Carson Group's strategic shift towards creating dedicated teams for its W-2 and independent RIA channels marks a significant evolution in the company's structure and approach. This move, as CEO Burt White explains, is about fostering growth and sustainability within each channel, rather than having a single team manage both. The decision comes as Carson continues to expand its presence in the RIA sector through acquisitions, often taking on firms as 1099 affiliates, allowing them to leverage Carson's platform while maintaining their independence. However, the company has also been actively integrating these firms into its own fully integrated channel, which has grown to 48 offices nationwide.
The dual-track approach, White argues, offers a balanced strategy. It allows Carson to maintain a strong foothold in both the 1099 and W-2 channels, which are seen as complementary in achieving scale and preserving entrepreneurial independence. This approach is particularly appealing to second-generation advisors who want to focus more on client relationships rather than the day-to-day operations of the business. The surge in firm valuations and higher interest rates have also made it challenging for these advisors to buy out founders through succession planning, further driving the shift towards W-2 models.
One of the key advantages of this dual model, according to White, is the ability to 'date' potential acquisitions for a period before making a full commitment. This allows Carson to better understand the firms it is considering, ensuring a more informed and strategic acquisition process. Additionally, the 1099 channel provides a steady stream of capital, enabling Carson to fund its M&A activities and technology investments without constantly taking on debt, a fate that pure W-2 integrators may eventually face.
The trend of independent advisors considering W-2 models is expected to accelerate, as noted by John Orsini, a director at M&A bank and consultancy MarshBerry. This shift is driven by the desire for greater control over the client relationship, a more consistent client experience, and operating leverage across the platform, all of which contribute to long-term enterprise value. However, Orsini also emphasizes that the 1099 model will remain a significant part of the RIA sector, serving as an effective way to attract entrepreneurial advisors and build scale.
Carson's dual-track approach is seen as a strategic evolution, allowing the company to maintain its independence while leveraging the benefits of both models. As the RIA sector continues to evolve, with a projected surge in M&A activity in 2026, Carson's strategy positions it well to adapt and thrive in a changing landscape. The company's ability to balance independence and scale, while providing support and resources to its advisors, is a key differentiator in the market, and one that White believes will continue to drive its success.
