Solo RIAs Consider Joining 1099 Platforms as SEC Cybersecurity Audits Expand

Wealthcare and Mariner executives said advisors managing $250 million are spending six weeks on SEC audit responses, driving interest in supported-independence models that charge 10% to 20% of revenue.

By the Family Office Real Estate Daily Desk·Thursday, October 22, 2026·2 min read

Editorial summary of reporting byWealthManagement.com Our editorial standards →

The answer · checked against WealthManagement.com

Why are solo RIAs giving up their own Form ADV to join 1099 platforms, and what does it cost them?

Wealthcare Capital Management president Matt Regan and Mariner Independent head Rob Sandrew told advisors at RIA Edge Orange County that SEC cybersecurity audits are pushing solo RIAs toward 1099 platforms. Regan said a $250 million advisor can lose six weeks responding to a 104-question SEC cybersecurity audit. Supported-independence channels typically charge 10% to 20% of revenue, according to a study by consultancy Winthrop & Co.

Key facts

Matt Regan, president of Wealthcare Capital Management, said a Wealthcare ADV faced a 104-question SEC audit focused entirely on cybersecurity.
Regan said a $250 million advisor is 'dead in the water for six weeks' trying to respond to an SEC cybersecurity audit of that scope.
A study by consultancy Winthrop & Co. found that supported-independence channels charge advisors 10% to 20% of revenue in exchange for back-office offloading and access to scaled resources and technology.
Rob Sandrew, head of Mariner Independent, said he expects 'a massive consolidation and massive chasm between the haves and have-nots' in the next three to five years driven by AI advancements.
Wealthcare Capital Management is owned by insurance holding company Sammons Financial Group and operates both a 1099 aggregator platform and a W-2 employee platform.
Nate Angelo, CEO of Composition Wealth, described recruiting of mature advisors with strong books of business as a 'war on talent' and said Composition Wealth's growth path runs through investing, not cutting costs.

Solo RIAs Consider Joining 1099 Platforms as SEC Cybersecurity Audits Expand — Image: editorial illustration · Story sourced from WealthManagement.com

Solo registered investment advisors are considering joining 1099 platforms as Securities and Exchange Commission cybersecurity audits expand, according to executives at Mariner and Wealthcare speaking at RIA Edge Orange County in October 2026.

Matt Regan, president of Wealthcare Capital Management, said his firm underwent an SEC audit last year that included 104 questions focused on cybersecurity. An advisor managing $250 million would spend six weeks responding to such an audit, he said. Regan said advisors of that size are now closing their own Form ADV registrations and joining 1099 platforms. Wealthcare is owned by insurance holding company Sammons Financial Group and operates both 1099 and W-2 advisor models.

Rob Sandrew, head of Mariner Independent, the RIA's 1099 division, said artificial intelligence advancements are also pushing solo practitioners toward larger platforms. Firms that can outspend smaller operators on technology will create a gap between larger and smaller advisors, he said. Client expectations will rise significantly in the next three to five years, Sandrew said, and the advisor-client relationship will shift toward emotional intelligence. Mariner offers a 1099 model and a separate employee-owned RIA for advisors who want to transition.

A study by consultancy Winthrop & Co. found that supported-independence platforms charge advisors 10% to 20% of revenue in exchange for back-office services and access to scaled technology, the executives said. Stephen Caruso, director of wealth management at Cerulli Associates, said Cerulli surveys show many advisors question whether platform costs justify the loss of decision-making control.

Regan said independent firms hiring a chief investment officer, a trader and a compliance officer would spend more than the 20 basis points his platform charges. Sandrew said Mariner's back-office support and lead-generation resources give advisors time to focus on clients and growth strategy.

Regan said Wealthcare pays the same valuation multiples for 1099 independent contractors as it does for W-2 advisors. Sandrew said the firm is competing for mature advisors with strong track records and books of business, part of what one panel participant called a war on talent in wealth management.

