tru IQ Prospect Profile
tru IQ - Prospect Profile
HubSpot Deal Name:
tru Experience Day Date:
Thursday, December 19, 2024
Target Launch Date:
Monday, June 30, 2025
Prospect Name(s):
| Full Name | CRD # |
|---|---|
| Fred Krokenberger | 1161243 |
| Erik Hoppin | 4337215 |
| Eric Smith | 4222373 |
| Kurt Krokenberger | 6283190 |
Location:
Naples, Florida
Existing Firm Name:
Morgan Stanley
Existing Firm Type:
Wirehouse
Protocol / Non-Protocol?
Non-Protocol
Legal Counsel Retained?
Yes
Custodian(s):
Charles Schwab
Do you need a Broker Dealer?
Yes
Total Fee-Based AUM:
$500,000,000
Total Other AUM:
$500,000
Total Annual Revenue:
$4,500,000
Total # of Accounts:
1250
Total # of Households:
350
FIRM PROFILE:
Motivation for Leaving / Potential Constraints:
Want to make a decision by mid-Jan. Timing will be determined from there.
Additional Background Information (Website, Bios):
https://advisor.morganstanley.com/the-oaktide-group
Offices in Naples, FL and Rochester, NY. Kurt is in Utah now.
$1B AUM:
- $400-500 in fee-based
- $400-500 in defined-benefit contributions plans
They met with Dynasty in late November.
** This is the prospect team that is also talking to Dan Hare about joining Elevatus. tru is working with Dan to ensure we are on same page and he is aware of our engagements. Please do NOT bring this up unless they do.
Total # of Full-Time Employees:
8
Roles and Responsibilities:
| Number (#): | |
|---|---|
| # of Owners: | 4 |
| # of Registered Advisors: | 5 |
| # of Insurance Licensed: | 4 |
| # of Administrative Staff: | 3 |
Additional details on roles of support staff:
Partners:
- Fred = rain-maker, was just convinced to make this move and is all-in (Naples, FL)
- Kurt = Fred's son, leading due diligence process, meeting competitors and custodians, decent understanding of industry (moving to Utah in Jan.)
- Erik Hoppin = ~$1m of the revenue, seems like he runs his own book (Rochester, NY)
- Eric Smith = retirement plan services guy (Naples, FL)
Other Staff Members:
- Margaret = advisor (in training program currently)
- Lisa, Jamie, Tami = CSA (Tami is part-time)
TBD if staff comes with them. Feel 4 non-producing advisors at their size is too many, which they've also been advised.
tru SERVICES:
Operations & Billing
Do you own your data?
No
Any unique reporting requirements or data needs? Report at the Household or Account Level? General questions/comments?
Report at household level. Don't lead with performance reports. More interested in the detail/data for FA use.
Erik mentioned a new MS Alts report - breakdown of Alts/Privates by sector (real estate) with underlying holdings and ROR. Max asked for a picture.
Data/Reports of interest:
- Tax summary - realized g/l last year, this year
- Income, dividends (YTD)
Asked about custom benchmarks
Additional comments on Custodian(s):
They initially met with Goldman and Schwab. Have already picked Schwab (GS was not a fit for them). They are working with Bob Holtz. GS does not know this yet.
Schwab indicated they can match or beat all of their SBL rates. Schwab has the loan lists and is working on analysis. Asked if Schwab will use this as a leverage point when negotiating transition dollars (I told him we will help negotiate).
Additional comments on BD Assets:
Want to be 100% fee-based -- but have some alts, annuities, 1035 and other legacy so may need one temporarily or will maintain for small % of assets. They are familiar with friendly-BD's in the space (assuming Dynasty pitched them on PKS).
Billing
Billing - Questions/Comments:
Want to understand how rep splits work (they have multiple), and how that ties back into accounting/P&L.
**Ran out of time so didn't ask for settings, let's ask during call (or I can after).
Compliance
What is your experience like today? Pain points?
Common wirehouse issues - want "collaboration" (these are Fred's his words).
Erik Hoppin asked this - Any instances of compliance negligence by tru in history that created SEC issues?
Lean into the benefits of CCO on ADV vs. Compliance Assist (like Dynasty)
IT & Cybersecurity
questions?
Lean into benefits of IT support "in-house"
vs. IT Support/Consultants (like Dynasty).
Accounting
Existing Legal Entity?
No
Existing Entity Tax Status?
Not applicable
Do you have any experience with bookkeeping?
Low
OTHER:
Interested in Ancillary Services during Experience Day?
Accounting
Employee Benefits
INVESTMENTS & PRODUCTS:
Lead with Financial Planning or Investments?
Financial Planning
Investment Process:
Build Own Models
How often are you trading/rebalancing/monitoring accounts?
N/A
Investment Products (check all that apply):
Unified Managed Accounts (UMAs)
Separate Accounts (SMAs)
Direct Investments (Alts, PE, VC, RE, Credit)
Lending (SBLOC)
Annuities
Insurance (Life, Disability, LT, PC)
Trust & Estate Planning
Retirement Plans (401k, 403b, DB, DC)
How many direct investment positions do you have?
$60m evergreen funds
How many accounts have a line of credit?
$10 (working with Schwab)
Additional Investment / Trading / Planning C
omments:
They use Morgan's UMA Platform =
Fee Schedule: 7 bps (up to $5m), 5 bps (up t
o $10m), 3 bps after?
Models:
- 8 ETFs
- Some SMAs due to tax transitions
- Morgan Stanley Trades, TLH, Tax Transition
(G/L mandate)
- Auto rebalancing settings, target allocati
ons (25% relative basis)
Need to discuss trading setting and details
with Advyzon to determine if Quantum and/or
Nucleus/UMA is a solution, and at what cost.
Dynasty says they will charge more bps and o
ffer less of a platform. "Not happening" pe
r Kurt. This is super important - they do N
OT want clients to pay more.
Alternatives:
- Evergreen funds, private placement, non-tr
aded, internal (BREIT, Hamilton, Neuberger)
- Schwab says they are all (or most) availab
le on Schwab platform
- Total AUM = $60m
Trust Services/Corporate Trustee: Comerica (
via MS)
Banking - Can we deposit $800 into clients a
ccount, SEC okay with it? Morgan Stanley do
es that today. Branded credit card.
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