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There were a lot of financial advisors looking for new opportunities this week. Here was the number one reason why.... Agency. Something happened at their firm. Maybe the firm recently sold and there is now another layer of management above them. Maybe the firm decided to make some changes to how advisors are expected to run their practices. Either way, they now have someone above them telling them how to run their business, how to grow, or what they should be doing differently. This is where advisors get frustrated. Especially when the person giving them all this direction has never actually been in the trenches as an advisor. After 15 or 20 years in the business, top advisors usually have a pretty good idea of how they want to run their practice. There is only so much they will put up with before they start looking around at what else is out there.

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What shocks a lot of wealth advisors is that most firms could care less about your resume. If you are licensed, your work history is already public information. Regurgitating it onto a piece of paper does nothing to differentiate yourself. Specialized recruiters know the hyper-specific things that make a candidate interesting to a given firm. Most candidates never emphasize those details unless someone gives them the answers to the test.

Let's say you get past step one. You decide you actually do want to buy into the firm. Now there are a few things you are going to want to understand before you start talking about the price. The first is the difference between your economic interest and your voting interest. They are not necessarily the same thing. You might own 10% of the economics of the business, meaning you are entitled to 10% of the profits or distributions. But that does not necessarily mean you have 10% of the voting power. You could have a much smaller say in major decisions depending on how the ownership structure is set up. The next question I would ask is how distributions work. As an owner, you will typically be responsible for paying taxes on your share of the company's taxable income, whether or not all of that income is actually distributed to you. If there is not a plan for regular ownership distributions, you could end up owing a pretty significant tax bill without having received enough cash from the business to cover it. Once you understand those pieces, now you can start getting into the actual economics of the deal. How much equity are you being offered? How is the valuation determined? What exactly are you buying? How are future buy ins or dilution handled? What happens if you want to sell your equity? And what financing options are available to you?

You're a wealth advisor and the senior partners at your firm just offered you the opportunity to buy in. Before you start looking at the economics, I'd ask a much more basic question. Do you actually want to own this business? This is where I think some of these deals can go wrong. You have senior partners in their 50s or 60s. You're in your 20s or 30s. They want to start thinking about their exit, so they offer you an opportunity to buy in and become a partner. On paper, it can look like a great opportunity. But what happens if those senior partners sell the firm a few years later? Now you're an equity owner in a business that you never would have chosen to join. Your equity may still be illiquid. You may be tied into an earnout. And you could be subject to a multi year non compete or other restrictions if you decide you want out. You went from being an employee with a pretty simple decision to being a minority owner with a complicated one. So before you get too deep into the valuation, payout and buy in terms, figure out what you're actually buying into. You aren't just buying equity in today's firm. You're buying into whatever that firm becomes next.

I’ve never heard anyone discuss this question. A conversation I had recently brought this up. I was talking to an advisor that told me his RIA was pushing them to use a new 3rd party cash management fintech the firm partnered with. I dug a little deeper. One of the PE firms on the cap table of their RIA also had an investment in that fintech the RIA was pushing their advisors to use. I’d argue that’s less “independent” than a wirehouses pushing credit cards on WM clients. At least the wirehouse is direct about it

Can an RIA call itself independent if it’s owned by private equity?

One of the hardest parts of finding a new firm is that most financial advisors don't know what they don't know. You know your current payout. You know your technology. You know how your firm handles compliance. But you may not know what is normal somewhere else. You may think 40% is a great payout until you see what another model offers. Or you may chase a 90% payout and realize you gave up a bunch of things you actually valued. That's why I always encourage advisors to start understanding the landscape long before they ever consider making a move. Because there are so many layers to this business. And once you start peeling back the onion, you realize how much you probably didn't know was even an option.

The wealth management industry gets oversimplified into RIAs and broker dealers. That misses a lot. Take RIAs for example. You can have a mega RIA approaching $1T in AUM with multiple private equity firms on the cap table. Or a $500M RIA with 5 employees. Or one advisor running a $50M practice. You have platform RIAs where advisors are 1099 contractors. You have RIAs that started as CPA firms. You have RIAs that came out of insurance practices. You have firms that look and operate like large corporations, and others that are basically an advisor and a few employees. All of them are RIAs. But some of them have very little in common. The RIA label tells you the legal structure. It tells you nothing about what it's like to work there.

