Marty Bicknell jumps into the mass market with no 'robo-advisors' and a missionary zeal

Marty Bicknell has sat back and watched NestWise close, Merrill Edge boom and a world of online RIAs aimed at the mass affluent market throw off heat — but mostly burn cash.

With that invaluable intelligence and several years of tinkering in his own skunk works, the chief executive of Mariner Holdings, with a combined $24.5 billion of assets managed in its RIA and asset manager, has launched FirstPoint Financial — a venture that promises real financial planning for everyone with no set minimum asset level. Bicknell is also chief executive of FirstPoint.

“It won’t be robo-advisors,” he says. “We’ll use technology, but it’s real people using real advice. These aren’t call centers.” Mariner recently upgraded its technology by replacing its old software with Orion. See: Orion wins a $2-billion RIA account from Advent after two very long drives across the prairie. The company is also making heavy use of eMoney andMoneyGuidePro — two technologies it has long used — to crank out financial plans. See: MoneyGuidePro back on a roll after the.

$100 million and counting

One obvious difference between FirstPoint and other ventures aimed at the low-balance crowd is that it hits the ground running with an experienced staff and a $100-million-plus book of business that is essentially being segmented from Mariner Wealth Advisors, manager of $6 billion of mostly high-net-worth assets.

The approach is more similar to the venture Roger Hewins launched a year ago. See: A $2.5 billion RIA makes its mass-market bid for thousands of new clients. Hewins Financial Advisors LLC launched Key Access Services, aimed at smaller investors and, in particular, smaller business owners and the children of wealthy clients. Hewins Financial and its affiliate, Wipfli Hewins Investment Advisors LLC

FirstPoint will charge a fee based on assets of 1% or 1.25% that covers all of a clients costs including financial planning.

Making the rich richer

FirstPoint already has five advisors dedicated to the venture, including Brian Leitner, who will oversee it under the title of senior vice president of practice management.

The business already has its own office spaces in Tulsa, Okla., Omaha, Neb., and Leawood and Pittsburg, Kan. The plan is to expand rapidly to Cincinnati and Madison, N.J., and have 25-plus employees in two years. Though FirstPoint has dedicated space, it will be co-located with Mariner’s core offices.

Brian Leitner will lead the new
venture.

For Bicknell, FirstPoint is an expression of his long-held desire not to just have a practice where he helps rich people to stay rich or get richer. Mariner Wealth Advisors has always — albeit quietly until now — had no set minimums. But smaller accounts were never handled efficiently and cohesively in a way that satisfied him. in the past two years, Mariner has begun to put more organization around smaller accounts — which he loosely defines as falling into the $200,000 to $1 million range.

Now, it’s game on.

Part of the big picture

“I don’t consider this to be an afterthought,” Bicknell says. “This is about an obligation to me.”

Still, he allows that filling that obligation is eased by Mariner’s structure and a heretofore under harvested windfall of hot mass- affluent leads. His staff is segmented into financial advisors who concentrate on serving existing customers and eight other people who concentrate on business development and gather assets by methodically working centers of influence such as accountants. Mariner acquired the wealth management arm of an accounting firm. See: Big Midwestern RIA buys itself a national presence in deal with CBIZ.

To an extent, Mariner’s start resembles that of Merrill Edge, which has matched advisors, often junior ones, with customers with lower balances and managed their accounts with a modified model. See: The amazing success of Merrill Edge and why some legacy Merrill brokers think it’s eating their seed crop.

By contrast, NestWise did the equivalent of planting apple seeds rather than six-foot saplings — both with establishing advisors and winning clients. See: NestWise is starting to take shape and take flight under LPL’s wing — and from under Schwab’s shadow.

Tim Welsh: All Marty had to
do was bifurcate his clients, put
a stake in the ground and
say: we’re in business.

FirstPoint is certainly entering a crowded field but appears to be poised for success, according to Tim Welsh, president of Nexus Strategy in Larkspur, Calif. He cited a statistic in Corporate Insights showing that there are now 59 online financial advisors or platforms aimed at investors.

Online advisors are growing assets at tremendous rates but are still tiny in absolute terms. See: Looking more like Windhaven after a revamp, Wealthfront names a noted academic CIO and boosts its assets 15-fold.

Pulling the trigger

But the giant difference with FirstPoint is how low its client acquisition costs are relative to pure startups.

“All Marty had to do was bifurcate his clients, put a stake in the ground and say: We’re in business. If you saw the P&L on NestWise, you’d never pull the trigger. Break even could take 20 years. The so-called robo-advisors just have free money from venture capitalists.”

One similarity between FirstPoint and other mass-market startups is the utilization of model portfolios, which is to say a finite number of pods of off-the-shelf intellectual capital to which it can plug in. Still, the investment wisdom emanates from Mariner’s CIO, and care is taken to customize asset allocations.

Though Bicknell says that this venture is more about doing the right thing for investors, he says it also represents his optimism about the up market direction in which the big national brands are headed. Accounts below $1 million and the advisors who serve them have consistently been shed, marginalized or simply not pursued.

There are no shortage of firms looking to fill that gap including: Edelman Online, Wealthfront, Personal Capital, Betterment, eSavant, and SG Select. Until recently, Bloomberg was on that list to some extent. See: Bloomberg warns that BloombergBlack is shutting down-