Adjusted for Risk: Pete McGratty on the Zephyr Podcast

Three Phases of an Evolving Industry

Pete McGratty is the Executive Director of RIA Development at Verdence. He joined Zephyr’s Adjusted for Risk podcast to trace the independent RIA evolution across three phases. In the first phase, broker-driven models shaped advice around product sales. In the second, advisors left the wirehouse world to operate under a fiduciary standard with fewer clients and deeper relationships. The third phase is unfolding now. Large PE-backed consolidators are building scale inside the independent channel. In doing so, some are recreating the dynamics that originally drove the breakaway movement.

The Four-Legged Stool

McGratty offers a practical framework for evaluating any firm’s actual values. Four commitments define a genuine independent practice. First, fiduciary alignment: advice given in the client’s interest, free from conflicts. Second, proactive client relationships: a ratio low enough that advisors know each client’s situation in depth, not just when a call comes in. Third, robust financial planning: an ongoing plan updated across the full life cycle of the relationship, not a one-time document used to win business. Fourth, strong investment management: a disciplined, well-resourced approach to portfolio construction and due diligence.

As consolidators expand, those four commitments do not always hold equally. Advisor-to-client ratios climb. Product menus grow in ways that introduce new conflicts. Resources shift from client service toward sales and marketing as firms prepare for their next transaction or a public offering.

How Smaller Firms Can Compete

The independent RIA evolution does not require smaller firms to consolidate. McGratty outlines several practical paths forward. Shared scale through outsourcing gives smaller practices access to institutional investment capabilities, planning, operations, and private markets for RIAs without building those functions in-house. Community and succession solutions let advisors collaborate and protect clients without selling to a consolidator. The Verdence/RIA+ platform addresses three specific segments: younger advisors who need continuity plans, advisors approaching retirement who need succession structures, and emerging advisors who need a competitive offering to match larger firms in front of prospective clients.

Private Markets for RIAs: Opportunity and Real Risk

Client interest in private markets is growing. Companies are staying private longer. Public market return opportunities are becoming more concentrated. McGratty and host Ryan Nauman give substantial attention to this shift, with private credit as a central focus. McGratty is direct about what responsible adoption requires. Client fit matters. Education on how these strategies work matters. Due diligence on managers and structures falls on the advisor. It cannot be delegated.

Interval funds receive specific attention in the conversation. Redemptions in these structures are typically capped at roughly 5% of fund assets per quarter. In a stressed market, that constraint can leave clients waiting far longer than expected to access capital. Advisors considering these structures need to communicate those terms clearly. They also need to confirm the client’s broader financial plan can accommodate the constraint.

About Verdence and Verdence/RIA+

Verdence Capital Advisors is an independent RIA based in Hunt Valley, Maryland, with offices along the East Coast. The firm manages approximately $5 billion in assets across four practice areas: traditional wealth management, a sports and entertainment group, an ultra-high-net-worth family office practice, and Verdence/RIA+. Verdence built the RIA+ platform to support its own advisors first. Today, it is available to independent firms nationwide. For advisors evaluating private markets for RIAs and looking for outsourced scale without consolidation, Verdence/RIA+ addresses both needs directly.