Moving from the brokerage world to independent status is a major decision that shouldn’t be rushed. David Kohlhaas and his colleagues at Ascential Wealth Advisors in Duluth, Minn., spent about three years evaluating their options for going independent before joining Raymond James Financial Services last October.
Kohlhaas, Brad Christiansen, Kristin Rognerud and their support staff were successful at UBS, where they managed over $200 million in client assets. The team’s decision to leave UBS wasn’t based on any one specific event, says Kohlhaas. Instead, they believed that some of the company’s decisions were beginning to influence their client relationships. “When we felt compelled to address corporate initiatives, whether it was products or processes or some kind of change in the relationship that’s corporate-driven, it felt to us like it impeded our ability to have a pure relationship with the client that was based on their needs, what (the) business should be all about,” he says.
Kohlhaas recalls that the wirehouse advisors were pushed to be more engaged with in-house products and processes. His concerns were not necessarily about product quality, he points out, because the products might be good. He cites an example: switching clients to paperless statements. “I’m not opposed to being green and saving paper,” says Kohlhaas. “But I don’t think that all of our clients should be approached to go paperless because I think it’s an invitation to not pay attention. Those initiatives that were driven by the corporate office felt more about the corporation and less about the client and their needs.”
When they decided to leave UBS, Kohlhaas, Christiansen and Rognerud compiled an initial list of 13 firms for possible affiliation. They evaluated each firm’s systems, processes and tools and narrowed the list to three finalists. They then visited the finalists’ corporate offices before deciding.
Ultimately, says Kohlhaas, it was their perceptions of Raymond James Financial Services’ culture and “regional-firm feel” that sealed the deal. “Raymond James clearly views us as a client of theirs and they are interested in doing a good job for their clients as any service provider would be.” That attitude, he says, “existed at UBS but it wasn’t pervasive like it is here at Raymond James.”
Another decision the Ascential Wealth Advisors team faced was whether they should create their own registered investment advisor (RIA) or affiliate with the Raymond James’ corporate-RIA. They chose the corporate-RIA based on clients’ needs, says Kohlhaas. Several of their clients own annuities and 529 college savings plans, and the Ascential team didn’t want to require clients to hold those assets at a separate firm.
“In order for us to service those clients, we didn’t want to ask them to do a portion of their financial business somewhere else,” says Kohlhaas. “We want to provide full advisory services for our clients. We decided that having a partnership with an independent firm and working under their RIA with a brokerage connection met all of our needs.”
The transition from UBS to Raymond James was successful: 95% percent of the team’s core business followed them and the firm has since grown to $230 million, of which roughly 80% is in fee-based assets. Kohlhaas says the transition was “absolutely the best decision we’ve made. We absolutely have no reservations that we made the right decision for our practice, first and foremost for our clients; secondly, for our practice. And, so, we’re very happy with the move. The clear regret is we wish we had done it sooner.”