Solo? Worried about Consolidation?

November 6, 2018

Solo Advisor? Does industry consolidation concern you?

There are many articles of late predicting the eventual demise of the solo practitioner. Most recently, Jeff Benjamin of Investment News, posed a similar question in his column published on October 23rd, 2018.

In the article, Mr. Benjamin cites feedback from different perspectives. One that sees this as an opportunity for solo practitioners and the view that the trend toward consolidation will put even more pressure on sole proprietors.

A few weeks ago, we at Dynamic Wealth Advisors posed the question about whether an advisor looking to make a change was better served going solo or joining an existing firm. We made the argument that an advisor could do both at the same time. Joining an existing firm and enjoying the economies of scale while maintaining the independence they seek (or want to retain) can be achieved with a firm like Dynamic Wealth.

When asked about industry consolidation, Jim Palumbo, Chief Development Officer of Dynamic Wealth Advisors, had this to say, “While the average age of investment advisors is 51, the average age of advisory firm owners is 61 and less than 10% of advisors are under 35, according to the Cerulli Associates 2017 survey. This is a difficult demographic environment in which the solo practitioner is positioned, trying to find the scalability he or she needs to survive, grow past inflection points, and build a realistic continuity and succession plan. At Dynamic, we have created a path for the solo practitioner to retain independence but at the same time find the scalability they need for growth and continuity, as well as being part of a nationwide network of like-minded professionals in which they can link with the right people and resources to complete their succession plans.”

In the Investment News article, Michael Kitces mentions that he sees the problem for firms that are in the middle, saying, “A large swath of firms are too big to be small, and far too small to be big, and are at risk of getting squeezed out.”

The firms that fall in the “middle” that Mr. Kitces describes could benefit from a relationship with a firm like Dynamic by leveraging the technology and infrastructure to continue to grow and scale their business, remain competitive and maintain their independence.

 About Dynamic Wealth Advisors

Dynamic is recognized as a premier provider of essential resources to professional wealth management practices. Its turnkey practice platform includes asset management, and enables wealth advisors to save money and focus on clients while positioning themselves for success and growth. With myVirtualPractice, a suite of wealth management practice solutions, Dynamic hands the professional wealth advisor the keys to a comprehensive custom-built virtual office and practice complete with staff, back/middle office, accounting/billing, compliance and even a Virtual Assistant. The wealth advisor need only add clients and a laptop, and they are up-and-running instantly. For many breakaways and independent wealth advisors, being part of a nationwide community of like-minded professionals is one of the most valuable components of their affiliation with Dynamic.