Saying he “wants to shape the future” of the advisor industry, Ron Carson, CEO of the advisory firm Carson Wealth Management and founder of Peak Advisor Alliance, announced today the formation of Carson Institutional Advisory (CIA), an “alliance” of “growth-minded advisors.” Members will receive access to Carson Wealth’s research and five model investment portfolios, a co-branded iPad app for advisors to use with clients, and marketing assistance, including lead generation.
While Carson (left) said in an interview Friday that CIA has already formed partnerships with TD Ameritrade Institutional, Envestnet and LPL Financial—CIA prefers that its advisors work with those firms—he said they could also work with other custodians.
Designed for “growth-minded advisors,” particularly hybrid advisors, CIA is meant to help advisory firm owners “unload tremendous expense off their middle and front offices.” The advisors maintain their own client relationships, firm names and own RIAs, should they so choose.
Moreover, Carson says that with no upfront costs and without a “long-term commitment” from those firms, allying themselves with CIA will be “cash-flow positive”—even considering that CIA will take an ongoing basis point cut on the firms’ managed assets.
“We’re cutting 100 bps” off their investment management costs, Carson estimates.
“Fees are such an issue” for advisors and their clients, Carson says, so if “you lower the costs clients pay for money management,” CIA advisors would see their revenue rise even if they “give back half of their savings to clients.”
The marketing assistance will include public relations support in addition to lead generation, with CIA getting involved to the point of helping advisors with their RFPs. CIA members would have access to Carson Wealth’s unbiased research—“Wall Street has fabulous research but they use it to their own benefit; bringing people to slaughter,” he says, with a reference to his own upbringing on a farm—and advisors (and their clients) will be able to dial in to Carson Wealth’s daily morning meetings.
There is one catch, however. CIA advisors will have to adhere to a client bill of rights that requires proof of a formal succession plan. CIA can "monetize" advisors by buying their firms if they choose, Carson says. “It’s your choice. But if you’re ready to sell, we’ll buy your business” after a minimum of two years participation in CIA.
Carson said he thinks it would “be natural” for many of Peak Alliance’s more than 1,000 members to “migrate” to CIA, and that many have already expressed interest in doing so.