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Sep 15, 2022 12:34:00 PM Boston Cardinal

Firms in Focus: Burney Advisor Services

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The parent company of Burney Advisor Services (BAS), The Burney Company, has been an RIA since 1974. Through the BAS platform, advisors looking to launch or run their own RIA can now utilize the firm’s investment management resources and technology tools while remaining independent. This article focuses on the firm’s tagline, “The support you need, the income and independence you deserve.” 

We met with Lowell Pratt, President of The Burney Company, and Richard Mitchell, Vice President of Business Development for BAS, to take a deeper look into the BAS RIA support platform. The leaders of the firm shared their thoughts on how advisors can launch their own RIAs using services provided by their firm, how existing RIAs can partner with them, and how they’re incorporating innovative tools into their investment management offerings.

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Who is BAS?

General Jack Burney founded BAS parent company, The Burney Company, based on his personal success utilizing his analytical approach to equity valuation to create superior performance. Located close to Washington, D.C., the firm’s primary client base included public servants working at the Pentagon and other government sectors. Experiencing tremendous growth through the years by servicing their clients, The Burney Company made significant investments in their people, technology, and wealth management resources. In August 2022, the firm launched their new division, Burney Advisor Services, built to serve the unique needs of breakaway and independent RIAs.

How can advisors affiliate with Burney Advisor Services?

Building an RIA from scratch can be overwhelming. It takes an investment advisor a tremendous amount of time to get the legal and compliance parts of the firm set up. From there, technology systems are needed to run the practice, but even knowing which ones to subscribe to or develop is a behemoth undertaking. Investments might need to be transferred from an old firm to a new custodian. New branding, marketing, and a website might be needed too. As day-to-day operations eventually normalize, portfolio management and account service responsibilities start to come back into the picture. 

BAS offers support to advisors, alleviating the burden of handling everything on their own. When investment advisors partner with BAS, they are given the flexibility to select the level of support they need to run their practice. The firm offers advisors a few primary ways to affiliate, with several customizable service options: 

  • At the Silver Level, investment advisors receive an Outsourced CIO offering that provides research, investment models, and market commentary; this is an ideal offering for existing RIAs who already have an established technology suite and wish to elevate their investment management services. 
  • The Gold Level adds a complete technology package ideal for existing RIAs looking to upgrade and breakaway advisors looking to launch their own RIAs and also need investment management services. 
  • The Platinum Level adds fully outsourced investment management where BAS assumes responsibility for trading accounts and also incorporates several more sophisticated equity models, such as 130/30 long/short and ESG.

Right Fit Investment Advisors

While exploring the RIA model is alluring, there are many obstacles associated with bringing an RIA launch to completion. The costly and time-consuming nature leads to many advisors – who may see the big-picture benefits – falling short of executing on their vision. 

Established RIAs greatly benefit from partnering with BAS, especially those who are looking to integrate more services and solutions into their practices through strategic partnerships. BAS also provides solutions for advisors who are evaluating how to go about establishing their own RIAs, particularly advisors with the following characteristics: 

  • Looking to break away from running their practice exclusively with a broker-dealer and set up a practice as an RIA only, or a dually registered firm (both SEC for their RIA and also hold their Series 7 to continue offering commission based products). 
  • Seeking to bring in a strategic relationship with an active management approach without hiring an internal team of CFAs or paying exorbitant fees associated with other SMAs/BDs.
  • Wanting to launch a new RIA without incurring the significant expenses associated with cybersecurity, back-office systems, technology integration and other behind the scenes systems required to run your practice.
  • Thinking about outsourcing all of their investment management to spend more time building client relationships.

What is the cost of doing business with BAS?

BAS offers flexible support options – including research, analytics, active equity resources, CIO support, and full-service portfolio management – and encourages advisors to choose a structure specific to their practices. The straightforward pricing structure appeals to advisors differently depending on whether they’re looking to breakaway or are already an existing RIA needing to outsource certain services. 

An important aspect to point out is that advisors receive a 100% payout rate on fee-based revenue. The cost of doing business is determined by the level of support selected. 

  • Silver is priced at 10 bps: Ideal for existing RIAs looking to bring an outsourced CIO to help with investment research, asset allocation, and investment model design.
  • Gold is Silver plus Technology Subscription costs with a 25% markup: Great solution for investment advisors leaving the broker-dealer space, requiring help with designing a tech stack, and wishing to do their own trading using an open architecture platform or leveraging investment models designed by BAS.
  • Platinum is Gold plus outsourced trading and access to additional, more sophisticated model accounts for an additional 10 bps: Fits well with practices that want to fully outsource all aspects of investment management, effectively using the firm as a Turnkey Asset Management Platform (TAMP).

There are certain services the firm does NOT offer advisors that are important to mention. Advisors who partner with BAS are responsible for establishing their own: 

  • E&O coverage
  • Compliance
  • Office space
  • Legal representation & contract creation
  • Marketing

While BAS does not offer these services to investment advisors, they do have preferred vendors and outside providers who make these services available to advisors at negotiated rates when possible.

What are the key takeaways to think about?

An agreement to affiliate your practice means you’re still establishing your own RIA with your own ADV. BAS provides support resources that are completely behind the scenes, giving you the option to share as much or as little about your relationship with BAS as you like with clients. When you partner with BAS, you enter into an annual agreement.  BAS believes that if an advisor no longer feels they’re benefiting from the relationship, then advisors should have the option to take their business elsewhere. This is a very uncommon practice across the industry. Our biggest takeaways are: 

  1. Launching your own RIA with the right people who have experience is cost-effective and stream-lined with BAS.
  2. A partnership with BAS is flexible and doesn’t require a long-term commitment. 
  3. Existing RIAs looking to outsource services can benefit and build succession plans in this type of model. 
  4. Advisors who want to focus less of their time and energy on technology and investment management will benefit most from a partnership.

If you want to learn more about Burney Advisor Services or start exploring other options, reach out to us and schedule a consultation. We can dig into the details and take you through the process.

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