Tuesday, July 16, 2024

Robert Russo builds investment firm by sharing revenue

Robert Russo leads a group of 170 advisers who manage $4.6 billion.

By David Dykes

Robert Russo may be the only N.C. financial adviser who can say he played college football with Peyton Manning, the University of Tennessee quarterback and NFL star. Well, sort of: Russo was a walk-on placekicker at UT who never got into a game.

But that experience forged some lessons that have enabled Russo to enter the big leagues of finance in his 12 years since moving to Charlotte. Fee and commission revenue at his Independent Advisor Alliance investment firm has doubled in size annually since 2014, totaling $54 million last year. The group’s 170 advisers in 19 states manage assets of $4.6 billion, mostly in individual accounts. The Philadelphia-area native’s first postgraduate job was in corporate sales for the Philadelphia Phillies baseball team. With his initial goal of becoming a sports agent looking like a dream, he moved to California and took an investment broker job with American Express Financial Advisors, now Ameriprise Financial Inc., in 2001. He later jumped to St. Louis-based brokerage A.G. Edwards Inc. for five years before coming to the Charlotte area to escape California’s high costs.

Russo, 42, signed up with LPL Financial, a Charlotte-based company that later moved its headquarters to Fort Mill, S.C. While many financial advisers work directly as employees for Merrill Lynch, Wells Fargo Advisors or other industry powers, LPL typically contracts with individuals who operate independently. Either way, advisers share a cut of their commissions with the parent organization.

Russo developed a version of an Office of Supervisory Jurisdiction, which takes responsibility for ensuring its affiliated advisers comply with industry and LPL rules. By offering them a significant share of revenue, Russo has attracted advisers whose cumulative assets under management make Independent Advisor Alliance one of the biggest asset managers connected with LPL, according to an LPL spokesman.

Creating a team of advisers struck Russo as a challenging opportunity compared with building his own book of business. The goal was to grow by having an experienced team that would share resources and knowledge while driving down expenses. To ease the transition for newcomers, Russo founded Blackbridge Financial to create a “walk-in ready” business providing a website, phone system and marketing plan. Most on Russo’s adviser team are veterans who prefer greater freedom than is permitted at larger investment firms.

Some recent growth stems from the addition of advisers formerly affiliated with Tampa, Fla.-based Independent Financial Partners, a registered investment adviser that is cutting ties with LPL. Some Independent Financial advisers who preferred to remain part of LPL have switched to Independent Advisors and similar companies. “We were the major benefactor,” Russo says.

IAA typically charges advisers a flat fee of $30,000, which covers oversight by the private Financial Industry Regulatory Authority and the U.S. Securities and Exchange Commission, Russo says. The InvestmentNews trade publication cited him in its “40 under 40” awards for promising industry executives in 2015. “He was definitely made to do something that’s very client-focused, customer-focused,” says Chris Zaccarelli, IAA’s chief investment officer. “He’s good to his word at all times.”

Russo is the youngest of three children whose parents are divorced. His father, owner of a material-handling company in New Jersey, emphasized the importance of initiative and not waiting for handouts. His mother, a retired school teacher, is one of IAA’s 18 employees in Charlotte, while a sister in Pennsylvania handles media inquiries. Two other employees work in Tampa and Boston. Russo and his wife, Natalia, have two young sons.

Not surprisingly, Russo uses football analogies to describe his work. For a client, “there are just so many things to think about,” he says. “It’s the adviser’s job to be the quarterback there.”

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