Kitces: Trying Times Ahead for Advisors

With the sudden hit to AUM fees brought on by the coronavirus crash, poorly run advisory practices may fail, according to Michael Kitces. One of the most well-known and prolific commentators on financial planning, Kitces joined Buckingham Wealth Partners (BWP) with a vision that together they can have a more powerful impact on the future of the industry.

He joined BWP last week with Jeffrey Levine, who with Kitces has been writing Nerd’s Eye View, the popular blog for advisors, at Kitces also speaks frequently at industry events and has founded other businesses, including the XY Planning network for Gen X and Y advisors, and AdvicePay, a payment processing system for financial planning fees. He also was a partner and director of planning research at Pinnacle Advisory Group, a $2 billion RIA headquartered in Columbia, MD. Levine was CEO and director of financial planning for BluePrint Wealth Alliance, based in Garden City, NY.

BWP, with just under 500 employees, recently reached over $50 billion in assets under management and advisement. It includes two businesses: a mega-RIA, Buckingham Strategic Wealth LLC based in St. Louis that manages about $18 billion for families, institutions and businesses around the country; and Buckingham Strategic Wealth Partners, a TAMP supporting 1,000 independent advisors.

In my interview with them this week, Kitces and BWP’s chairman and CEO Adam Birenbaum talked about the advantages of their alignment. Kitces noted he and Levine have been scaling for the last two years, building the brand and visibility, and will soon add their eleventh employee. But as more potential advisory relationships came in through that platform, Kitces and Levine needed to decide which of their advisory firms would get the business – and they wanted to eliminate that conflict.

“Earlier this year we decided to make a change, and I reached out to Adam,” Kitces said.

Why contact Buckingham, when the two advisors could have approached any other mega-RIA? According to Kitces, Buckingham not only had the size and scale, but is also one of the few firms that has succeeded as a national brand. Larry Swedroe, the firm’s chief research officer and a regular contributor to Advisor Perspectives, is another industry heavyweight who has long been a proponent of evidence-based investing and planning. That methodology has also been a focus of Kitces. Another big factor was that BWP leadership, well known to Kitces and Levine, is primarily in its 30s and 40s.