VERSACE: Independent and for the individual

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ANALYSIS/OPINION:

As I head toward the end of the year, I tend to reflect on the past 12 months, and as an investor, it’s always wise to examine our portfolio choices — both good and bad — made in the past 12 to 18 months. I find that by understanding where I went wrong, as well as where I went right, is just as important to sharpen my investment lens.

A similar review should be taken when it comes to other investment-related relationships, especially if there is a changing landscape that stands to benefit us as investors and clients. With that in mind, I recently spent some time with Tony Sirianni, CEO of Washington Wealth Management, to talk about the trends affecting the financial adviser market. As background, Washington Wealth Management LLC is a D.C.-based financial services firm that is creating an independent branch network for financial advisers to manage and own their business and allow them to provide their clients with independent and transparent advice.

Q: Tony, what is driving the sea change in the financial adviser market?

A: There has been a tremendous amount of consolidation in the industry, driven mostly by the recent financial crisis. Advisers, who might have started in this business as part of a small firm, are now feeling out of place. They want to be where the individual client and adviser matter. And so it’s sort of a perfect storm right now. All the bailouts and news about large bonuses have left clients with little confidence in Wall Street. They prefer, I think, to do business with someone in a smaller firm — someone they know and who owns the business.

Advisers, too, have become disenfranchised. They want to make their own decisions about their future, their clients and the future of their practice. And then you have the evolution of what we call the independent brokerage platform, like the one we use, where we have the opportunity to offer virtually any type of investment product available. And so you’re seeing a lot of advisers making the decision to go independent, to get back in the driver’s seat of their business and get back to focusing on what’s best for the client.

Q: How does this benefit individual investors?

A: That’s the whole point of what’s happening. The adviser wants to do what’s best for the client, and our offering allows them to do just that. Everything is more transparent to the client. We’re not in the business of charging punitive fees, for instance. To us, the relationship the adviser has with the client is paramount, not the size of the account. So clients can be confident that their adviser is looking out for their best interests.

Q: We see plenty of commercials for financial companies, yet what you’re describing sounds similar to what we see in those commercials for Scottrade Inc., but that is an online investing firm?

Washington Wealth Management is a registered investment adviser (RIA), which means our advisers work with clients who want solid advice on their total financial picture — not just picking investments. So while you’re on your own at an online brokerage, with an RIA such as us, we work with you in terms of your overall goals and objectives, build a plan around how to meet them and stay with you every step of the way.

Q: Does independent mean that clients will have limited choices when it comes to services and investment products?

A: Actually, it’s the exact opposite. Clients have access to more products and services under our model. We have what we call an open-architecture platform, which means it can be customized as client requirements arise, or as new types of products and services emerge. For instance, our advisers have access to more than 15,000 mutual funds that they can offer, as well as the full suite of services suited for managing clients’ assets.

Q: How does a firm like Washington Wealth Management distinguish itself from the big-boy firms and their catchphrases?

A: Placing our clients’ interests above all else is not just a slogan for us. It’s our mission, and it guides us in everything we do. We talk a lot about “client first, adviser second, firm last.” Everything at Washington Wealth Management is designed around how to provide the best wealth management services for the client today. That includes the widest range of products and services, custody, trading and brokerage services from world-class partners, and an alignment of the advisers’ interests with the clients’ needs through our equity and ownership arrangement when an adviser joins the firm. And we’re also trying to bring some joy back to this industry. Our advisers are part of an organization and culture that values them as individuals and cares about their clients. And so for the individual client, when their adviser is happy, they are happy as well.

Chris Versace, the Thematic Investor, is the director of research of Think 20/20, an independent equity-research and corporate access firm located in the Washington, D.C., area. He can be reached at cversace@washingtontimes.com. At the time of publication, Mr. Versace had no positions in companies mentioned. However, positions can change.

About the Author
Chris Versace

Chris Versace

Chris Versace, the “Thematic Investor,” is the director of research at Think 20/20, an independent equity research and corporate access firm located in the Washington, D.C. area. Before Think 20/20, Mr. Versace was the portfolio manager of Agile Capital Management (ACM), a thematically driven alternative investment fund. The groundwork for ACM was laid during Mr. Versace’s tenure as senior vice president of equity ...

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