NewEdge Advisors, the New Orleans-based RIA partnership platform owned by NewEdge Capital Group, has been seeding its W-2 employee advisor channel this year with plans to launch it more directly into the market in 2026.
The move comes as NewEdge Advisors has seen interest from 1099 independent contractor advisors facing high valuations, both for recruiting or acquiring other RIAs, and for young advisors to buy equity stakes, said co-CEO Alex Goss.
“Over the last four years, we really started to see some demand from our larger, faster growing teams to say, ‘we’re interested in this institutional capital world that’s becoming a bigger component of our world in general for two reasons: liquidity, and then also their own interest in doing M&A and expanding their own growth inorganically,” Goss said.
Goss said NewEdge has built its W-2 channel to 14 firms and roughly $14 billion in client assets, and counting. The advisors there adopt the New Edge name but can also maintain relevant sub-branding for their local market. They also come onto the RIA’s technology platform, which Goss said has been honed to provide quality, along with the flexibility that firms may have been used to as 1099 platform RIAs.
“I think what’s interesting for us is that these are still very young, long career-minded advisors,” he said. “There are some multi-generational reasons behind it, but it’s been more about helping them continue to expand and grow.”
The move marks a shift for NewEdge, whose origins were in a 1099-independent platform that it had built steadily over the years under its parent firm, NewEdge Capital Group, to $24.7 billion in AUM as of its most recent Form ADV. NewEdge Capital Group also includes NewEdge Wealth, which is predominantly focused on UHNW families; in total, NewEdge Capital has about $65 billion in assets across its subsidiaries.
NewEdge Advisors has had a strong recruiting year, including some wirehouse breakaway teams, which Goss said has resulted in recruited assets of close to $20 billion. Many of those firms will remain on that 1099 platform, Goss said. But NewEdge will make the W-2 channel available to them, along with external advisors looking to make a move.
Other large RIAs have also been making efforts to expand their W-2 channels and make them more attractive to both internal and external advisors.
Signature Estate & Investment Advisors told WealthManagement.com earlier this year it had shifted 10 of its 1099-affiliated advisor groups into its W-2 model over the past year, and firms like Mariner and Carson Group announced similar moves, which the firms have said is likely to be a continuing trend. Hightower, one of the original and largest RIA aggregators, has also launched its Hightower Signature Wealth-branded RIA channel, which CEO Larry Restieri aims to ramp up quickly.
NewEdge Advisors will be making the case to advisors more publicly that, in the new channel, they can get help funding “tuck-in acquisitions” to grow their practices in an RIA market where, if operating as a 1099, the deals may be too highly priced.
“We’re buying a $500 billion team, and partnering with them,” he said. “Then they’re going out and buying a $50 to $150 million practice to roll into them.”
He contrasts that approach with what some other aggregators are doing in the market through succession-driven deals. He has concerns that, when founders retire shortly after an acquisition, the setup may not result in a good outcome for either the clients or the G2 advisors, especially if they did not receive a substantial paycheck in the deal and decide to leave.
“Candidly, I think you’re starting to see some cracks in the business plans of those other competitors that said, ‘Oh, we’ll just buy these retiring books and then we’ll find new people in our corporate centralised services to manage them,” he said. “I think you’re starting to see the organic growth die in those channels, and the long-term retention of the clients is suspect.”
In January, Goss said NewEdge will have teams presenting the case for its W-2 model to both in-house advisor teams and externally, using seed firms to provide case studies.
“That was our goal,” Goss said. “To kind of do this under the radar until we’re really ready for primetime, which we feel we are now.”
