Compound Planning, a $1.45 billion tech-focused RIA created through acquisition last yearadded more recruits in the first two months of 2024 than in all of 2023.
With 15 new advisers this year, five more than last year's total, Compound has been taking on recruits at a much higher rate than CEO Christian Haigh's stated target of about two a month. Nine came on board in January, one in February and four more joined earlier this month, according to their LinkedIn profiles, bringing the number of advisors to 25 out of 70 total employees.
Almost all made the move from Personal Capital via Empower, which bought Personal Capital in 2020 and transitioned all employees to its own brand by early 2023. One, Michael O'Connor, joined this month from Advisor Partners.
“We recruited each counselor individually,” Haigh said. “It was funny when the nine councilors joined in January, and they went into our Slack communication system, they said, 'Wow, these are all my friends!' So we were able to keep it pretty quiet, but I think after the first wave of advisors came in, we had a lot of other advisors and other team members there.
“I think the business model resonates with those advisors,” he said. “Personal Capital is in a similar category in the sense that they have their own proprietary dashboard and customer experience – just like us. And we're at a point in time, something like 10 years later, doing exactly what Personal Capital was doing when it was founded. But we're at a point in time where there are new technologies available and there's a lot more that we can build on to create a really great experience.”
“The team, the beautiful client panel, and the robust service offering—including in-house tax consulting and access to alternative investments—is a combination that I simply couldn't find at other firms,” shared Compound Senior Vice President Matt Buenafe in a LinkedIn post. last week.
Some components of Compound's technology suite are built in-house, such as onboarding, account opening and a proposal generator. Others, including reporting and reconciliation, rely on API connections to third-party vendors.
“We have a great product and engineering team and we invest a lot of money in new R&D, every month we are releasing new features and we will continue to do so as we scale and build what I would call an operating system for wealth management,” Haigh said. “We're taking what we've learned from similar businesses like Mint, which also has a dashboard, and trying to build the next wave of bionic customer experience.”
In the third quarter of 2023, Haigh's 2-year-old RIA platform Alternative Wealth, which had been working to build back- and middle-office software to help advisors manage their books, acquired Compound, a “financial advisor and technology-enabled tax for tech executives and the creation of a self-described “digital family office” overseeing about $1.1 billion in assets.
“Building an exceptional customer experience was on the roadmap, but we hadn't started construction yet,” explained Haigh. “When we met Compound and there was an opportunity to acquire the firm, we realized that they were focused solely on the customer experience and created what I personally thought was one of the best customer experiences I had seen in the industry. ”
He pointed to an interactive client spreadsheet that allows advisors and their clients to collaboratively create personalized financial plans.
“You have all these advisors who have a personal relationship with their client, and then you have the robo-advisor movement like Wealthfront and Betterment, where it's just completely automated,” Haigh said. “We are somewhere in the middle. We have advisors who have great relationships with their clients, but we accompany that with software that enhances that experience so that clients can interact with our firm without having to speak to their advisor every time they do so. .”
Eventually, the plan is to add another line of business that combines aspects of the technology and wealth management businesses into a white-label service for tangential financial companies looking to incorporate wealth management without the headache of bringing in-house advice. . The idea, Haigh explained, is to capture more tech-savvy young earners ahead of a widely expected generational transfer of wealth.
With corporate headquarters in New York City, Haigh is based in San Francisco, and all of Compound's advisors work remotely from locations across the country. New advisors behave like W-2 employees and adopt the Compound brand.
The complex recently hired a sales director, a recruitment consultant manager and a tax consultancy manager to support its ongoing recruitment efforts. The firm is targeting clients who are primarily between the ages of 30 and 55 and have investable assets of $1-10 million. Haigh said he expects to attract new advisers as well.
“They are still excited to continue to grow both educationally and with their book of business,” he said. “They tend to be hungry and excited about something new and work with clients who also fit that category. There's a 30- to 50-year-old client that's more digital native, and we really resonate with that type of advisor and clientele because, typically, we have a better client experience that's specifically targeted for the type of clientele they're working with. .”
The firm is using Charles Schwab and Fidelity for custody services.