The foundation for the firm is a back-office managed account platform, a high-end consulting firm, an investment advisory firm offering a comprehensive mutual fund platform and strategically allocated model investment portfolios to RIAs, banks, trust companies, insurance companies, broker-dealers and CPA firms. US Fiduciary was organized through the acquisitions of four long-standing, diverse firms-Post Oak Capital Advisors Inc., Vista Analytics LLC, West Hills Asset Management and West Hills Institutional. Post Oak is a Houston-based advisory firm that was owned and is still run by Graubart's father. The two West Hills firms were owned by the late John Mansueto, the brother of Morningstar CEO Joe Mansueto, who died tragically of West Nile virus about two years ago.

Advisors can choose to register dually with the firm's boutique RIA, USF Advisors, and broker-dealer, USF Securities, or they can register with USF Securities and become their own RIA. A turnkey asset management program (TAMP) that includes separate account, hedge fund and private equity managers is also part of the picture.

The Structure

Founded in 2003, US Fiduciary has attracted 250 advisors on both the broker-dealer and RIA sides, and has another 70 brokers in the pipeline slated to bring in approximately $75 million more in revenue and about $13 billion more in assets. Currently, USF manages about $1 billion in assets and consults to another $1 billion or so, says MacKillop. This includes assets that were acquired through Vista Analytics, West Hills (institutional and asset management) and Post Oak Capital, as well as growth from new and existing independent advisors. Their consulting assets include the services they provide, i.e. asset allocation modeling and performance reporting, to firms that do not outsource the actual management of the assets.

"Our goal is to facilitate brokers in owning 100% of their business, help them be the fiduciary they want to be, and give them access to a genuinely open architecture enabling them to offer truly objective advice," says Graubart, who is also the firm's CEO.

USF management believes it is well-positioned to exploit the gap that exists between the independent broker-dealer and RIA universes. "We have a distinctive business model," says MacKillop, "that's different from the Schwabs and Fidelitys of the world." He thinks the gap in the business models of those firms, which ignores the large streams of revenues that brokers and advisors currently must sacrifice when going independent. "Even advisors in the wirehouses who are fee-based have a revenue trail that can be significant," he says.

Yet, USF can team with the likes of Schwab and Fidelity for brokers and advisors wishing to affiliate dually with a broker-dealer and an RIA platform other than USF Advisors. USF is custodian-neutral, according to MacKillop, and currently does business with major broker-dealers Schwab, Fidelity and Pershing, among others. He says, "It's the perfect solution for the high-end wirehouse advisor or broker who wants more control over his or her professional destiny and who wishes to 'own' the fiduciary obligation to his or her clients."

MacKillop goes on to explain the detailed structure of their firm and the various options available to brokers. "We work directly with Schwab, Fidelity and Pershing in providing services to our independent advisors who use our asset management platform," he says. "What makes our business model unique is the combination of services we provide through the various entities, [which] allows advisors the opportunity to work with us in the manner most appropriate for them."

Whether it is as unique as management thinks remains to be proven. Here are the options:
        Independent advisors can choose to access only their managed account platform (mutual funds, ETFs, separate account managers) and receive the associated services (reporting, training, billing, etc.).
        Commission-based broker-dealers (at wirehouses or at independent broker-dealers) can affiliate with their brokerage, keep that stream of income through their commission business and use the managed account platform for their fee-based business.
        Advisors can either choose to affiliate with US Fiduciary's RIA or form their own, while accessing their asset management platform and the associated services.

Says MacKillop, "In other words, they can form an entirely new entity and use our products and services or join our RIA and essentially become USF employees. They can continue to get all of the benefits that are applicable to their practices and still run their fee-based businesses through Schwab and Fidelity."

The firm, with offices in Houston, Chicago and Philadelphia, is basically an integrated financial services boutique and broker-dealer that provides independent advisors with innovative investment solutions, financial education and training, and other key support services. The open-architecture platform includes separately managed accounts, mutual funds, exchange-traded funds (ETFs) and alternative investments including hedge funds and private equity. And as its past acquisitions have shown, it is also willing to acquire advisory firms and perhaps emerge as one of the consolidators many observers expect to materialize in the next five years.