Vince Fertitta on Breakaways, Control and Valuations
October 2024
In just six years, Sanctuary Wealth has established itself as a premier destination for breakaway wirehouse advisors. Thanks to its leadership of former wirehouse executives and seasoned independent operations experts, Sanctuary has a unique perspective that can help those making this transition grow and ultimately thrive as independent financial advisory firms.
Vince Fertitta, President of Sanctuary, has overseen recruitment for the firm since it launched in 2018. He believes the demographic realities of the wealth management industry and the U.S. population will remain primary factors in the continued growth of this sector of the industry and Sanctuary in particular. These trends will continue to draw advisors out of the wirehouses toward independence, he explained.
As Sanctuary’s annual OASIS conference kicks off in Hollywood, Florida, I spoke with Vince to get a better idea of where he sees the industry heading and what advisors are looking for today.
AdvisorHub: Is the breakaway trend accelerating, slowing down or staying the same?
Vince Fertitta: The breakaway trend is accelerating after a temporary slowdown following the Covid spike in activity. We are expecting a big 2025. Additionally, the value proposition that independence provides to potential breakaways has never been more compelling. With so many advisors retiring and trillions transferring into the hands of a younger generation, elite independent advisors have an incredible opportunity to build value in their own businesses for years to come. This message resonates with wirehouse advisors and will likely add to the acceleration trend.
AH: What is the single most important reason advisors are going independent today?
VF: If I had to sum it up in one word, it’s control – over how and where they serve their clients, their income and the value of their life’s work. Advisors are betting on themselves on all fronts. They want better access to products and solutions that enable growth, easier methods of communication and marketing and a pricing schedule and structure that delivers the flexibility and control to run their own businesses. In the end, they do not want to be beholden to any one financial institution, shareholder or constituent – they want to deliver a superior product to their clients as they see fit. They want control.
AH: With the cost of capital expected to come down next year, how will that impact valuations?
VF: Certainly, the potential decline in the cost of capital may positively impact valuations, but that is just part of the story. With so many new entries into the aggregation business, competition will likely have a larger impact on valuations than lower interest rates. The demographic projections of the wealth business – both of retiring advisors and clients benefiting from the Great Wealth Transfer — are incredibly attractive and will remain that way for the better part of a decade. With more investors interested in participating in this lucrative space, I expect valuations to remain strong.