{"id":307991,"date":"2025-11-26T11:21:17","date_gmt":"2025-11-26T11:21:17","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/307991\/"},"modified":"2025-11-26T11:21:17","modified_gmt":"2025-11-26T11:21:17","slug":"this-summer-employee-owned-firms-met-to-plot-long-game","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/307991\/","title":{"rendered":"This Summer, Employee-Owned Firms Met to Plot Long Game"},"content":{"rendered":"

This July, executives from 22 employee-owned registered investment advisors, each with more than $3 billion in client assets, gathered in Park City, Utah, to discuss a pressing topic: how to keep growing without taking on external capital in a sector flooded with investor cash and skyrocketing valuations<\/a>.<\/p>\n

\u00a0Rob Francais, the founder and CEO of Aspiriant Wealth Management, a Los Angeles-based RIA with $16 billion in client assets, organized the gathering. Francais has long been a staunch advocate of employee ownership<\/a> at Aspiriant, which is 100% owned by roughly one-third of its 220 team members.\u00a0<\/p>\n

But as private equity investment in the RIA space boomed, Francais began to feel outnumbered. In the early 2020s, he noted, he was part of a study group with eight other large, employee-owned RIAs. Eighteen months after their first meeting, all but Aspiriant had sold a stake to an external investor.<\/p>\n

\u201cThese were firms that said they wanted to be employee-owned for the rest of time, right?\u201d Francais said on the sidelines of this year\u2019s Schwab Impact conference. \u201cAnd all it took was 18 months for that to go away.\u201d<\/p>\n

It is difficult to determine precisely how many RIAs with more than $3 billion in AUM do not have some external stakeholder. The data firm AdvizorPro noted that RIAs do not have a standard format for reporting private equity investments, so framing the market can get messy and requires some \u201ceducated guessing.\u201d A recent report from that firm found that some form of private equity\u00a0backs 295 RIAs.<\/a> There are at least 15,870 registered firms in the U.S., according to the Investment Adviser Association.\u00a0<\/p>\n

Related:Lido President Says Brand Identity Is the Firm’s ‘North Star’<\/a><\/p>\n

In 2024, Francais conducted his own research and pegged the market at about 60. He then put that research into action by seeking to gather some twenty firms for a retreat at the Deer Valley Resort in Park City, Utah, a number he felt would be small enough for meaningful conversation.\u00a0<\/p>\n

He ended up with 22 firms, all of which met the $3 billion asset threshold, were 100% employee-owned, and were fee-only fiduciaries serving individuals, not institutions. They hailed from 16 states, managing a total of $126.2 billion in assets, with 1,925 employees\u2014619 of whom held an ownership stake.<\/p>\n

The Summit<\/p>\n

The group met at the Stein Eriksen Lodge in Deer Valley from July 8 to 10, with an agenda headlined: \u201cEmployee Ownership Summit: Redefining Independence.\u201d A welcome packet included a letter from Francais, a box of chocolates and a white baseball cap that read, \u201c100% EO \/ Redefining Independence.\u201d<\/p>\n

Related:NewEdge Advisors to Launch W-2 RIA Push in 2026<\/a><\/p>\n

According to the agenda and interviews with attendees, the two-day meeting included case studies on succession models, breakout sessions discussing the challenges of recruiting and acquiring amid high valuations, and networking time.\u00a0<\/p>\n

During one session, an employee-owned firm described how its equity distribution structure helped it keep advisors from fleeing to well-capitalized firms offering enticing, one-time payments. At another session, leaders discussed the benefits of employee ownership, including how it helps meet the elusive goal of actual organic growth.\u00a0<\/p>\n

Neela Hummel, CEO of employee-owned RIA Abacus Wealth Partners in Santa Monica, Calif., said the realization that employee ownership can be a powerful marketing tool was a key takeaway for her.\u00a0<\/p>\n

\u201cI don\u2019t even know if our employees and partners understand how big of a deal this is,\u201d she said. \u201cI realized I need to market this internally, because if my people don\u2019t feel it in their bones, how are they going to let this be a differentiator to prospects and clients?\u201d<\/p>\n

\"Rob-Francais-aspirant.png\"<\/p>\n

Rob Francais, the founder and CEO of Aspiriant Wealth Managemen<\/p>\n

For their one evening together, the group gathered on a restaurant deck overlooking the Wasatch Mountains. They shared laughs about all the calls they were getting from sell-side bankers. Francais got ribbed about whether all the firms in attendance would one day join Aspiriant.\u00a0<\/p>\n

Related:Merit Acquires $1.2B Commonwealth Practice in the Midwest<\/a><\/p>\n

Hummel said the meeting was a \u201cbreath of fresh air\u201d from the other conferences she attends.<\/p>\n

