Inorganic
Our industry has always looked down on Wall Street’s recruiting checks. Last week there were numerous announcements that independent firms were offering advisors money to purchase their practice. The term for these transactions is inorganic growth. This week we will look at why these transactions are the new rage and examine if they are better than the old Wall Street checks. Wempy Popeye and financial advisors fall for the “I’ll gladly pay pay you tomorrow for a Hamburger today” pitch. Unfortunately Popeye and and most financial advisors provide their hamburger but seldomly get paid what the firms and Wimpy promise . Why? The advisors need the cash and Popeye is gullible. On Wall Street the deals adjusted when the advisors changed firms looking for a new deal every five to eight years. The recent Luminous departure shows that the advisory contracts need to be adjusted. The new contracts are written by experienced firm...