Page 32 - Investment Advisor June 2022

Wealth Management

With most of Rudin’s clients on the East Coast, mainly in New triggered a number of FINRA arbitrations. Has all that
York, part of Farmer’s mandate is to expand the firm’s presence on friction quieted down?
the West Coast, home to many financial services and fintech firms. Wirehouses used to pull back on breakaway advisors a little
Farmer is based in San Francisco. He began his nearly nine-year more fiercely than they do now. But the advisors have gotten
public relations strategy career at Schwab in 2013 as director of a lot more educated about the proper way to break away. And
corporate communications. Two years later, he advanced to man- the custodians are helping them do that.
aging director. In 2021, he left to join Rudin. Investment Advisor Part of the custodian’s role for the last 10 years has been
recently interviewed Farmer by phone from San Francisco. educating the wirehouse advisors about both the opportunity
Commenting on what he calls “a big challenge in the retire- [afforded by leaving] and the approach to how to do it success-
ment space,” he says: “The industry is in need of helping fully without having a regulatory backlash or barriers put up
younger people understand the [necessity] to start planning by the wirehouses themselves.
sooner. Employers play a big role” in meeting that challenge. The trend continues to favor the independent model because
Here are highlights of our interview: the end clients themselves have a better understanding of what
the independent advisor [RIA] brings to the table.
Investment Advisor: Where do you see growth in the RIA arena? So it’s not as fraught as it once was, though the momentum
Rob Farmer: I’m optimistic for the RIA space to continue the continues to go the way [of RIAs].
growth trajectory that we’ve seen, but it may not be on the
[same] level. What’s an example of how advisors learned to better
approach leaving a wirehouse?
Why not? Having a conversation with their clients: making sure the cli-
The future of RIAs is still a growth story but not without chal- ents understand what they’re planning to do and how it’s going
lenges, because you’re seeing wirehouses and banks competing to impact them — how it might be better for them.
more fiercely for those client assets — it’s a “jump ball” for So making sure that the assets travel with the advisors when
both the wirehouses and RIAs. they break away.
The wirehouses are looking a lot more like independent They understand the rules and regulations around client
firms [RIAs]. conversations and how and when they can appropriately have
them within the regulatory framework and not run afoul of
In what way? noncompetes or other requirements they have with their cur-
Being more relationship-based, offering value-added services rent situation at the wirehouse.
in addition to investment management.
The wirehouses certainly don’t like to see assets leaving in My understanding is that wirehouse advisors aren’t permitted
a breakaway manner. to tell their clients in advance that they’re going to leave.
So they’re making their offer more like the independents’ Please clarify.
[RIAs] offer. That’s been their approach to retaining the assets. Those conversations can take place in certain circumstances.
They’re changing fee structures, changing their value-add- There’s a very general way of saying [they’re leaving]. They can
ed proposition — offering more services within the offer itself, have these conversations, but there are some real guardrails
whether it’s tax management or retirement planning. around what they can and cannot say.
Those are some the things they generally have been The advisors have become smarter about how to go about
reluctant to provide but are [now] within the framework of leaving appropriately.
the relationship.
You joined The Rudin Group eight months ago after nearly nine
What’s responsible for making RIAs so successful? years with Charles Schwab. What’s your mission at Rudin?
Telling their stories and articulating their value proposition, Getting more visibility for our clients’ executives. The Rudin
RIAs have been able to capture the money transferring out Group has a number of clients who have been slow to under-
of wirehouses. stand the need in today’s crowded marketplace to differentiate
And investors themselves are waking up to what the value themselves by being visible through speaking at conferences or
proposition is in the independent space: relationship-based, [participating in] media opportunities and telling their story.
fee-only and all the other value add that [RIAs] offer.
What kind of “story”?
It seems that wirehouse breakaway brokers were on the My firm belief is that whoever the end client or customer is,
rise and very controversial about 10 years ago. Leaving they’re typically more inclined to want to work with a person

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