“We were already managing $500 million,” Gupta says. “Our clients understood the fiduciary standard, we walked them through it, and they all consolidated their accounts and started to refer their family members.”
Even with the knowledge that his clients would follow, breaking away left Gupta with additional issues, like finding technological platforms to conduct the day-to-day business of a wealth management firm.
He eventually settled on the technology of Los Altos, Calif.-based Jemstep, which melded portfolio and relationship management systems, allowing advisors paperless, automated customer account transfers and self-service processes. “What surprised me was that my technology platform improved across the board from CRM to analytics to portfolio management,” Gupta says.
Finding the right custodian was also extremely important. Gupta initially used Schwab Advisor Services and Fidelity International Wealth Services as custodians, but has since added Pershing Advisor Solutions and TD Ameritrade Institutional.
“When clients hear those names, they immediately know that their assets are very safely invested,” Gupta says.
As an independent, Gupta has continued his commitment to the fiduciary standard, creating Portfolio Checkup, a web tool that allows investors to evaluate their portfolios and determine the cost of owning their investments.
“This was really inspired by Tony,” Gupta says. “I started thinking beyond myself. Tony made me realize that I had the opportunity to go beyond my high-net-worth clients and help others realize what their investments are costing them. Our technology goes in and scans your asset allocation and analyzes all the internal fees. It won’t tell you the commissions, but it will give you the cost of owning the individual investments, and the analysis is shocking to a lot of people.”
Portfolio Checkup was developed as a partnership between Gupta’s Stronghold Financial and Jemstep. The tool charges no fees to investors and has diagnosed almost $6 billion in assets to date.
While the original plan was to use Portfolio Checkup to refer interested investors into a low-cost, low-fee robo-advisor, the plan expanded to connect clients with RIAs nationally. Gupta vetted then partnered with a handful of leading national, independent firms which are recommended by Portfolio Checkup as fee-only alternatives to users paying high brokerage fees. This network has 75 offices around the country and collectively manages more than $45 billion in assets.
“We put together a client bill of rights to talk about maximum fees and to make sure firms guaranteed the fiduciary standard,” Gupta says. “They can go through the process. They may not be right for us or might prefer a more local advisor, so users can identify the right fit and transfer their accounts to that firm if they choose.”