\u201cWe\u2019re all looking at the same landscape, but we just have different problems than PE-backed firms\u2014it\u2019s just a different game,\u201d she said. Though she knew people at most of the firms in attendance, \u201cwe had concentrated time to just focus on the issues that impact scaled, employee-owned, generally successor-led firms.\u201d\u00a0<\/p>\n

Francais said the summit was not meant to be a \u201cnormal conference,\u201d in which vendor assessments and dealmaking reign\u2014though possible deals weren\u2019t off the table.\u00a0<\/p>\n

While no deals emerged from the summit, Pat Collins, the co-founder of Greenspring Advisors in Towson, Md., and Michael Goodman, founder of Wealthstream Advisors in New York City, used the meeting to further long-held discussions about merging their firms for the benefits of scale and the ability to spread out the equity.\u00a0<\/p>\n

\u201cIt was something of a gradual acceptance of that fact that we were just 23 people, and I was the majority shareholder,\u201d Collins said. \u201cIf we merged, we would have a much broader equity spread, and my ownership wouldn\u2019t be so big, and we\u2019d have a much higher probability of staying employee-owned.\u201d\u00a0<\/p>\n

In October, Collins and Goodman announced the merger of their two firms<\/a>, forming Greenspring Advisors. Combined, the RIA now oversees $10 billion in client assets and has about 70 employees, 23 of whom hold equity in the firm. Goodman plans to stay engaged with the nascent employee-owned RIA network and is part of a task force that Francais put together to maintain the momentum.<\/p>\n

Swimming Upstream<\/p>\n

In the broader RIA market, external capital remains the primary driver of growth for firms managing hundreds of billions of dollars in assets. Large RIAs are more commonly operating with not just one investor in the capital table, but two or even three<\/a>.\u00a0<\/p>\n

There are also many industry proponents for private equity investors. Access to capital not only funds acquisitions, but tech improvements, staffing and additional client services. Many PE firms bring corporate expertise that some say is desperately needed in a sector built on the backs of rainmaking founders who have never taken a business management course.\u00a0<\/p>\n

And new backers continue to enter the space, drawn to the prospects of investing in fast-growing firms with a demographic tailwind, sticky revenue and relatively high margins. Last week, a firm called GTCR announced<\/a> it had agreed to take a controlling interest in the Boston-based Fiduciary Trust Company, marking only its second investment in the RIA sector.<\/p>\n

Hesom Parhizkar, co-founder of AdvizorPro, said these types of deals drive higher valuations for RIAs across the board, whether they have external investors or not.<\/p>\n

\u201cTraditionally, equity in the firm was and is a non-compensation tool used for retention and to give employees a sense of ownership,\u201d Parkhizkar said. \u201cNow, with a PE structure and fairly defined timelines, KPIs, etc., one can put a market price on each unit of equity.\u201d<\/p>\n

Other forms of non-equity compensation will become more common as RIAs compete for talent, he said, including higher salaries, bonuses and other fringe benefits.<\/p>\n

However, firms like Aspiriant have promised to keep equity sharing among employees at the center of their growth plans.<\/p>\n

\u201cWhen you\u2019re serving the most affluent families, they want to know who\u2019s taking care of them, and you have to pour your soul into these families,\u201d Francais said. \u201cTypically, if it\u2019s a large, complex family, you\u2019ve got to have a large, complex team of people serving them. And if you\u2019re expecting people to pour their soul into that relationship, they better be in the cap table.\u201d<\/p>\n

Francais and his consortium of employee-owned firms are likely to become more vocal in industry conversations. Francais plans to host a second employee-owned summit, featuring approximately 20 new firms, this April. In the fall, he\u2019ll bring together both groups from the first two summits, where a task force will present ideas for further alignment, more peer-led education and advocating for employee-owned firms in the marketplace.<\/p>\n

Hummel, the chief executive of Abacus, is ready to answer the call.\u00a0<\/p>\n

\u201cWe might feel defensive in our little employee ownership corner with everyone talking about PE and M&A,\u201d she said. \u201cBut this is all of us getting together and going on the offense. … Going, \u2018yeah, we\u2019re not crazy. We\u2019re doing this for good reasons. Let\u2019s leverage it.\u2019\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"This July, executives from 22 employee-owned registered investment advisors, each with more than $3 billion in client assets,…\n","protected":false},"author":2,"featured_media":307992,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[45,49,48,133,131,132],"class_list":{"0":"post-307991","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-ca","10":"tag-canada","11":"tag-finance","12":"tag-personal-finance","13":"tag-personalfinance"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/307991","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=307991"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/307991\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/307992"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=307991"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=307991"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=307991"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}