Q&A with Robert Milligan Jr. – Managing Partner, 1792 Wealth Advisors

AdvisorHub’s Publisher & CEO — Tony Sirianni — asked executives from top firms their thoughts on the wealth management industry. Here is how Bob Milligan, Founder & Managing Partner of 1792 Wealth Advisors responded.

Tell us about 1792 Wealth Advisors and how you got started.

1792 Wealth Advisors is an independent wealth management practice that was formed six years ago by myself and a couple of partners. We’re based in Morristown NJ, with advisors in the Northeast and we partner with Raymond James as our platform provider.

Before launching in 1792, I spent the better part of two years doing due diligence on going independent. My goal was to find a platform where I could establish a practice that was right for serving my clients at the same time was an attractive home for other advisors. The vision was to build something larger and more substantial; a place where I could go to my advisor friends in the market and say, “this is something you really should be thinking about, going independent with us.”

Why did you choose Raymond James?

The first reason is Platform. We were coming out of a wirehouse where we had a strong platform. Raymond James offered us a platform that gave us all the support and resources we had before, which was a surprise to us. We started off thinking we would have to give up support and resources and found that wasn’t true. In fact, we actually got a lift in certain areas by moving to Raymond James.

The second big reason is the Culture. Raymond James is a service first culture, and they believe in putting the interests of clients above all else. And it’s really true, from the CEO on down, they believe it. They aligned with how we felt about our clients, and we knew they would be great partners for our advisors.

You started the practice in 2017, but you’ve been in the business for a lot longer, right?

I grew up in the business like a lot of advisors did, went through the Merrill Lynch Training program, cold calling my way to success. It was a very different business back then, but you just did it, survive and advance to the next level, and build your business.

Somebody once said to me, if you work like nobody else will for five years, you can live like nobody can for the rest of your life. And I took that very seriously.

You were doing well at a wirehouse, right? What was the trigger to go independent? What prompted it?

It was a decision that I wanted the autonomy and the flexibility to serve my clients the way that I thought they should be served, without the interference from management. It’s about putting the interests of clients first and I no longer felt that my previous firm shared the same values of putting clients’ interests ahead of all else. It was often about profits, and margins, and just pure numbers and that’s not what it was about for me.

I was a producing manager of a branch of a large wirehouse. It was a great branch – 11 Advisors, $800 million in assets and about $7 million in revenue. It was a great opportunity to manage. The Advisors were great advisors, good people but they were unhappy and really did not like the firm we worked for…it was the same issues then, as it is now… general feeling of not being treated fairly by the firm or management, compensation issues and changes, shoot first compliance culture, senior/complex management that doesn’t care about me or my clients, and a restrictive culture. I felt like I had to leave to truly monetize my business.

I looked at it and said, it would be pretty amazing to have a branch where advisors were treated right, got all the operational support of a large wirehouse but got the flexibility and economics of independence. The goal was to replicate that branch and the funny thing about that goal; We just had our 6-year anniversary, and we have $1.2 billion in AUM, 15 Advisors, and about $8 million of revenue and most importantly our advisors and team members are happy. We also pushed a large portion of the profits into the pockets of our advisors. They take home a lot more than they did before and now have true equity ownership in their businesses.

As someone who took their book and went independent, if you had to start all over again in this environment, right now, what would be the Do’s and Don’ts?

I’m still an active producing manager at 1792, so I have a producer’s perspective.

Here are the Do’s:

Do it Sooner. I waited a long time; the independence option was still developing as an industry trend, and I was concerned about making the change and leaving the perceived security of my firm. I should have done it sooner. I have never been happier in my career. And if you are concerned about going it alone, we are here to help.
Look at All Your Options. There are a lot of different structures and business models in the independent space, and there is still the option of going wirehouse to wirehouse. Get a feel for the entire range of possibilities, including long term value and payouts, before making your choice. Typically, this is your last stop so make sure it is the right decision.
Shop Around. Once you’ve chosen the type of firm you want to create, what you want to build for yourself and your family, dig deeper with your due diligence to make sure your beliefs and values are reflected in any potential partner.
Here are the Don’ts:

Don’t Go It Alone. The right partner can make a world of difference for you in terms of your transition, how you build your business, and how you service your clients. Your comfort with every aspect of the partnership is important and shouldn’t be minimized. We found the right partnership with each other and Raymond James.
Don’t confuse Equity and Enterprise Value Potential with Compensation. Going independent creates ownership and equity in your business. This should not be confused with forgivable loans and deferred compensation. They are not the same from a control, valuation, and tax treatment. But each independence option has different equity potential, too. Make sure you take the time to understand what your business is worth today and down the road.
Don’t Ignore the Business Owner Mindset. You’ll no longer be an employee at a wirehouse, you’re going to own your own practice. You’ll pay attention to both sides of the balance sheet and profitability. You will have a direct say in how much you make and how you serve your clients. You’ll think like the CEO you are.
Tell us more about the Business Owner Mindset.

It is about changing your mindset as an advisor, from being an employee to thinking about your business as a business. You’ll be thinking about building the business and maximizing the equity or value of the business. Once you’re in the right environment, with the ability to conduct business the way you want, maximizing the equity comes down to scale and efficiency. At 1792, we’ve created an environment that supports our advisors fully to help them maximize the value of their business.

You’ve mentioned Maximizing Equity Value a lot.

Yes, because that is so important, and it’s a unique piece of the value proposition we offer advisors who are part of our practice. In fact, we’ve given it a name: Alpha-Equity. We all know about Alpha in investments, the excess or abnormal rate of return in relation to a benchmark. Alpha-Equity is the added enterprise value advisors can participate in by being part of 1792 Wealth Advisors, leveraging our advisor-run culture and the extra support we offer. The enhancement to an advisor’s practice enterprise value can be significant.

What does it mean to join a practice that is run by practicing advisors?

It means everything. Everyone at 1792 knows what you’re going through. We all transitioned to independence, and we all are currently taking care of our clients, too.

We know what keeps clients up at night, and the concerns they have when there is a correction, or something changes.

And we understand what it means when a client trusts you with their goals and financial futures. We help you with resources and support to earn and maintain that trust. I think the perspective that comes from the fact that everyone is working with clients directly makes a huge difference.

Thanks, Bob. What happens next?

Advisors interested in exploring independence should give me a call. I’m happy to talk about the industry and this practice that I’ve created with you.

360 Mount Kemble Ave. 3rd Fl. Morristown, NJ 07960
T. 973.866.5270 — F. 973.866.5320

Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. Investment advisory services are offered Raymond James Financial Services Advisors, Inc. 1792 Wealth Advisors is not a registered broker/dealer and is independent of Raymond James Financial Services.

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