Evan Simonoff

Will giant firms and technology cater to every client whim … or create dystopia ?

ACK IN 2014 , A CLAIRVOYANT ADVISOR REACHING FOR their periscope to discern what the profession would look like today would no doubt have grasped certain trends . Billion-dollar RIA firms , many the size of large wirehouse branch offices , were already starting to populate most major regional markets .

A handful of private equity firms already had invested in both individual firms and aggregators . A few giant acquirers , like Focus Financial Partners , were even talking to firms within their networks about going public . Edelman Financial Services — now Edelman Financial Engines after its merger with a tech-driven 401 ( k ) platform in 2018 — had outgrown its parent company , publicly held Houston-brokerage Sanders Morris Mundy , and gone private , in large part because its shares were nearly trading by appointment .

Focus itself would go public in 2018 and then go private in 2023 . Though few other aggregators have yet to embark on this public-private merry-goround , financial engineering is alive and well in the advisory space .

Fast-forward to today and there are now more than 20 firms with assets under management exceeding $ 20 billion ; the majority of them are backed by private equity . Consolidation in the last year slowed a bit after its feverish pace during the pandemic , but the consensus is that it will continue at its brisk speed for the foreseeable future .

Not that today ’ s giants are guaranteed continued success . In a white paper called “ Welcome to the Jungle ” released last December , Digital Privacy & Protection CEO Mark Hurley , himself a former consolidator , wrote that some of the biggest firms now have a built-in problem : Many of their client rosters are skewed

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