Derek Notman is one of the industry’s original 100% virtual financial advisors. He has given himself the flexibility to travel the world with his family (he’s a Delta Million Miler) by using digital tools, running a fully remote team, outsourcing portfolio research, and automated implementation. Derek is a big believer in automating investment management,
It keeps clients focused on planning and allows me to focus more time there as well.”
Before launching Intrepid Wealth Partners in 2022, a sizable portion of Derek’s revenue went to his independent broker-dealer, NY Life Securities, and to his turnkey asset management platform. Business was good, but nothing like it is now.
Since switching to Altruist, he has reduced overall clients’ fees by between 10-50% while increasing his firm’s earnings.
Derek is still exploring the world with his family, and he’s still streamlining investment management. To show you how he did it, we’ll walk through his transition to launching a fully independent RIA, the economic impact of switching to Altruist, and 3 pieces of advice he has for anyone considering a similar move.
Leaving his independent broker-dealer
I should have done it sooner. It’s been a breath of fresh air, [and] clients love it… I used to stress over b/d production requirements and other people’s agendas. That's entirely gone. I’ve been able to really just focus on clients, family, and travel.”
Derek started thinking about launching his own RIA in 2017. There were certain tools and marketing assets he wanted to use while at his broker-dealer, but he’d regularly get resistance from compliance. At the time, he didn't think he had the AUM or recurring revenue to make the leap–but the thought of breaking away never left his mind.
By 2021, his business had grown sufficiently to the point that he felt comfortable enough to kick off the transition. To manage the process, he made sure he had answers to the following list of questions:
1. How do I get the entity formed and SEC registration set up?
2. What do I need to include in my vendor/tech stack?
3. Can I keep using my 3rd party money manager clients were used to working with?
4. How to make sure I stay above board with my non-compete?
5. How should I communicate with clients about the transition?How do I get the entity formed and SEC registration setup?
What do I need to include in my vendor/tech stack?
Can I keep using my 3rd party money manager clients were used to working with?
How to make sure I stay above board with my non-compete?
How should I communicate with clients about the transition?
It seems silly now, but I had to overcome the fear of clients possibly not following me. I had some worry about my old firm possibly coming after me legally, which fortunately didn’t happen, but is something advisors should make sure isn’t an issue.”
Note: The legal concerns are very real. But they are hardly insurmountable. Before breaking away, get an attorney to review your employment agreement so you know what client information you can and can’t take with you. For all the details on navigating the Broker Protocol and transitioning clients, check out our post on How to Transition Clients to Your New Firm.
Derek was able to transition his clients quickly with Altruist’s digital onboarding. Better yet, his clients were excited about the change due to the combination of lower costs and better technology. The transition also gave him an opportunity to part ways with clients who were no longer a mutual fit.
Streamlined investment management at a much better price
I honestly can’t think of a downside for making the move. A number of upsides though.”
For Derek, one of the main benefits of switching to Altruist was the ability to continue outsourcing portfolio research and implementation at a significantly lower cost to his firm. In addition to opening & funding accounts, reporting, billing, and trading, Altruist gives advisors access to their favorite asset managers for 15 bps or less.
In making the switch to Altruist, some clients are saving almost 50% annually in fees — even at the low end, clients are still saving 10-15% per year.
I was actually discounting my fee 15% or more, just to make it palatable to clients. When I made the move to Altruist, I stopped discounting. I increased my fee back up to what I thought was a fair rate and my clients still saved anywhere from 10-50%. I’m making more, my clients are spending less. It’s fast to use, it’s easier to use."
3 tips for advisors thinking about starting their own RIA
Derek recommends giving yourself at least six months to plan the registration, form the brand, organize brand assets, ensure you follow broker protocol (if applicable), and develop a client communication strategy.
He also suggests that RIAs bring on tech slowly, and start with the essentials (for him it was Altruist, planning tool, and CRM). Once you’re fully up and running, you can determine if you need to add more tech and when it makes sense to do so.
Finally, Derek advises that when it comes to your clients, be very open and informative about what the experience might be for them, communication is key to help ensure trust.
Why make the switch to Altruist?
Outside of the cost, Altruist is faster to use, easier to use, and clients have commented on a better overall experience. We used to have to use forms every time we wanted to change an allocation — print, sign, send in, wait for manual processing — now we can do those things in a few clicks in less than 1 minute. It’s entirely digital."
At Altruist, we strive to make independent financial advice better, more accessible, and more affordable. Our custody solution gives back precious time and capital to RIAs, so you can focus on what matters most: your clients and business.
On one intuitive, integrated platform, advisors can open and fund accounts, trade and rebalance, report, and bill, at a fraction of today’s edging-ever-higher technology costs.
For new firms, existing firms, and advisors planning to make the leap from their wirehouse or broker-dealer, our dedicated customer support team ensures a smooth transition and exceptional ongoing service.
To see how we’re helping RIAs streamline operations, reduce overhead, and elevate the client experience, book a call with one of our advisor advocates today.
This testimonial was given by a current client. Neither Altruist nor its affiliates paid for this testimonial, but we do earn revenue from financial advisors who use our software, from assets invested through our broker-dealer (Altruist Financial LLC) and assets invested in models made available by our registered investment adviser (Altruist LLC). As of the date of this testimonial, the promoting advisor received compensation or other benefits from Altruist through the promoting advisor’s participation in one or more of Altruist’s various programs, which created a conflict of interest on the promoting advisor’s part and may have influenced the view(s) expressed by the promoting advisor. For more details on program compensation and benefits and related conflicts of interest, please visit altruist.com/RIA-testimonial. Views expressed may not represent others’ experience, results may vary. See the Form ADV Part 2A, Model Marketplace Agreement & Fee Schedule on altruist.com/legal for more info.For additional information about the promoting advisor’s conflicts of interest when expressing its views about Altruist or Altruist’s affiliates, please see the promoting advisor’s advisory program brochures, available at https://adviserinfo.sec.gov/.
This testimonial may not represent the experience of others and it is not a guarantee of results.