After the economic downturn slowed the growth rates at Tom Ruggie’s practice, the 41-year-old advisor found himself contemplating the idea that he, too, would slow down.

A stockbroker’s dream of days on the golf course financed by steady clients was an option within his grasp.

“A lot of advisors get complacent and content,” says the principal of Ruggie Wealth Management, an LPL Financial-affiliated practice in Tavares, Fla.. “Their goal is to work less hours and increase the quality of their lives outside the practice.

I said: I do not want to get more complacent.”

After that realization hit, Ruggie began a journey last year that landed him in an odd spot.

He has significant allegiances to both LPL and Raymond James Financial Inc. — the Hatfields and the McCoys of the independent brokerage realm.

Ruggie believes he may be the first broker ever to assume this bifurcated stance.

Under a deal he struck this year, LPL gets to keep much of the $220 million that Ruggie currently advises. Raymond James gets all the assets of high net worth clients that Ruggie hopes to attract through his new RIA, RWE Private Wealth in Orlando, Fla.

No complaints

This arrangement works for Raymond James.

“Us getting the high net worth business was great,” says Mike Di Girolamo, who oversees the RIA custody business at Raymond James. “That’s an ideal situation.”

LPL also finds much to like about its own situation.

“We’re pleased to serve as the primary custodian for Ruggie Wealth Management,” says Joseph Kuo, a New York-based spokesman for LPL.

Ruggie sought a more ideal business model after seeing his revenues trimmed during the economic downturn. For 10 years his practice had grown an average of about 30% annually, but last year it stagnated in the market downturn.

“I said: I’ve done all I can do to hold hands and cut expenses,” he says. “What can I do to bring in more revenues?”

After studying his options, he saw an opportunity in the high net worth market for people with $5 million to $50 million of assets under management. He thought he could offer that strata of clients services that are generally only available to clients with more than $50 million of assets under management.

Personal need

Going to a high net worth practice served a personal need, too.

“Clients on the high net worth side are more work, but I’m driven by working with them,” he says. “They’re entrepreneurs, and I consider myself an entrepreneur. I like working with someone like that. It’s what excites me.”

To attract those clients, Ruggie decided he’d need to provide a more comprehensive wealth management practice. He would need to form an RIA and develop more services and expertise.

Last year, Ruggie went down the road of starting a new RIA with Schwab Advisor Services. But just as he was set to launch last fall, the market crashed. “The timing was abysmal,” he says.

After shelving his dream of creating a practice aimed at fellow entrepreneurs, he entered into serious discussions with Seth Ellis, a successful entrepreneur and a lawyer.

The vision of Ellis, a customer of Ruggie’s since 1995, was to start a wealth management practice to address the market of plaintiffs who have won large lawsuits.

As an attorney, he’d learned that lawsuit winners are as likely to hold on to their awards as lottery winners, and the consequences can be even more troubling. “If we lose our jobs, we start over again tomorrow,” he says. “These victims have only one bite at the apple.”

Ellis, who made much of his fortune by turning around a night goggles company and a hospital, also wants to serve owners of large private companies who can use high-level managerial counsel mixed in with their personal financial advice. He also introduced Ruggie to a third principal, Alan Weinstein, a former Ernst & Young partner to advise on sophisticated tax and trust issues..

Distinct advantages

The new practice has distinct advantages over the old one.

“I was a strong generalist,” Ruggie says. “Now we have strong experts.”

But gaining Ellis and Weinstein as partners meant sacrificing his relationship with LPL for the new venture.

Ruggie’s new partners preferred the idea of working with St. Petersburg, Fla.-based Raymond James. Ellis had prior dealings with top management at the broker-dealer, and he liked its proximity.

“Alan and I really pushed Tom into doing Raymond James” because it is close by in St. Petersburg, Fla.,” Ellis says. “I’m not going to fly to San Diego for LPL or to wherever Schwab is based.”

Charles Schwab & Co. is based in San Francisco.

Geography aside, Di Girolamo believes that the RWE partners chose Raymond James for more than convenience and control. [See Raymond James shows its serious about winning bigger RIAs]

“[Wealth management] is a niche we probably cater to better than most other custodians,” he says. “LPL’s very new to the [RIA custody] business.”

LPL is also strong in attracting RIAs who serve high net worth individuals, according to Kuo.

Continued strong relationship

“Our continued strong relationship with Tom Ruggie combined with the significant overall growth our hybrid RIA platform has enjoyed since its inception one year ago clearly reflect our ability to attract and retain RIAs serving the high net worth segment of the market,” he says.

In the discussions that Di Girolamo had with Ellis and Ruggie, he says that he was able to impress on them that Raymond James’ investment bank could help them with first rate municipal bond underwriting and securities research.

“Those were big deals; we spent a lot of time on that,” Di Girolamo says. “Technology was also a big issue for them with performance reporting, a contact system and financial planning all integrated into one system.”

Ruggie agrees with Di Girolamo – to a point.

“Everything Mike said is true [about the technology, research and municipal bond underwriting] but I wouldn’t say it’s [overall] better or more than LPL. It’s different and because it’s different, it’s beneficial.”

Though services at LPL and Raymond James may vary some, the bigger challenge has been adjusting to a new culture, Ruggie says.

An adjustment

“It’s been an adjustment,” he says. “It isn’t the same and it isn’t what you’re used to. Some things I’ve been pleased with and some things I’ve been disappointed with but both [Raymond James and LPL] are bending over backward to [help] and keep the business.”

In addition to adding his new high net worth clients under the RWE banner, Ruggie will give his existing clients who fall into that category the option of joining RWE. And some of his LPL clients who hold assets with other advisory firms may consolidate assets to him under the RWE banner, he adds.

But there’s a good reason why Ruggie never moved the $220 million away from LPL.

“I had nothing pushing me away from LPL,” he says.

What is pushing Ruggie toward his dream is a desire to succeed in business – even if it goes against the Floridian grain.

“I don’t play golf, because I work too much,” he says.

Though Ruggie is not a golfer, he holds season’s tickets to the Orlando Magic and it comes with a golfing perk. Not only does the team vie for championships, but Ruggie’s floor-level seats include access to a special concession stand. One fellow fan who uses that stand is named Tiger Woods.