There are few mistakes that can end your whole career….this is one of those mistakes

Wealth advisors in the RIA space don’t like hearing this… But most of the $500M+ AUM advisors I talk to are still at the wirehouses. Are there downsides to the wirehouses? Of course. There are downsides to every business model in this industry. But the wirehouses still have some pretty significant advantages for UHNW advisors. The brand name matters. The lending capabilities matter. And, whether people like it or not, the economics can be really good. For a $500M+ advisor, wirehouse payouts can be higher than a lot of traditional RIA opportunities. Then there’s the transition package. I’ve seen UHNW wirehouse deals with transition packages approaching 500% of revenue. That’s tough to match in the RIA world. And the money is real cash, paid in the near term. Compare that to taking illiquid equity in a private RIA and hoping there’s a liquidity event down the road. That doesn’t mean wirehouses are right for every advisor. But it’s not tough to see why it’s right for some.

Financial advisors don't need to manage $100M+ for firms to be interested in them. I came across an opportunity with multiple locations across Southern California that specializes in taking smaller advisors and helping them build much larger practices. Their existing marketing engine generates roughly 3 leads per advisor every week. If you or someone in your network in Southern California fits this profile, shoot me a DM.

Excited to hangout with some of you X friends in person

I love seeing this! I say it all the time. X is the best place to be for financial advisors

Financial Planning posted their list of rising stars for 2026. financial-planning.com/list/…

This week's Advisor Market Report newsletter is out now.

2026 is on pace to break the record for M&A transactions in the RIA space. I get asked about this a lot. What is it actually like to work at one of these large, PE backed RIAs? There are some real positives. They have resources that most small RIAs can't touch. Financial planning teams. CPAs. Estate attorneys. Investment teams. Marketing. Technology. They also have so much money sitting with the custodians that they can negotiate things a small RIA probably can't, like better margin rates. But there are tradeoffs. The advisor payouts usually aren't great. You are often somewhere in the 20% to 45% range. And a lot of the advisors who end up at these firms came from small RIAs that were acquired. That can be a pretty big adjustment. You go from working at a 20 person firm where you could walk into the owner's office and get something done to a company with several layers of management. Now you have someone asking about your pipeline. You need an exception to do something that used to be completely normal. There is more bureaucracy. Then there are the growing pains. These firms are acquiring businesses and adding advisors at a pretty incredible pace. All those planning teams, CPAs and attorneys that looked like a huge resource when you joined are now supporting more and more advisors. And there is pressure from the PE owners to grow revenue and improve the bottom line. From what I've seen, one of the places that pressure shows up is staffing. You can have a firm with hundreds of employees and still feel like your individual team is understaffed. I think these firms can be a really good fit for certain advisors. An advisor nearing retirement may look at that infrastructure and see a great exit plan. A service advisor may love having all those resources available. But this usually isn't where I find the traditional rainmaker with 20 years left in their career.

I have this conversation with advisors daily. Almost everybody wants equity. They have seen the crazy multiples being thrown around and they want to be on the beneficial side of that. What’s rarely talked about are the downsides of being a minority equity holder in a private (illiquid) business. You can take out millions of dollars in loans to buy in and still have no seat at the table. No control over firm wide decisions, no voting rights, no ability to control ownership distributions or liquidity events. It can absolutely work out fantastically. There are plenty of examples of it. But any advisors considering a buy in should spend considerable time understanding all the facets of their particular situation before jumping in.

For a long time, Schwab and Fidelity have dominated the RIA custody business. Last month, Vanguard announced its return to the space through the acquisition of Altruist. Now State Street is getting back in as well. More custodians means more options for advisors. And more competition usually means better technology, better service and better economics. The custody wars may be just getting started. wealthmanagement.com/ria-new…

Schwab is putting Claude directly in front of 16,000+ RIAs and covering the cost. State Street is getting back into RIA custody. And Ameriprise lost another $1B+ team. More on these stories in tomorrow's Advisor Market Report newsletter advisormarketreport.beehiiv.…