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Company Details
Allworth Financial, originally founded as Hanson McClain in 1993 by Scott Hanson and Pat McClain, has been in operation for over 30 years. The firm rebranded to Allworth Financial in 2019. The mission of Allworth Financial is to provide comprehensive financial planning and investment management services, focusing on a fee-based model that prioritizes client needs. Key growth milestones include the creation of popular financial radio shows and podcasts, hosting in-person seminars and workshops, and significant growth through acquisitions. Notable acquisitions include Redrock Wealth Management and RAA. The firm has completed over 30 acquisitions, with some notable integrations ranging from $90 million to $2.2 billion in AUM. Allworth Financial operates primarily in the United States, with its headquarters located in Folsom, California. The firm has a national presence with physical offices in multiple states and clients in all 50 states. The primary office locations include Folsom, CA, and Walnut Creek, CA. The firm has 41 office locations across the country.
Allworth Financial positions itself as a client-centric, financial planning-focused firm with a strong emphasis on operational efficiencies and streamlined processes. The firm offers a comprehensive suite of services, including retirement planning, investment management, tax, estate, and Medicare planning. Allworth Financial serves a diverse range of clients, including Ultra High Net Worth, High Net Worth, and Mass Affluent individuals. Typical clients include retirees, business owners, professionals such as dentists and physicians, and employees in sectors like airlines, healthcare, telecommunications, and energy production and distribution.
Allworth Financial offers a customized and individualized investment program for clients, focusing on their specific goals and objectives. The firm provides continuous investment advice and makes investments based on the individual needs of the client. Various investment strategies are provided under the Program, with a specific investment strategy and investment policy crafted for each client. Allworth Financial offers various investment strategies including: Core-Satellite Core-Satellite Plus Dividend Stock Dynamic Dynamic Income ESG Factors Income Pure Index Large-Cap Stock Buffered Equity ETF strategies These strategies are available to all clients, with customization based on individual client needs and objectives. Allworth Financial implements its investment philosophy through both discretionary and non-discretionary asset management services, using a mix of mutual funds, ETFs, and other investment products tailored to client needs. They use both model portfolios and customized, bespoke portfolios based on client needs. Assets are managed in-house and also through third-party investment advisors (TPAs) for certain client portfolios. Investment Options: Allworth Financial offers a variety of investment options including mutual funds, ETFs, individual equities, and fixed income positions. Specific investment strategies include: Core-Satellite funds Pure Index funds Income generation 100% DFA funds SMAs Environmental & social funds. Allworth Financial's investment team is led by the Chief Investment Officer, Andy Stout, and includes various professionals responsible for portfolio management, research, trading, and client service. The team consists of 10 full-time members with MBAs, CFAs, and CFPs, and another 10 people dedicated to the trading department.
Locations
Company Videos
Acquisition Model
Full Acquisition Only
Yes
Yes
Max Cash: 90%
Max Equity: 35%
While deal terms may vary, Allworth's standard terms is 70-80% of initial consideration paid when closing conditions are met with the remaining 20-30% released at the retention calculation date which is typically a 12-18 month period.
"We would absolutely want you to become an equity owner. We believe strongly in the story." - John Bunch, CEO
"We want our partners to roll over equity. They, we want them to be the same shareholder, same class as Scott and myself." - Pat McClain, Founder
In the revenue sharing arrangement, Allworth will absorb all business cost with the exception of staff compensation. 40% of revenue will remain at the local office and partner/advisors will allocate staff comp out of that 40% pool. Any new business brought in by partner/advisors will be a share of revenue. 40% if it is self sourced, 20% if sourced by Allworth.
Mandatory Points of Alignment
Partners will take the Allworth brand on day one. Allworth may be open to a period of co-branding.
Partners will centralize all back-office functions. This includes compliance, HR, billing, technology, marketing, trading, and more.
While Allworth actively promotes expanding the services it adds to the advisors tool kit, they fully leave the recommendation of all services to their advisors.
Partners will have significant input on staffing compensation, but management of the P&L will rest with the central Allworth team.
Allworth distinguishes itself as a planning-centric financial services firm, and the client experience revolves around evaluating the "7 Personal Decision Points." While Allworth provides advisors with guidelines on the process, the advisor has the flexibility to tailor the client experience accordingly.
While practice management protocols are encouraged, they are not mandatory for partners. Allworth's HR department plays an active role in mapping existing staff within the local partner office to the broader Allworth organization.
Allworth prefers its partners to utilize its central investment platform and supports partners in transitioning to its platform by allowing ample time for this change. However, it also permits partners who prefer to manage some of their portfolio locally, as long as this is done under Allworth's centralized trading and oversight guidelines.
Advisor Value Proposition
Allworth Financial significantly reduces operational responsibilities for advisors, enabling them to focus on client relationships and business growth. They centralize compliance, legal, accounting, HR, technology, and other non-revenue-generating activities. Advisors benefit from a dedicated back-office team that supports administrative tasks, compliance, HR, billing, and client service needs.
"I want this chapter of your career to be your best chapter. Whatever that might mean to you. I want this to be your best chapter." Pat McClain
Allworth provides a central planning team designed to support the advisor in building out their client experience offered. This central planning team has the ability to conduct advanced planning for clients with more complex financial situations. A new partner advisor is not obligated to adopt the entire financial planning process but must align philosophically with Allworth on how to build and implement financial plans for clients.
Allworth Financial significantly reduces operational responsibilities for advisors, allowing them to focus more on client relationships and business growth. They centralize various administrative tasks, including compliance, legal, accounting, and technology management. This centralization streamlines processes and reduces non-revenue-generating activities for advisors.
Allworth Financial offers a wide selection of comprehensive services, including tax preparation, tax planning, estate planning, qualified plan expertise, and risk management. This makes the firm more attractive to clients and provides opportunities to increase revenue.
Allworth's centralized marketing is what drives the organic growth of the business. In 2021, Allworth generated $1.2 billion in AUM through its internal marketing efforts. They spend $6-7 million annually on their direct marketing efforts. Allworth prides itself on having a repeatable marketing process they are able to implement within partner offices. This drives organic growth opportunities for the lead advisor(s) of that office. The strategy and execution is driven by their EVP of Marketing, Brad Boekestein. Allworth claims that many of their partner advisors see tangible, measurable organic growth within the 12 months after the transition/integration is complete. Allworth Financial employs a multi-pronged approach to marketing, driven by four distinct growth capabilities: advisor-supported growth, media-driven growth, sales-driven growth, and nurture. Their marketing team acts as an agency to support advisors' initiatives, and they participate in custodial referral programs.
Marketing Support:
- Centralized marketing services through a 28-person marketing team.
- Participation in custodial referral programs with groups like Fidelity and Schwab.
- Inside sales team to re-engage prospects and line them up for appointments.
Results:
- Firms have gone from single-digit net flows (3-5%) to double-digit net flows (10-12%) post-acquisition.
Quotes:
- "We have seen numerous cases where we've helped recover those firms and gone from negative net flows to positive net flows in a short period of time."
Allworth Financial supports the development and mentorship of next-generation advisors through structured training programs, mentorship initiatives, and formal education programs. They provide skills training in business development, client relationship management, and portfolio construction.
Training and Development:
- Structured training programs and mentorship initiatives.
- Skills training in business development, client relationship management, and portfolio construction.
- Opportunities for equity participation and roles in firm management for Gen 2 advisors.
AUM Growth
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