Consulting Firm Rollups Bad for Independence

I was a relatively early adopter of LinkedIn. I’m not sure when but based on the headshot I’m guessing it has been a minute. I have 1,163 connections. I’m guessing, but probably 50% of them are hoping to sell something to my clients, 25% are hoping to sell something to me, and the last 25% are colleagues, clients, and friends from the last two decades in retirement consulting.

Part of the 25% hoping to sell something to me are folks from the myriad of roll-up firms in the retirement/investment advisory consulting space. We’re not going down that road, but I have a policy not to decline “connections” on LinkedIn. If nothing else, it helps me stay aware of what our competitors are doing and provides an opportunity to think about issues in new ways.

I was struck recently when a recordkeeper thanked a fiduciary consulting firm for allowing them to be the Title Sponsor of the consulting firm’s Sales and Leadership Retreat. It looked fun! They rented out a bar and had a live band.

It struck me because our leadership retreat is coming up next week. There is no Title Sponsor. We’ll debate ideas about how to serve our clients best and make critical decisions about how to allocate time and capital in support of our firm’s goals and values. We’ll eat together and invest in connecting with each other and our clients.

These meetings are important for our continued success, but they do cost money. Employees will fly in from across the country and lodge in Portland, and none of it generates revenue. These are investments in the success of our clients, our teams, and the firm.

We don’t have a Title Sponsor, not because there aren’t firms that would be happy to pay for that visibility, but because it is fundamentally inconsistent with the independence that we believe is required to do the work we do.

Clients depend upon us to advise on investment strategy and product utilization, make recommendations regarding services that pay compensation to third-party providers and evaluate recordkeepers to manage the health and fiduciary risk of the plans we serve.

I feel fortunate that in our 19 years as an independent firm, I haven’t had the misfortune of being deposed. However, given the current environment, I am also confident that I will at some point. My mother is a lawyer and I remember listening to her recount stories of the depositions she took.

If I am eventually deposed, I sleep comfortably knowing that our firm has no conflicts that would be “uncomfortable” if brought to light during litigation. No recordkeepers that won client RFPs, but also were sponsors of the firm. No investment managers with responsibility for managing client assets, which also take one of us golfing at the country club in the summertime.

I also expect that our clients who may be at the deposition table would agree.


Multnomah Group is a registered investment adviser, registered with the Securities and Exchange Commission. Any information contained herein or on Multnomah Group’s website is provided for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Multnomah Group does not provide legal or tax advice.

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