Why Your Independence is Not for Sale and Why Cambridge is Not for Sale

Cambridge’s Plan for Independence and Private Control


Eric Schwartz, Executive Chairman and
Amy Webber, President and Chief Executive Officer

Download the PDF

 

At Cambridge, our primary focus is you, the independent advisor, and your clients. We believe preserving our commitment to you must start with the stability of management and private control within Cambridge. We’ve spent over 20 years establishing a flexible business model, a committed senior leadership team, a legal structure, and a formal succession plan; all in order to stay focused on you and remain true to our core values.

Maintaining the character and superior quality of Cambridge is the foundation that will sustain independence and private control for multiple generations. Years ago we realized that to inspire urgency for advisors to formalize business continuity and succession plans, we had to lead by example and embrace planning as a financial solutions firm with the same enthusiasm. At Cambridge, we are focused on the financial professional with an independent mindset and dedication to best serving the needs of their investing clients.

Cambridge’s plan for independence and maintaining control of our destiny is primarily based on:

 

Leadership committed to culture and value
Cambridge was founded by Eric more than 35 years ago.1 Over the last 15 years, Eric and Amy have developed Cambridge’s senior leadership team which reflects a culture and passion for independence. Together, we serve our advisors and their clients with an unwavering dedication to our firm’s values of integrity, commitment, flexibility, and kindness. At Cambridge, culture counts, and values matter most.

Financial strength through profitable growth and service excellence
As Cambridge moves into its third decade of financial strength and profitable growth, our commitment to our advisors is clear with our achievement of an average of 9 out of 10 overall satisfaction rating from our advisors for 20 years. In addition to service excellence, Cambridge has been recognized 11 times as the Broker-Dealer of the Year.2 Strategic, disciplined management of our financial stability and future translates into freedom of choice as well as quality of service and expertise for your business and ours.

Stock ownership by senior leadership, and an employee stock ownership plan (ESOP) 
While it may be appealing for founders of some companies to cash out as they get older, this is not part of our succession plan or of interest to Eric, Amy, or the senior leadership team. We have spent over 20 years perfecting the succession plan now in place, which includes indirect ownership by associates through the ESOP, plus direct ownership by management.

"Private ownership allows us to be on the same side of the table with financial professionals and together we are independent business owners managing our future success." 
Eric Schwartz
 

The Main Pillars of Cambridge’s Succession Plan

Beginning in 2017, Cambridge offered a major expansion of our associate benefits with the Cambridge Employee Stock Ownership Plan (ESOP) to eligible associates. The Cambridge ESOP is intended to provide a means whereby eligible associates receive an account with equity interest in Cambridge with a focus on accumulating assets for retirement savings.

The Cambridge ESOP and Management Ownership

The Cambridge ESOP is another step in controlling our own destiny by remaining privately controlled based on associate and management ownership – which includes hundreds of associates as indirect owners, along with management and advisors who are direct owners. A bonus program is in place that aligns with company, department, team, and individual performance on an annual basis, along with a 401(k) matching program for associates.

The Cambridge Foundation

Eric has also formed and funded family foundations, as well as The Cambridge Foundation, which is focused on community giving at the local level. Various trusts are in place and controlled by Eric, along with Amy, and other senior executives to serve as a plan if he were to pass unexpectedly. This structure is designed to ensure that ownership of the company will remain with Cambridge associates and management. Eric continues as executive chairman with Amy as president and CEO, along with a deep, experienced senior executive bench.

Cambridge Succession Solutions for Independent Financial Advisors

At its core, succession planning creates a foundation for relationship building, inspiring action, and creating solutions. Cambridge’s continual drive for innovative solutions and preserving private control means our efforts are at the forefront of tackling the challenges of succession planning. We strive to proactively transform services and business processes with a visionary view on practical solutions to help independent financial advisors define and execute succession plans.

At Cambridge, we have our succession plan firmly in place, and we stand ready to assist you with your independent journey and succession plan. For expert guidance, contact Cambridge’s Succession and Acquisition Solutions Team, at successionsolutions@cir2.com.

State of the Industry: Two-thirds3 of Advisors Currently have in Place, or are Planning to Create, a Succession Plan

Currently, eighty percent of advisors across the industry believe their firm will be more valuable in five years, and approximately two-thirds of advisors currently have a succession plan in place or are planning to create a plan.

Despite a positive outlook on the future of succession planning, many advisors cite the most challenging aspects of future planning include:

  • Transferability of clients and/or assets under advisement
  • Lack of internal and external candidates
  • Owner unwilling to exit from firm
  • Lack of time and resources to develop a succession plan
“Reputation, culture, and private control are the top reasons advisors cite in choosing Cambridge, and we strive to show our appreciation of this choice through service excellence and sincere partnership.”
Amy Webber
President and Chief Executive Officer

Cambridge Executive Council

Rick Boyles, Executive Vice President, Human Resources and Chief Financial Officer

Colleen Bell, Executive Vice President, Operations and Chief Fiduciary Service Officer

Jeff Vivacqua, Executive Vice President and Chief Marketing Officer

Eric Schwartz, Executive Chairman

Amy Webber, President and Chief Executive Officer

Dan Sullivan, Executive Vice President, Corporate Strategy

Seth Miller, Executive Vice President, General Counsel, and Chief Risk Officer Kyle

Selberg, Executive Vice President and Chief Business Development Officer Nick

Graham, Senior Vice President and Chief Technology Officer

About Cambridge

Cambridge Investment Group, Inc. is a privately-controlled financial solutions firm focused on serving independent financial advisors and their investing clients. Cambridge offers a broad range of choices regarding advisor-focused financial solutions: advice solutions, technology solutions, platform choice and business structure solutions, consulting solutions, and outsourcing solutions. Cambridge’s national reach includes: Cambridge Investment Research Advisors, Inc. – a large corporate RIA; and Cambridge Investment Research, Inc. – an independent broker-dealer, member FINRA/SIPC, that is among the largest privately-controlled independent broker-dealers in the country.

Are you Independent?

Our culture of true independence means you, the financial professional, control the journey. Your long-term success is defined by the value you deliver to your clients, and your enduring success is often driven by your business efforts being a clear reflection of your personal values.

Talk to a Business Development Director

1 See Ten Factors Often Overlooked in Selecting a Broker-dealer – A Due Diligence Thought Paper, by Kyle Selberg

2 The Fee experts® is a registered mark of Cambridge Investment Research, Inc. for its investment advisory service for investment managers.

3 REP. magazine, 2013, ranked No. 1, with an overall score of 9.6 out of 10. Between November 14, 2012 and January 6, 2013, Penton Research and REP. invited independent broker-dealer advisors to participate in its Broker Report Card Survey that measured satisfaction with their firm in seven different categories from compliance to product offerings. Firms were scored on a scale of 1-10, with 10 being the best. Penton received 2,992 surveys. Of those, 2,873 respondents had worked in the industry for the required one year or longer. In order to be reported, at least 50 respondents from each brokerage firm was required. Twenty-two firms met this requirement in 2013.

The information discussed herein is general in nature and provided for informational purposes only. There is no guarantee as to its accuracy or completeness. Nothing in this white paper constitutes an offer to sell or a solicitation of any offer to buy any type of securities. Reprinted by permission for use by Cambridge. All rights reserved.

Securities offered through Cambridge Investment Research, Inc., a broker-dealer, member FINRA/SIPC, and investment advisory services offered through Cambridge Investment Research Advisors, Inc., a Registered Investment Adviser. Both are wholly-owned subsidiaries of Cambridge Investment Group, Inc. For financial professional use only V.CIR.0616