Avantax
 | |
| Company type | Public |
|---|---|
| Nasdaq: AVTA | |
| Industry | Financial services |
| Headquarters | , United States |
Area served | United States |
Key people | Chris Walters (CEO) Todd Mackay (President) Marc Mehlman (Chief Financial Officer) Tabitha Bailey (Chief Legal Officer) |
| Revenue | $666 Million |
| AUM | US$ $83 billion (2020)[1] |
Number of employees | Approx. 727 |
| Parent | Avantax |
| Website | avantax.com |
Avantax, Inc. (“Avantax”) is a leading tax-focused independent broker-dealer in the United States. In 1983, CPA Herb Vest noticed a growing need for clients to receive investment advice that aligned with their tax situations. Referring his tax clients elsewhere for financial planning meant his clients were often placed in unsuitable investments or accounts, resulting in adverse tax implications. So, Herb founded HD Vest Financial Services (“HD Vest”) to help CPAs deliver wealth management services to their tax clients. In 1992, Tony Batman founded 1st Global, Inc. and 1st Global Insurance Services, Inc. (together, “1st Global”) with a similar philosophy.
Acquiring HD Vest in 2015, 1st Global in 2019, and Honkamp Krueger Financial Services, Inc. (“HKFS”) in 2020, Avantax has grown to support a network of independent tax and non-tax professionals who provide comprehensive financial services to families, individuals, and small businesses.
Avantax has more than 3,100 professionals* managing over $83 billion in assets** under management (“AUM”) across all 50 states. Avantax is a member of the Financial Industry Regulatory Authority (“FINRA”) and the Securities Investor Protection Corporation (“SIPC”). Avantax delivers tax-intelligent financial planning and wealth management solutions for financial professionals, tax professionals, CPA firms, and their clients nationwide supporting the organizational goal of minimizing clients’ tax burdens through comprehensive tax-intelligent financial planning.
Tax Intelligence: The Evolution of Tax-Smart Financial Planning
Tax-intelligent planning signifies an elevated and all-encompassing financial strategy that transcends the foundational tax-smart approaches and ensures that clients retain a greater portion of their hard-earned income. Tax-intelligent planning embraces the understanding that every financial decision has tax implications.
Avantax defines comprehensive planning as using tax information to identify substantial opportunities and vulnerabilities to help maximize financial potential by reducing tax liability.
Business Models
Avantax has two distinct, but related, models within the business: the independent financial professional model and the referral model. They refer to the independent financial professional model as Avantax Wealth Management® and the referral model is referred to as Avantax Planning Partners℠.
Avantax Wealth Management®
Through its registered broker-dealer, registered investment advisor (“RIA”), and insurance agency subsidiaries, Avantax Wealth Management provides tax-focused wealth management solutions to financial professionals, tax professionals, CPA firms, and their clients nationwide and operates a leading U.S. tax-focused independent broker-dealer.
Avantax Wealth Management works with a nationwide network of financial professionals that operate as independent contractors. Because Avantax Wealth Management primarily recruits and serves independent tax professionals, CPA firms, and financial professionals who partner with established tax practices, most Avantax Wealth Management financial professionals have long-standing tax advisory relationships that anchor their wealth management businesses. This contrasts with traditional independent broker-dealers and investment advisers who are typically limited to providing investment advice to their clients.
Tax and accounting professionals, with their existing client relationships and in-depth knowledge of their clients’ financial situations, are well positioned to grow their wealth management practices as their tax advisory relationships provide a large base of potential clients. This competitive advantage results in an experienced and stable network of financial professionals who are uniquely positioned to provide tailored and comprehensive financial solutions that enable clients to meet their financial goals, including their tax and wealth management goals. In turn, Avantax financial professionals have multiple revenue-generating options to diversify their earnings sources.
Avantax Planning Partners℠ As a tax-focused captive RIA, Avantax Planning Partners’ financial professionals are our employees who partner with CPA firms across the country to provide tax-advantaged planning, investing, and financial solutions for their clients. Avantax Planning Partners recruits and builds relationships with CPA firms that desire to provide their clients with tax-advantaged wealth management solutions and financial plans but prefer to outsource that service to a trusted expert.
By the nature of the business, CPAs develop deep, long-lasting relationships with their clients and have insight into their tax and wealth management needs. The trust built in these long-standing relationships provides a solid foundation to recommend a client to a trusted Avantax Planning Partners in-house financial professional who can provide comprehensive wealth management services.
Holistic financial planning is the core offering of Avantax Planning Partners. In-house financial professionals provide guidance in asset management, retirement planning, advanced planning (including, among other things, business succession planning and estate planning), strategic tax and income planning, and insurance.
Avantax Wealth Management and Avantax Planning Partners primarily generate revenue through securities and insurance commissions, quarterly investment advisory fees based on advisory assets, product marketing service agreements, retirement plan servicing fees, and other agreements and fees.
