Episode summary
RIA Edge Podcast: Behind the Largest Wirehouse Breakaway with OpenArc’s Jim Kaufman
Summary
OpenArc’s move out of Merrill Lynch was driven, Jim Kaufman said, by a long-running belief that the team could no longer keep a true client-first culture inside a company-first environment. The transition followed roughly 24 months of due diligence and years of frustration with the limits of the wirehouse model, and it brought roughly 130 associates and close to 70 advisors into the new firm.
Kaufman said the scale of the breakaway worked because OpenArc was already run like a business inside a business, with a flat leadership structure and a shared culture built over 20 years. He said the team also leaned heavily on Dynasty and Schwab to handle the operational lift of independence, from offices and middleware to technology and procurement.
On the new platform, Kaufman argued that independence has expanded the advice OpenArc can offer, especially in estate planning, tax planning, long-short strategies, and financial wellness for corporate clients. He said the firm is using AI-enabled tools to draft wills and revocable trusts, is bringing tax preparation and filing in-house, and sees organic recruiting and selective acquisitions as the next stages of growth.
Key takeaways
- Jim Kaufman said OpenArc spent about 24 months on due diligence before deciding independence was the best path for clients and teammates.
- He said the firm moved roughly 130 associates and close to 70 advisors, making it the largest wirehouse-to-independent breakaway yet.
- Kaufman said the biggest change is product and planning freedom: OpenArc can now offer long-short strategies, tax mitigation, estate planning and tax prep.
- He said OpenArc’s advisor pipeline starts with college recruiting and a formal two-year training program built for equity compensation and corporate benefits.
- Kaufman expects growth to come from both organic hiring and targeted acquisitions around pockets of client concentration.
- He said the trend toward independence is accelerating and that the OpenArc move proves large teams can make the transition.
Notable quotes
“we had a lot of other demands on us and we really determined that we were in a company first environment”
“We brought over about 130 associates close to 70 advisors”
“I think the trend to independence is real. I think it's going to continue to accelerate”
“the solution set for clients certainly has opened up and as an example long short strategies tax mitigation strategies we had no access to that in our old lives”
“we are going to hit a spot here in the intermediate term say call it a year or 18 months where we go from transitioning a business”
How the episode opens
A t-shirt and jeans, mac and cheese, oceans and sunsets. Some things in life are an obvious match, like RAS and Schwab advisor services, the number one choice for independent adviserss looking for a custodian who can help them go further. With all the well services, technology, and support an REA firm needs, the difference is so obvious.
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To learn more about everything Schwab can do for you. Visit advisor serviceservices.wab.com. Hi everyone and welcome to the RA Edge podcast.
My chance to speak to executives building the wealth management firms of the future, meaning client centric fiduciary first. Today I'm thrilled to be joined by Jim Calfman who is the managing partner and senior wealth management adviser at Open Arc Corporate Advisory which I think as most of you listening to this podcast will know I was the largest warehouse breakaway ever and his team managing around I think $129 billion at Miral Lynch in both institutional and wealth advisory. I left that firm to start their own business at Open Arc.
The breakaway broker story obviously is a common one. Over the past 10 plus years, we've written about it frequently, but never at this scale, never with this complexity, and certainly never on the institutional side of the business have we seen such a move.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- wirehouse breakaways
- ria independence
- estate and tax planning
- advisor recruitment and training
- ai adoption in wealth management
Companies and tickers mentioned
- BAC
- OpenArc Corporate Advisory
- Merrill Lynch Wealth Management
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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