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Why a Longtime Wirehouse Exec Broke Away... Sort Of

By Murray Coleman October 6, 2017

Richard Calhoun Jr., a longtime wirehouse executive and advisor, is finally jumping full bore into the breakaway movement. Sort of, that is.

The former managing director at FiNet — the only independent network for advisors offered by a wirehouse — is now president of Collins Investment Group. The Bethesda, Md.-based wealth manager, which oversees more than $800 million, made public the hiring earlier this week.

“I’ve known this firm’s CEO, Bob Collins, for more than a decade,” Calhoun says. “We actually started seriously discussing this move about nine months ago.”

Before deciding to make such a major career switch, Calhoun spent several years heading up FiNet’s innovations and growth team. Along the way, he became steeped in Collins Investment Group, a FiNet affiliate and member of the FT 400 list of elite U.S. advisors.

“I wasn’t actively looking,” Calhoun says. “But it turned out to be exactly the type of opportunity I’d always hoped someday would come along.”

The former Merrill Lynch advisor and Morgan Stanley branch manager recently took a break to discuss with FA-IQ his underlying reasons for changing firms.

Q: What was your main reason for making this move?

A: Instead of working for a big firm, I’m now a business owner of a growing wealth management company. I’ve bought into the firm and now hold a minority stake. Bob is still the majority owner, and we hope he’s going to be around for years to come. The structure is that I’ll run the day-to-day business, which should free up even more time for Bob to work with clients.

Q: FiNet is a pretty unusual animal in the brokerage world, isn’t it?

A: Only one other major brokerage firm I know of really has a similar model: Raymond James. Wells Fargo Advisors and Raymond James both have a traditional W2 business where advisors are employees. Each also has a bank channel. In the case of WFA, it’s more direct, but Raymond James employs advisors who actually have formal relationships with small banks and credit unions. Each also runs an independent network of affiliated advisors.

Q: Given FiNet’s growth, do you see other wirehouses opening indie channels?

A: I’ve asked that myself for years, and I don’t know why they haven’t. It’s kind of odd, in my opinion. They’ve certainly had opportunities in the past to move into more of a multiple channel model. And it certainly has been successful for Wells Fargo. Coming into this year, FiNet was one of the fastest-growing business units at WFA.

Q: How did the idea for you to join Collins’ staff come about?

A: A few years ago, Bob asked me to help interview candidates in his search for a senior-level executive. But he’s been in this industry for 35 years. After his daughter, the thing he’s proudest of is his business. It’s such a central part of everything he does in his life that he just didn’t want to hand over a big part of it to someone he didn’t know.

Q: Besides familiarity on a personal level, did helping to run an indie firm also fit into your long-range goals?

A: Yes. I’d always held out hope that someday an opportunity to move back to the client-facing side of the business would come about. I just hadn’t seen anything that really interested me. This sort of just landed in my lap, which makes me even more convinced that it was meant to be.

Q: Are you considering other IBD options to use as partners?

A: No. At the present time, we’re focused on developing organic growth. As it stands today, we consider our affiliation with FiNet as an operational strength.

Q: What are some of the growth initiatives you’re considering now?

A: The biggest thing I think we need to do is take a look at the next generation of clients. This business has been fortunate enough to create some great referrals over the years, so we’re going to be hiring more advisors and staff to work with expanding our existing relationships as well as servicing younger family members.

Q: Did the ongoing cross-selling scandal at Wells Fargo play any role in your decision?

A: No. To the best of my knowledge, there has been very limited impact in the FiNet world. That being said, many affiliated advisors — who are privately branded — do feel like it has been a nuisance in terms of fielding questions from clients. The bottom line, though, is that we continue to operate as independents.