Janney CEO touts benefits of private equity owner KKR

Like other executives sitting atop large wealth management firms, Tony Miller of Janney Montgomery Scott sees recruiting opportunities amid recent stock market ups and downs.

“I think, just anecdotally, we have seen about a 60% increase year over year in the dialogues that we’re having, in the advisors that we’re speaking with,” Miller said in an interview this week.

Janney, which promoted Miller to its CEO spot in January, is looking to attract advisors spurred by recent economic turmoil into looking for a new home. Other wealth management firms see the same opportunity.

In an earnings call last month, Stifel CEO Ron Kruszewski said he thinks the past two years’ bull markets gave many advisors reason to stay put rather than move to another firm. As long as advisors’ annual revenue production was steadily increasing along with the assets they had under management, then the amounts they could hope to fetch from recruiting deals could also be expected to rise. (Recruiting firms often pay incoming advisors a multiple of the total revenue they had generated over the previous year.)

Now, with the chances of a market downturn running high for the first time in years, advisors are faced with the prospect of seeing their recruitment deals shrink the longer they wait to move. Miller said it’s been a fertile time for recruiting at Janney.

“Since October, we’ve brought in nearly $3.5 billion in net new assets,” Miller said. “We have another $2.5 billion in assets committed to joining us in the next couple months. I think that’s an affirmation that the market appreciates and understands that we have something special here.”

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Miller said Janney — a regional firm with roughly 900 advisors and $15.3 billion in AUM — is becoming one of the few firms in the industry that can still provide advisors with a sense of being at a smaller firm while still offering the full gamut of services expected from a large wealth manager. Advisors who want that particular combination of attributes are seeing their options limited by frequent merger and acquisition deals — witness LPL Financial’s plan to acquire its much smaller rival Commonwealth Financial Network later this year.

Miller said Janney’s distinct position in the industry is in no small part due to its financial backing from the private equity giant KKR. KKR announced in July 2024 that it was buying Janney from its former owner, Penn Mutual Life Insurance, for an undisclosed amount.

In an interview with Financial Planning, Miller discussed the benefits of private ownership, possible misconceptions about private equity, and Janney’s continuing appeal to advisors. 

This interview has been edited for clarity and brevity.

Financial Planning: What has KKR brought to Janney that perhaps wasn’t there before? Where do you see the partnership going?

Tony Miller: KKR has been a tremendous strategic partner that has invested in Janney’s long-term vision and the business plan that we had already put in place. They came in and underwrote Janney’s long-term strategic plan to help support our growth and continue to reinforce what makes us special. 

To touch on that a bit, we believe that we’re the premier destination for financial advisors in our industry that are seeking that perfect balance between a smaller boutique culture, where advisors have autonomy and the firm stands behind them with highly personalized service solutions and open access to leadership. But then we have the capital and resources of a very large firm to provide both financial stability and the ability to continuously invest in growth and support and in a highly competitive advisor platform.

FP: What specific parts of your strategic plan is KKR helping to further?

TM: First and foremost, our plan is rooted in ensuring that we maintain the culture that we’ve built over the years. It’s one that has attracted a great deal of talented advisors to the platform. 

But the plan is also to have an underpinning growth. We get the majority of our growth from organic growth. We’re always seeking top talent, but we spend the majority of our time focused on our current advisors and how we can help them. We are very specifically invested in supporting advisors around practice management, teaming and succession support, advisory and financial planning, broad technology tools and the client experience. 

And KKR has been able to help us not just by providing a great deal of capital to fuel our growth but also the ability to tap their expertise in these various areas. We’re always looking at bringing high-quality advisors to the team that we’d all be proud to call colleagues. And with that capital from KKR, we have a very competitive recruiting package. 

FP: You talked about Janney staking a middle ground between really large firms and small operations that perhaps lack the resources needed to support advisors in all the ways they might want. Do you think industry consolidation will make your place in the industry even more distinct in coming years?

TM: I absolutely do. I think there’s been a sort of a diversion of business models in the industry. You have very large, multi-business-line firms on one end of the curve. And then you have very small RIA or independent firms on the other. 

Where I think there is a growing void is exactly where we intend to compete. And that’s in this middle space where people want independence and the collegial and entrepreneurial culture that comes with a smaller firm, but they don’t want to sacrifice the resources to invest in the platform.

I believe we operate in a diminishing space, in that middle ground, and that gives us a great deal of competitive advantage. 

FP: Private equity owners have their detractors in the wealth management industry. What are the critics missing?

TM: I don’t think it is fair to say that all private equity firms are created equal. One of the benefits of our partnership with KKR is how they view ownership, and they believe that firms are  better positioned for success when everyone in the firm has ownership. 

FP: You’re providing ownership stakes to everyone in the firm now, evenly newly recruited advisors. Is that one of the innovations that’s happened since KKR came along?

TM:  I characterize it as saying that one of the most important tenets to the ownership plan is that it’s not isolated to a few groups. Everyone in the firm has a component of ownership. 

And, as you would imagine, most of that is in the hands of our advisors, where it rightfully belongs. And an important distinction is that all of the ownership, including KKR, is in the same class structure. So everybody’s on the same side of the table, working together. 

FP: Another common knock on private equity owners is that they are in the business of “flipping” companies — or selling them after a few years to generate short-term profits. Do you think Janney will most likely be sold again at some point in the not too distant future?

TM: That’s a natural question. I think any sort of exit is a long way off.

Our common goal with KKR is to make Janney a better version of itself by executing on that strategy we discussed earlier. We’re not looking to change who we are. 

When the time comes to find a new business partner and investor, we will align with another like-minded business to ensure that we can continue that long track record of success. We’re nearly a 200-year-old firm and intend on continuing forward as a private company.

FP: You also mentioned putting KKR’s capital to use with reinvestments in the firm. Can you give any specifics?

TM: One continued investment we’ve made is in advisor transitions. Over the last few years, we have built a proprietary, completely digital, advisor-transition process that I would say rivals any transition experience in the industry. It was really thought through with: What is the client experience like in this effort? And how do we get clients and those advisors back working together as soon as possible? 

Our advisors that have transitioned over the past year have averaged moving over 75% of their clients in less than 30 days, which is very fast. And we just had a new record with someone transferring 75% of their business in just 10 days.

We’re also investing in organic growth. There’s a high focus on enhancing our financial planning tools, on tax overlay strategies and the client experience around our website and mobile. It’s all around many of the things our advisors have asked us to work on.