Nate Angelo, chief executive of Composition Wealth, said on a separate panel that his firm sees growth through investment in talent rather than cost-cutting. One audience member said technology advancements may make solo operation easier and cheaper, but Regan said supported independence allows advisors to maintain clients and monetize their business without spending time on non-client tasks.

The Deployment Angle

Family Office Real Estate Daily Desk · our analysis, not the source's

Family offices evaluating RIA partnerships should ask how much the advisor spends on regulatory compliance versus client service. If a $250 million RIA loses six weeks to an SEC audit, that is roughly 12% of productive capacity annually, which compares poorly to a 10% to 20% platform fee that includes compliance infrastructure. Advisors who have not yet joined a platform may be underpricing regulatory risk in their operating model.

The argument for supported independence assumes continued regulatory expansion and rising technology costs. That assumption has held for the past five years, but it is not self-evident that solo operators cannot leverage third-party compliance and technology vendors at lower cost than a platform fee. Family offices co-investing with RIAs should model the advisor's all-in cost of independence, including compliance staff, cybersecurity insurance, technology subscriptions and audit response time, and compare it to the economics of a 1099 affiliation. If the advisor is within two years of a liquidity event, the platform's valuation multiple may matter more than the fee.

Platforms paying full-boat multiples for 1099 advisors are pricing in growth and cross-sell opportunity, not just the existing book. Family offices considering a minority stake in an RIA should underwrite whether the advisor's growth plan depends on platform resources or can be executed independently. If the advisor needs the platform's lead generation or technology to hit their forecast, the multiple reflects platform value, not standalone value, and the minority stake should be priced accordingly.

Questions this story answers

01Why are solo RIA operators considering giving up their own Form ADV and joining a 1099 platform?

Matt Regan of Wealthcare Capital Management said increased SEC reporting requirements around cybersecurity are a primary driver. Regan cited a 104-question SEC cybersecurity audit that left a $250 million advisor unable to operate normally for six weeks. Rob Sandrew of Mariner Independent added that fear of being outspent on AI technology by larger firms is also pushing solo practitioners toward platforms.

02What does it cost an advisor to join a supported-independence or 1099 RIA platform?

According to a study by consultancy Winthrop & Co., supported-independence channels charge advisors 10% to 20% of revenue in exchange for offloading back-office tasks and gaining access to scaled resources and technology. Matt Regan of Wealthcare argued that for growing independent firms, this can be more economical than separately hiring a CIO, trader, and compliance officer.

03Do advisors on 1099 platforms receive lower valuation multiples for their practices than W-2 advisors?

Matt Regan of Wealthcare Capital Management said advisors should not assume W-2 employment is required to achieve a high valuation. Regan said Wealthcare pays 'the same multiples as everyone else' for 1099 independent contractors.

04What role does AI play in pushing advisors toward larger RIA platforms?

Rob Sandrew, head of Mariner Independent, said AI advancements are driving solo practitioners toward larger platforms primarily out of fear of being left behind by firms that can outspend them on technology. Sandrew said there is 'a very strong consensus that in the next three to five years, client expectations are rising significantly' and that the advisor-client dynamic will become heavily EQ driven.

05Which firms were represented on the 1099 platform panel at RIA Edge Orange County?

The panel featured Matt Regan, president of Wealthcare Capital Management, and Rob Sandrew, head of Mariner Independent, the 1099 independent contractor division of Mariner. The panel was moderated by Stephen Caruso, director of wealth management at Cerulli Associates.

Browse every question the desk has answered →

Original reporting

WealthManagement.com

Read the original at WealthManagement.com →

ria-platformsregulatory-complianceadvisor-independencecybersecurityvaluation

Peer Network · By Invitation

The Thesis Exchange

Share an investment thesis in confidence. We pair you anonymously with up to two other family offices running adjacent strategies. Reviewed by Gallium's editorial team. No vendor pitch.