Growth has always been the Holy Grail of wealth management and now advisory firms are incorporating the concept into formalized management titles and strategies.

Wealthspire Advisors in New York and Milwaukee-based Wipfli Financial Advisors both recently created new executive roles to implement growth strategies.

Wealthspire, which has over $12 billion in assets under management named Jim DeCarlo chief strategic growth officer and Wipfli Financial Advisors, with over $4 billion in AuM, hired Katie Cullen as chief strategy and innovation officer.

Not coincidentally, both DeCarlo and Cullen are industry veterans who see talent, mergers and acquisitions, specialization, strong leadership and digital upgrades as keys to growth.

Talent tops agenda
DeCarlo had been CEO of StratWealth, a Maryland-based RIA that was acquired by Wealthspire last year. Attracting, training and retaining quality advisors is “the number one issue” for growth-minded advisory firms, he says.

Cullen, who most recently was executive head of two industry study groups, Alliance for RIAs (ARIA) and Zero Alpha Growth, agreed. “Growth comes back to people,” she said. “Having great advisors improves your quality, service, brand, efficiencies and access to the market.”

Both Wealthspire and Wipfli have partnered with local colleges to implement internship programs; Wealthspire with Salisbury University in Maryland and Wipfli with University of Wisconsin, Madison.

Emphasizing talent in a business where demand far outstrips supply has been a longstanding priority for Wealthspire, according to CEO Mike LaMena. “We want to make sure advisors have a collaborative ecosphere, can learn from their peers and grow in their careers,” LaMena said. “We know it’s a very competitive area and it’s one that we want to invest in.”

Wipfli also emphasizes collaboration as a recruiting selling point, Cullen said. “We believe there’s a correlation between growth and an interest in working together with peer groups.”

M&A: fastest route but not easiest
M&A, of course, is the quickest way for firms to grow but in the current environment of cutthroat and deep-pocketed competition, hardly the easiest.

Wealthspire, itself the product of an acquisition of Bronfman Rothschild by NFP-owned Sontag Advisory in 2019, only did one transaction last year. But rivals such as CI Financial completed more than a dozen deals in 2020, a year that saw a record number of RIA transactions.

The current M&A market is “incredibly competitive” with an overabundance of well financed buyers, LaMena and DeCarlo concede. But, they maintain, Wealthspire can afford to be patient and wait for the right firm at the right time (and price) that wants to scale up and take advantage of Wealthspire’s platform.

In the meantime, Wealthspire will focus on having smaller teams from other firms join the RIA, DeCarlo said.

Wipfli which is associated with Wipfli LLP, a national accounting and business consulting firm, plans to leverage its CPA ties to attract potential M&A partners this year, Cullen said.

“Our CPA affiliation model is really unique and that’s how we’re positioning ourselves,” Cullen said. “We’re offering a whole new area of service for RIAs and believe that can be an attractive M&A opportunity.”

Specialize and segment
Specialization is also seen as a growth driver for Wealthspire and Wipfli.

Attorneys, business owners and women in transition are among the client segments Wealthspire targets, and being able to understand and offer services unique to those groups enhances Wealthspire’s value proposition and drives referrals, DeCarlo said.

Weathspire has also expanded its segmentation pool with ‘Wealthspire Pathways,’ a “digital advisor platform with integrated planning” that pairs lower-cost digital services with a human advisor.

The service is aimed primarily at younger clients sometimes called HENRYs (high earners, not rich yet) who don’t need or want high-touch customized service and are content with investing in low-cost index funds.

“It’s a way to appeal to the emerging wealth segment of the market as well as the younger members of multi-generational families who are already clients,” LaMena explained.

Wipfli is appealing to clients who want access to accounting services and are drawn to working with women, Cullen said.

Five of the six executives on Wipfli’s leadership team are women, Cullen noted, and 40 per cent of the firm’s advisors are female, an unusually high percentage for an advisory firm.

“We’re really committed to diversity and clients and prospects can see that reflected in the firm’s employees and leadership team,” she said.

Leveraging leadership   
Both firms flaunt leadership as a growth driver.

LaMena is an industry veteran who began his career with Morgan Stanley and helped build Hightower Advisors into an industry powerhouse as president and COO. Jeff Pierce, Wipfli’s CEO, also has a distinguished pedigree, having headed the advisor practice for Dimensional Fund Advisors, one of the industry’s leading fund managers.

“At StratWealth, we talked to a number of firms before we went with Wealthspire,” DeCarlo said. “We saw what different firms were offering, and we saw how impressive the combination of Wealthspire’s platform, culture and leadership was.”

Pierce’s experience as consultant and ability to “take data and make it relatable to people’s jobs” has helped build advisor loyalty which in turn has burnished the RIA’s brand in the industry, according to Cullen.

And both firms have taken advantage of the pandemic-induced reliance on digital tools to spur growth.

“The pandemic has fast forwarded the industry by a half dozen years,” DeCarlo said. “Necessity proved to be the mother of adoption and we’ve found that digital engagement has led to more frequent touch points with clients and strengthened relationships.”

Cullen agreed.

“COVID forced us to adapt very quickly,” she said, “and has improved our line of communications to clients.”