&Partners has recruited at least 81 teams who generated around $242 million in combined revenue, David Kowach, founding partner and chief executive officer, said in an interview. The firm has ambitions to have 150 teams and $120 billion in assets, according to Kowach, who spent almost three decades at Wells, including as head of its retail brokerage. Executives at the firm have told prospects that it hopes to hit that number by its fifth year, or 2028.

Kowach, along with former Wells brokerage executive John Alexander and the bank’s ex-asset management head Kristi Mitchem, are among numerous former big-firm leaders who have over the past decade switched jerseys to pitch the virtues of being small.

“Scale has become the enemy of great culture, excellent service, good operations, and execution,” Kowach said. “So our model was really based upon knowing in some respects what people were dissatisfied with working at a big place.”

Kowach and Alexander have carved out a niche in part by leaning into a model called Profit Formula that originated decades ago at Wells’ Wheat, First Securities predecessor. Profit Formula brokers are employees of the firm and take home as much as 70% of their revenue — more than the typical wirehouse advisor’s 40% to 50% payout — but they must cover their own real estate and other business costs.

Despite its high retention and recruiting results, Wells’ parent bank executives disfavored Profit Formula because it generated lower margins, recruiters have said. Although the channel still exists, Wells for stretches has closed it to new hires or imposed new fees or lower payouts.

At &Partners, brokers, who join as equity partners, can earn payouts as high as 85% of their revenue but cover their own real estate and operating costs, including a platform fee for technology and compliance, its executives said.

“David and I loved Profit Formula,” Alexander said. “It was a huge benefit. It was the greatest recruiting tool we ever had.”

The &Partners model incorporates “independence with support and a community leadership team of like-minded folks,” said Louis Diamond, an industry recruiter who is not contracted to help the firm hire. It has convinced brokers from both employee and independent broker-dealers, including Wells Fargo Financial Network, to join.

“I can’t think of a firm that has attracted so much in AUM after starting from zero in such a short period of time,” Diamond said. “Many competitors who have similar strategies and have been around for years are in a similar spot or smaller.”

One challenge for &Partners will be to expand its recruiting outside of the pool of mostly Wells and Edward Jones brokers who represent relatively easier pickings because they remain loyal to Kowach, Alexander, and others such as former Edward Jones executive Randy Bradshaw, Diamond added.

“That will be the true test of whether the firm and the business model can keep scaling,” Diamond said. Managers who have been competing for multimillion-dollar wirehouse producers have said they are not often running up against &Partners in recruiting conversations.

By comparison, Rockefeller Capital Management, which was relaunched in 2018 from the Standard Oil founder’s family office, had grown to around $150 billion in assets, including a portion at its asset management division, and 170 teams by the end of 2024. Independent brokerage Sanctuary Wealth, which launched in 2018, has 120 teams and $48 billion in assets, according to its website.

&Partners, which clears and custodies with a Fidelity Investments subsidiary, will also have to add larger teams to hit its asset target. On Thursday, it moved closer to that goal by hiring its largest team, a group of Wells Fargo Financial Network brokers managing $2 billion in client assets.

Amid the tariff-induced market volatility, Patrick Riazzi, Joseph Rhyne, Danny Riazzi, Sterling Swaim, and Patrick Rhyne joined &Partners in Winston-Salem, North Carolina, according to Kowach and Alexander.

The Riazzi, Rhyne & Swaim Investment Group produced $10.2 million in annual revenue, according to Kowach and Alexander. They had transitioned to FiNet in 2022 from Wells’ private client group, according to registration records. Patrick Riazzi and Joseph Rhyne both started their careers with Wheat First, where Kowach also worked, in 1986. 

While firms such as Rockefeller have taken funding from venture capital or family offices, &Partners launched with $45 million contributed by its senior executives along with their friends and family. It has bootstrapped its recruiting by borrowing to fund 50% upfront hiring bonuses and leans on equity to bolster those offers. Kowach, Alexander, and Mitchem own less than 15% of the company, and the rest belongs to advisors along with a minority interest held by the initial outside individual investors, they said.

“Having your advisors be the largest shareholder group within your company is something that I think really sets &Partners apart from others,” said Mitchem, who was CEO of BMO Financial Group’s asset management division after leaving Wells.

To be sure, those equity-laden offers also present risks compared to big firms’ high-dollar recruiting offers. Advisors at other upstarts have had their equity diluted or devalued in future capital raises or had to adjust to new ownership. 

Mitchem and other &Partners executives said that if they were to sell a minority stake, it would not require giving up control or key voting shares.

“It’s a leap of faith to have equity in any privately traded company,” said Rick Rummage, an industry headhunter in Virginia. “You have to have a lot of belief in that company.”

Reprinted with permission.