In the Galleria area of Houston is Guardian Wealth Management LLC, a Registered Investment Advisory Firm with an interesting business model: To provide a home for stockbrokers who want to retire or pursue another career – and continue to get paid!
Securities regulators report over 660,000 registered representatives, with about 15% (almost 100,000) annually retiring or leaving the securities industry to pursue other careers. Since 1970, Guardian’s partners say they have watched scores of co-workers leave their firms which then dealt out their clients to other brokers, often the newest kids on the block.
“Brokers can work for years developing relationships with investors but are then helpless to protect even their family and friends from those assigned to their accounts,” says Guardian’s Founder Jerrod Summers, adding that “Guardian was built as a ‘safe harbor’ for investors – free of widely publicized conflicts at brokerage firms such as tainted research, commission churning and high-load funds, annuities and other products.”
As a registered investment advisory firm Guardian charges annual management fees – approximately 1% – based on assets under management, which is at the low end of the range charged by large firms. Client accounts are held at Fidelity Investments, but Guardian is not limited to Fidelity’s funds or other investment alternatives.
When Brokers leave the securities business they can not retain their general brokerage license. Yet, their licenses usually qualify them as to serve as Investment Advisory Representatives (IAR’s). IAR’s do not advise clients but can share in the income on accounts they bring to a firm such as Guardian.
“Retired brokers can move clients to Guardian and, over time, receive two to three times their “book” (gross revenues earned on their client base),” says Summers, “and even more if their clients’ accounts grow and/or if they chose to continue to build relationships.”
Compared to the commission “grid” at large firms, it’s possible for former brokers to earn the same in retirement as they did while working, with Guardian’s staff doing the work. “Its a win-win-win situation”, adds Summers, “clients receive professional services at a fair price, brokers continue to earn, yet Guardian is profitable.”
Additional information about Guardian Wealth Management, LLC is available on its Web Site, www.guardian-ria.com .