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Diversify adds Texas and Boston practices, crosses $14B

Two practices joined the Sandy, Utah platform with nearly $400 million in assets, lifting the firm past $14 billion without outside capital.

At a glance

  1. Live Oak Investment Partners of Austin and River Financial Group of Boston oversee nearly $400 million in client assets combined.
  2. Live Oak was founded by Mike Hostick and has operated its own RIA for the past seven years.
  3. River Financial, based in Boston, is led by founder Leo Rotman.

Diversify, an advisor-founded wealth management platform in Sandy, Utah, said two practices in Texas and Massachusetts have joined its network. Live Oak Investment Partners of Austin and River Financial Group of Boston oversee nearly $400 million in client assets combined. Their arrival lifts Diversify's total assets above $14 billion, the firm said.

Live Oak was founded by Mike Hostick and has operated its own RIA for the past seven years. Diversify said the Austin firm made the strategic decision to join the platform to leverage the scale of an institutional-quality platform and offload administrative and regulatory responsibilities. Hostick said he interviewed several firms before choosing Diversify. "I found that Diversify has one of most competitive compensation programs in the market while allowing their advisors the flexibility to run their businesses the way they want to," he said.

River Financial, based in Boston, is led by founder Leo Rotman. Rotman broke away from insurance broker-dealer New York Life to join Diversify. "I've spent more than two decades building River Financial Group to help families raising a child with a disability," Rotman said. "Growing that kind of specialized practice requires a platform built for independence. Diversify gives me the flexibility and infrastructure to launch the next stage of River's growth, while continuing to serve these families the right way."

Both practices affiliated with Diversify last month. The firm said the addition lifted total assets to more than $14 billion. It did not say which of its two platforms each practice joined.

Hostick's seven years of running his own RIA gave him a direct view of the administrative load. He said he interviewed several firms, which suggests he compared Diversify against other platforms before choosing. The decision to affiliate, rather than stay independent, is a bet that a larger platform can accelerate growth.

The no-PE pitch

Diversify was founded in 2004 by Daniel J. Luke and CEO Ryan Smith. The firm says it has eclipsed $14 billion without taking any outside institutional or private equity capital. Its website states the point in one line: "At Diversify, we reject private-equity driven shortcuts."

The firm operates through two RIA platforms. Under Diversify Wealth Management, Diversify acquires an advisor's book of business and the advisor takes equity in the firm. Under Diversify Advisory Services, advisors affiliate but retain ownership of their clients. The existence of two channels lets a practice choose how much ownership to give up. Buying a book for equity is a sale. Affiliating while keeping clients is closer to outsourcing the back office.

The release leans on the capital point. It quotes the website phrase directly, and the line now appears in the announcement of two new affiliations. That is not a footnote; it is the firm's pitch.

The two new practices are small against the platform's $14 billion base. Live Oak is a seven-year-old RIA built by Hostick in Austin. River Financial is a Boston practice built around a single specialty: financial planning for families raising children with disabilities. Rotman's quote suggests he sees the administrative overhead as a distraction from that work.

The geographic spread matters. Diversify is based in Sandy, Utah. Adding practices in Texas and Massachusetts puts the platform on the ground in two more regions, with local principals doing the client work.

Hostick and Rotman described the same bargain from different angles. Hostick pointed to compensation and flexibility. Rotman pointed to infrastructure and the ability to keep serving his niche. Both framed the decision as a way to get bigger resources without giving up control of the practice. The pattern is consistent with how Diversify describes itself: a platform for advisors who want to keep their names and their clients.

What remains open is whether the no-PE model still works as a recruiting pitch once a firm passes $14 billion. The capital structure is a claim about how the firm will behave over time. The next practices that join, and the ones after them, will test it.

Reported by the Moves desk from Financial Advisor Magazine. Published . Corrections

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