Sendero cuts own path amid consolidations

SAN ANTONIO, Oct. 5, 2021 /PRNewswire/ -- San Antonio's population of independent registered investment advisors (RIAs) is dwindling. The local firms that thrived by providing "high-touch" personalized service to their clients are being gobbled up by out-of-market giants who are focused on the cash-flow potential they see in the industry.

It's part of a national trend that's been building over the last five years and there's no indication it will slow down. According to a recent report by Financial Advisor IQ, there were 135 deals involving $182.8 billion in assets in 2020. Through August there have been 112 transactions and the value has already matched 2020's $182.8 billion.

"The valuations for independent RIAs are off-the-chart high," according to Elizabeth Flavin Crawford, CEO of Sendero Wealth Management. "Sellers see it as an opportunity to cash out. Their risk profile depletes immensely, and they go to a safer stance that what got them their success."

The consolidation reduces dramatically the level of service clients are used to, along with the options their advisors were able to provide. Crawford likened it to ice cream. "Say you have chocolate, vanilla and strawberry, then all of a sudden no one is selling strawberry anymore, chocolate is just sold in two places but vanilla is everywhere. Not everybody wants vanilla," she said.

Sendero is a fiercely independent RIA with more than $4.8 billion in assets under management. It was founded in 2008 on the understanding that each situation is unique, so it offers distinct specialties to address the changing needs of families and institutional clients. Sendero is built with an eye to the future and succession models in place for sustained service.

"We're like a concierge doctor," she said. "We know the family history, its dynamics, and the risk factors, and we take that into consideration when creating the portfolio which is a tool the client will use to achieve their goals."

Crawford said that focus on client goals gets lost when firms are rolled into larger RIAs. Performance often shifts to metrics as investment decisions are moved out of a customer's market. The client relationship becomes systemized and the one-to-one engagement they once had with their advisor gets lost.

"The advisors who become part of a bigger firm lose decision-making control, because whoever holds the purse strings makes the decisions," she said. "If their headquarters is in New York, they won't know what's good for a client in San Antonio. The SEC requires that we know our customers and we do, which is why our customers are successful. These consolidators see that, which is why they want a foothold in San Antonio."

CONTACT: Sean Wood, 210-788-6207

SOURCE Sendero Wealth Management