History
HD Vest was founded by Herbie Darwin Vest in 1983.[2] Herb Vest, a Certified Public Accountant, had started his own public accounting firm in 1973. He started offering investment planning services and selling of securities on a commission basis in 1979. In 1983, he established the SEC-registered securities broker-dealer firm HD Vest Investment Securities, Inc. He established a network of accountant and brokers. HD Vest successfully challenged the AICPA code, which prohibited accountants from accepting commissions.[3]
In December 1986, Herb Vest established "HD Vest, Inc.", which acquired the HD Vest Investment Securities, Inc." in 1987. The company went public in July 1988. At the end of 1991, it reported a revenue of $20 million, and a profit of around $922,000. The revenues grew above $35 million in 1992, but the company lost around $3.2 million.[citation needed]
In 1992, HD Vest adopted cost-cutting measures and started focusing more on training. The company's revenues grew to $46 million in 1993, while the profit increased to $3 million. In the mid-1990s, the company's started shifting from commission-based sales to fee-based portfolio advisory services. After posting a loss in 1994, it gradually improved and reported revenues above $100 million in 1998.[3]
In 1999, Herb Vest was declared as "Entrepreneur of The Year" by Ernst & Young. In 2000, as a marketing effort, HD Vest started offering free online tax return preparation.[4] It reported that 260,000 taxpayers had filed their returns using the free service in 2000.[5] In 2000, it launched the MyHDVEST.com portal for its customers.[6] It also partnered with CompuBank and National Financial Services Corporation to offer online banking services integrated with its own services. Its revenues increased from $150.2 million in 1999 to $193.8 million in 2000.[7]
HD Vest was acquired by Wells Fargo in 2001 for $127.5 million.[8] Herb Vest stepped down as the company's top executive, and was replaced by Roger Ochs. Wells Fargo sold the HD Vest Financial Services brokerage and tax-advisory unit to the private-equity firm Parthenon Capital Partners in 2011.[9]
In August 2013, HD Vest Financial Services re-branded as HD Vest Financial Services and updated their logo and color palette. On 14 October 2015, Bellevue, WA-based company Blucora announced that it will acquire HD Vest for approximately $580 million.[10]
HD Vest was rebranded as Avantax Wealth Management in 2019.
After leaving HD Vest Financial Services, Herb Vest founded the controversial online dating service True, which was active from 2003 to 2013.
 | This article needs additional citations for verification. (June 2020) |
| Year | Event |
|---|---|
| 1983 | HD Vest was founded by Herb D. Vest, who recognized a growing need for clients to receive financial advice that aligned with their tax situation and strategies. |
| 1986 | Texas Board of Accountancy allows CPAs to receive commissions for financial services |
| 1987 | First Public Offering ($1MM) |
| 1988 | AICPA reverses policy prohibiting CPAs from receiving commissions for financial services |
| 1988 | HD Vest forms HD Vest Advisory Services, and begins offering fee-based programs. |
| 1989 | HD Vest is listed on NASDAQ |
| 1999 | Roger Ochs is named president of HD Vest |
| 2000 | HD Vest offers free online tax returns |
| 2001 | HD Vest is acquired by Wells Fargo & Company |
| 2004 | HD Vest begins offering banking solutions |
| 2008 | HD Vest offers capability to scan checks and paperwork remotely |
| 2009 | HD Vest becomes part of Wells Fargo Advisors |
| 2011 | HD Vest converts its brokerage platform to First Clearing, LLC, a brokerage clearing institution and an affiliate of Wells Fargo & Company |
| 2011 | HD Vest acquired by Parthenon Capital Partners[11] |
| 2015 | Blucora announces acquisition of HD Vest[12] |
References
- ^ [1]
- ^ "Would you buy a mutual fund from these men?". Forbes. 150 (8): 76. 1992-10-12. Retrieved 2011-02-02.[dead link]
- ^ a b Tina Grant, ed. (2002). International directory of company histories. St. James Press. ISBN 978-1-55862-464-1.
- ^ David Cay Johnston (1999-11-12). "Small Firm Offers to Process Tax Returns Free on Internet". The New York Times. Retrieved 2012-02-02.
- ^ Liz Pulliam Weston (2000-08-15). "IRS Considers Plan That Could Allow Marketing Pitches". Los Angeles Times. Retrieved 2012-02-02.
- ^ "HD Vest Launches MyHDVEST.Com". Smartpros Newsline. 2000-11-17. Archived from the original on 2002-06-12. Retrieved 2012-02-02.
- ^ "HD Vest's Revenue for Fiscal 2000 Tops $190 Million". Smartpros Newsline. 2001-10-31. Archived from the original on 2002-06-12. Retrieved 2012-02-02.
- ^ "Wells Fargo to Buy HD Vest for $127.5 Million". Los Angeles Times. 2001-03-24. Retrieved 2012-02-02.
- ^ Zachary R. Mider and Dakin Campbell (2011-06-30). "Wells Fargo Agrees to Sell HD Vest Brokerage to Parthenon". Bloomberg. Retrieved 2012-02-02.
- ^ Matthew Monks and Ed Hammond. "Blucora to Buy Brokerage HD Vest Financial for $580 Million". Bloomberg.
- ^ "H.D. Vest to be Acquired by Parthenon". accountingtoday. 30 June 2011. Retrieved 10 August 2020.
- ^ "HD Vest Announces Agreement to be Acquired by Blucora, Inc". Cision PR Newswire. 14 October 2015. Retrieved 10 August 2020.