In May of 2020, we wrote about a wave of consolidation among the bigger firms in the Wall Street world. Schwab bought TD Ameritrade and merged, and Goldman Sachs bought Folio Institutional and made it a subsidiary. We noted at the time that both of those transactions would impact our clients directly, as we had to make some account changes here and there — but the transactions had only an indirect impact on the way we do business here at Horizons, and didn’t impact our independence.
Over the last year or so, we’ve seen a flurry of transactions of a different kind: this time, it’s been smaller, local investment advisory companies being acquired by national firms. As a trend, it’s been going on for quite a while, and it’s resulted in a significant degree of consolidation. Reporting on some recent research reveals that over the last decade or so, the largest 2% of “registered investment advisory” firms have grown to account for more than 50% of all client assets, mostly by this sort of acquisition. Even some of our friends in the sustainable investment part of the industry have sold to the “mega-RIA” firms recently, mostly in order to facilitate the retirement of their founding generations. The folks we know who have made these deals are all pretty sure that the transactions will be good for their clients, and for the employees who remain, and we certainly hope so too!
Here at Horizons, meanwhile, we’re carefully guarding our independence. At the beginning of 2013, Kim and I set out to make Horizons into a thriving independent RIA firm; it took about six months longer than we expected, but by Independence Day of 2013 we had completed the process and celebrated with an Open House. And now that we’re celebrating the company’s 14th Independence Day, we want to reassure everyone that we have every intention of remaining independent, and getting even better.
We’re growing pretty quickly, in part by bringing in some dynamic young advisors who are working hard to serve new clients. New advisors and new staff coming on board in the coming year or two will help make sure that Horizons can continue doing this work for a long time to come. Remaining fully independent has had a few key benefits to our clients: it’s meant that we can (A) more easily provide highly customized advice to all of our clients, (B) keep our fees low, simple, and transparent, and (C) live up to our fiduciary obligations, putting our clients’ interests ahead of our own.
Here’s hoping you have a lovely Independence Day!
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