continued growth of wirehouse breakaway trends, have narrowed the gap substantially.”

In some cases, Terrana notes, independent firms have a more compelling offering than their wirehouse counterparts thanks to private equity backing and the plethora of third-party solutions providers.

As industry consolidation continues apace and wirehouse breakaway recruiting wars intensify, it is clear that technology and digital solutions comprise a compelling part of an independent firm’s value proposition. Firms serious about attracting high-producing breakaways understand the importance of investing in innovative, integrated and comprehensive tech offerings across all facets of their ecosystem. But that wasn’t always the case.

Both Front-Office and Back-Office Capabilities Matter

David Knoch, Docupace

“We are a leading provider of digital workflow solutions to independent wealth management enterprises involved in both the IBD and RIA segments of the industry,” said David Knoch, CEO of Docupace.

“For years, too many independent firms engaged in asymmetrical investment in the front office versus the back office. This gap between client-facing aspects of firms and the back- and middle-office functions – from technology to operations – has created a situation in which the capabilities of firms in these areas have suffered from severe under-investment.”

Knoch adds, “Any time you have a mismatch between how a firm and its financial advisors position themselves with clients and how business is actually processed, and accounts are served, you are bound to fall short of advisor and end client expectations.”

According to Knoch, wealth management enterprises are increasingly aware of the urgency of investing in digital solutions that harmonize their front- and back-office tech stacks.  Doing so, in Knoch’s perspective, creates a more solid foundation for delivering a consistent and positive service experience that appeals to wirehouse breakaways.

“Once that foundation is in place, there are numerous ways to build on that,” said Knoch.

Who Is Winning the Wirehouse Wars … and Why

One firm that has invested heavily in its tech offering, operations and digital solutions to appeal specifically to wirehouse advisors is Sanctuary Wealth. And all indications are the investment is paying off.

Launched in 2018, the firm has quickly emerged as one of the leading platforms for wirehouse breakaways who want to go independent.

Jene Hoosier, Sanctuary Wealth

“We’re experiencing remarkable success in attracting advisors from the wirehouses. This underscores our commitment to a culture of partnered independence, our comprehensive platform offerings and strong infrastructure,” said Jene Hoosier, Sanctuary Wealth’s Chief Operating Officer.

Hoosier notes that Sanctuary recently launched an upgraded version of its advisor portal, Haven.  The enhancements enable enhanced analytic capabilities, improved functionality and collaboration tools designed to enhance efficiency and foster community within Sanctuary’s network of financial advisors, referred to by the company as Sanctuary Partner Firms.

“As with all our technology investments, we involve our advisors in the decision-making process to ensure we provide precisely what they require to grow their businesses and best serve their clients,” adds Hoosier.

Vince Fertitta, Sanctuary Wealth

Vince Fertitta, President at Sanctuary Wealth, is quick to state that the firm’s unique expertise and knowledge of how wirehouse advisors prefer to work – paired with the firm’s extensive experience in helping sophisticated independent financial advisor businesses grow – has contributed significantly to the successful buildout of the platform’s tech solutions and strategies.

“Without question, the platforms that are leading the pack in attracting elite financial advisors from the wirehouses will need to thoroughly understand both the independent and wirehouse channels,” said Fertitta.

Fertitta emphasizes, “At Sanctuary, we have been very deliberate in building out a senior leadership team with experience from each of the four major wires, but we have been equally intentional in hiring some of the most accomplished leaders from the independent channel.”

Superseding the wirehouses in tech quality

Taking a different tack, but also enjoying success among breakaways is NewEdge Advisors, a New Orleans-based RIA with an extensive national footprint.

Alex Goss, NewEdge Advisors

Alex Goss, CEO and Co-Founder at NewEdge Advisors and Managing Partner at its parent company, NewEdge Capital Group, said, “There has been an explosion of new financial technology. Although exciting, it can be time-consuming to analyze each one, and integrating them can require specialized expertise.”

Goss said his firm has addressed this issue by assembling a team of fintech experts who cater to the personalized needs of their financial advisors.

“We aim to provide each advisor with the best tech experience for their practice without worrying about the time and expertise required to manage it. Wirehouses cannot compete with this level of choice,” adds Goss.

Neil Turner, NewEdge Advisors

According to Neil Turner, Co-CEO and Co-Founder of NewEdge Advisors and Chief Revenue Officer at parent company NewEdge Capital Group, another unique feature of the firm is its ability to deliver top tier digital solutions and strategies on a channel-agnostic basis.

“The power of the NewEdge platform is our ability to be truly business model agnostic and serve as a growth partner for financial advisors seeking to grow professionally as independent advisors, or as W-2 employees,” said Turner.

“There’s no question that many wirehouse breakaways are very interested in becoming independent wealth management business owners. But there’s also a large number of wirehouse advisors who want to exit and align with platforms that are able to deliver a truly differentiated service experience for them and their end clients, while offering the benefits of being W-2 employee advisors. We deliver on both.”

Focus Financial, Dynasty and HighTower

Leading platforms for breakaways who want to form their own RIA are seeing significant growth as well.

Focus Financial, Dynasty Financial and HighTower Advisors are examples of enterprises that are also reaping the benefits of wirehouse advisors who recognize that the traditional rationale for remaining captive have become obsolete.

Jeff Nash, Bridgemark Strategies

Jeff Nash, CEO and Founder of recruiting and consultancy firm Bridgemark Strategies, said, “We tell our clients that ‘Feel, Fit and Financials’ are underpinnings of any decision for advisors in motion. Every advisor has a different set of criteria, different concepts of success and different standards.”

Nash adds, “The must-haves are consistent: Today’s advisor must be able to deliver optimal client experiences, digital platforms and personalized support. For the overwhelming majority of independent firms, the technologies that engender these are table stakes. Advisors conducting their due diligence will find independent firms have digital and technology offerings on par with those in the wirehouse world.”

The evolution of independent channel enterprises to a point where their tech resources can effectively compete with, and in certain cases, even supersede wirehouse offerings is a point emphasized by Adam Malamed, CEO of Sanctuary Wealth.

Adam Malamed, Sanctuary Wealth

Malamed previously served as COO, EVP and a Board Director with Ladenburg Thalmann, a large independent wealth management enterprise sold to Osaic (formerly known as Advisor Group) in early 2020 in a transaction valued at approximately $1.3 billion.  Along the way, Malamed has developed expertise in leading organizations serving some of the most sophisticated independent financial advisor businesses in the industry.

According to Malamed, since being named CEO of Sanctuary in February this year, the firm has welcomed seven large wirehouse breakaway businesses, with recruiting results mirrored by Sanctuary’s continued focus on supporting rapid organic and inorganic growth for its Partner Firms.

“All of this ladders up to the broader fact that the wirehouse breakaway train has left the station. More and more top-tier wirehouse advisors with sophisticated businesses serving high-net-worth clients recognize the unique opportunities that exist today to deliver a superior client service experience while owning and building the equity value of their practices as independent business owners,” adds Malamed.