Lido Advisors, the Los Angeles-based registered investment advisor with more than $42.5 billion in client assets, has added its own broker/dealer to make the option available to existing and future advisors on its platform, according to a regulatory filing and firm executives.
Lido, an otherwise fee-only advisory, added the in-house broker/dealer in March, according to a regulatory filing.
President Ken Stern said Lido remains focused on being a fee-only RIA, but that as the firm seeks to draw top talent across the advisor space, it became necessary to add a broker/dealer option.
“We want the best of the best,” Stern said. “The best of the best is going to come from everywhere—banks, wirehouses, other RIAs. We’re unapologetic about finding the best that’s going to represent our clients, and many of those have broker/dealer affiliations.”
Stern gave the example of an advisor joining from an independent b/d who has clients with a variable annuity. Without a b/d, the firm wouldn’t be able to advise on those assets, which he said would be a “misalignment” as advisors need to be able to be a fiduciary on “the entirety of the client’s portfolio.”
“We’re not going to be a retail broker/dealer,” Stern said. “However, there are certain situations that we don’t want to be in gray areas with the regulators when it comes to how we approach all of our investment mandates and what we’re doing, and so it’s just a cleaner way to do it.”
Lido has been adding advisors and assets at a rapid pace since it sold a stake to private equity firm Charlesbank Capital Partners. Last May, it sold a stake to BlackRock’s HPS, with Charlesbank shedding some of its ownership while retaining a position in the firm. Lido also has a non-controlling minority investment from Constellation Wealth Capital as of 2024.
The RIA also has 250 co-owners from its employee base, with plans to expand that number further this year, said CEO and co-founder Jason Ozur.
Ozur said in the capital transaction last year, 74 of those owners “became millionaires.”
“That’s one of the things I’m most proud of,” Ozur said. “It’s not about one person, but about the team, and we want the number of co-owners in this company to go up every single year.”
He added that there are shares for advisors to buy into ownership, as well as management incentive shares given to employees.
Stern and Ozur stressed Lido’s single-brand, full-service model across investing, taxes, and estate planning, with three channels to serve individuals, more complex high-net-worth clients, and up to family office services.
Ozur added that Lido’s in-house investment approach, particularly its use of proprietary alternatives, is an advantage in keeping client fees down.
“We will continue to avoid a double-fee—so the Lido fee and then an external fee,” he said. “We believe fees are the enemy of performance … if we’re charging 80 [basis points] and someone else is charging 80 bps, we’re probably 20 to 30 basis points cheaper because we’re able to do a lot of it in-house.”
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