# $10M-$200M checks: Family Office invests in wealth management firms. Scott D. Roulston Source: https://www.youtube.com/watch?v=isR-MhryVOQ Recap page: https://rapidrecap.app/video/isR-MhryVOQ Generated: 2026-01-04T16:46:54.87+00:00 --- ## Quick Overview Scott D. Roulston transitioned from running his father's firm, which specialized in institutional investment research in the Midwest rust belt, to focusing on wealth management after regulatory changes and declining commission rates made the institutional business less competitive, eventually leading him to join the Pritsker organization in 2020 to advise on direct investments into the wealth management industry. **Key Points:** - Roulston's father required him to work elsewhere for three years after college; his first job was selling advertising for a rock and roll radio station in Detroit. - In 1990, Roulston joined Rollston and Company, which primarily offered institutional research on 220 publicly held Midwest companies, serving clients like Peter Lynch of Fidelity's Magellan Fund. - The firm shifted focus from institutional research (90% of revenue) to money management (10% of revenue) around 2000 due to falling commission rates and the rise of the internet, rebranding as Fairport Wealth Management before selling a controlling interest in 2007. - Roulston joined the Pritsker organization in 2020, which had a thesis to invest directly into the wealth management industry using long-term, multi-generational capital. - The Pritsker organization historically favors direct investing, similar to Warren Buffett's Berkshire Hathaway model, focusing on buy-and-hold private companies to achieve tax-free compounding. - The Pritsker organization invested $100 million in Steward Partners, which utilizes a unique model to recruit breakaway advisors from wirehouses using forgivable loans for their book of business, aligning interests with long-dated family office capital. - Registered Investment Advisors (RIAs) typically charge clients an Assets Under Management (AUM) fee, starting around 1% sliding downward, rather than the 2-and-20 structure common in private equity, and rarely charge carried interest. **Context:** Scott D. Roulston discusses his extensive 35-year career in wealth management, tracing his path from taking over his father's research firm, Rollston and Company, in the 1990s, through the strategic pivot to asset management, selling his subsequent firm, Fairport Wealth, and ultimately joining the Pritsker organization to lead their direct investment strategy within the wealth management sector. ## Detailed Analysis Roulston detailed his career trajectory, starting after college where he worked selling radio advertising before joining his father's firm in Cleveland in 1990; this firm was heavily focused on institutional research in the Midwest rust belt, requiring extensive physical travel to companies pre-internet, providing clients like Peter Lynch with timely, non-public information before Regulation FD was widely implemented. Recognizing industry shifts like declining commission rates and the rise of the internet, Roulston and his board decided to exit the institutional research business to focus on recurring revenue from money management, leading to the creation of Fairport Wealth Management, which was sold in 2007. After subsequent roles, Roulston joined the Pritsker organization in 2020, whose capital structure emphasizes long-term, buy-and-hold direct investing, contrasting with the defined liquidation timelines of typical private equity. The Pritsker organization identified wealth management consolidation as an attractive niche, leading to their $100 million investment in Steward Partners, which successfully recruits wirehouse advisors through a forgivable loan structure for their book of business, creating strong alignment among investors and employees. Roulston clarified that RIAs primarily charge AUM fees (starting around 1% sliding down) and rarely use the 2-and-20 carried interest model common in PE, noting that high-net-worth clients are increasingly moving toward retainer fee structures that account for complex services beyond investment management, such as tax assistance and bill pay. ### Career Progression - Started at Rollston and Company in 1990 focusing on institutional research in the Midwest rust belt using corporate aircraft pre-internet - Shifted focus to recurring revenue wealth management around 2000, rebranding as Fairport Wealth Management, sold in 2007 - Joined Pritsker organization in 2020 to direct investment thesis in wealth management firms. ### Pritsker Investment Philosophy - Utilizes long-term, multi-generational capital for direct investing, favoring buy-and-hold strategies like Warren Buffett to maximize tax-free compounding - Invests across various industries but targeted wealth management due to industry consolidation potential. ### RIA vs. Broker Dealer Models - Broker dealers operated on transaction commissions with a 'buyer beware' dynamic - RIAs require licensing and operate under a fiduciary duty, charging AUM fees and incentivizing asset appreciation over trading volume. ### Wealth Management Firm Valuation - Fairport sold at 8 to 9 times profitability in 2007; current multiples range from 1-2x revenue/profitability up to 15+ times for firms with strong organic growth and scale. ### Fee Structures - RIAs typically charge 1% of AUM sliding down, rarely using carried interest; ultra-high-net-worth clients are pushing for retainer fees to cover comprehensive services beyond investment management. ### Steward Partners Deal - Pritsker invested $100M alongside another family office (Sinershare) in Steward Partners, attracted by its unique model of buying advisor books of business via forgivable loans to breakaway wirehouse advisors. ### Organic Growth Tactics - Firms grow via advertising (one Chicago UHNW office spends $15-20M annually on LinkedIn), referrals, and expanding service models to include tax and bill pay, as average industry organic growth is only 3-4%.