Future of Thrivent Advisor Network in question after Armitage exit

The laying off of five top executives at Thrivent Advisor Network Wednesday has raised questions about the future of the four-year-old platform made up of 25 advisory businesses that combine for $5 billion in client assets.

The RIA, known as TAN, appeared to send up the white surrender flag by firing president Carolyn Armitage, along with business development consultant Katie Tram, growth program manager Lori Sherman, and business development officers Tom Pistole and Erik Feldman.

In response to a request for comment, a Thrivent spokesperson emailed a statement that positions TAN as “an important part of Thrivent’s financial advisor spectrum, which also includes virtual advice, career advisors and our National Practice Group.

“We’re committed to maintaining a platform for independent wealth management-focused financial advisors and business owners who share Thrivent’s values and desire increased flexibility and autonomy,” the statement continued.

Regarding Armitage, who was brought on two years ago to build out TAN as a platform for advisors seeking an independent model, the Thrivent statement confirmed her departure and added, “we are grateful for her service and wish her the best. We’ll continue to evolve and position Thrivent Advisor Network for future growth while providing a great experience for employees, advisors, and clients.”

Chuck Failla, president of Sovereign Financial Group, who broke away from the wirehouse channel to go independent five years ago, described the sweeping layoffs at the top of TAN as sending mixed messages.

“It is not clear to me if this is an indication of Thrivent wanting to tap the brakes on the RIA space, or if they are simply looking for different leaders to continue its foray into the space,” he said. “If it’s the former, one speculation as to why may be because they are not fully onboard with the lower margins that the RIA space generates for firms.”

Armitage, 56, who joined Thrivent from the Echelon Partners investment bank and consulting firm, where she was a managing director, said she felt her role evolved during her short time at Thrivent from being charged with acquiring advisor teams to populate TAN, to recruiting teams, to essentially idling down the business.

“When things like this happen, there’s usually more than meets the eye,” she said. “Thrivent is changing direction a bit, and they have decided to indefinitely stop recruiting new offices into TAN.”

The final months of Armitage’s tenure as the head of the platform stood in stark contrast to the celebrated beginning, when Thrivent Financial touted TAN as a ready alternative for both advisors working in Thrivent’s captive salesforce and any outside advisors looking to operate on the TAN RIA.

“I thought I was coming there to do acquisitions and my charge was to make TAN a leading independent wealth management firm,” Armitage said. “I had several deals in the pipeline, and one in the letter-of-intent stage, and Thrivent felt it was too much competition for the captive side and they shut down the funding for acquisitions.”

That shifted the focus to recruiting, where Armitage said the team was building momentum and showing progress. She brought on two teams and had to leave $1 billion worth of advisory team assets in the pipeline when the recruiting efforts were shut down.

“Our success in recruiting and branding, I think, was spectacular for the short time I was there,” Armitage said. “I think the independent space created a lot of friction for Thrivent’s career channel.”

Part of this can be attributed to the inertia of legacy platforms.

Thrivent is a 122-year-old insurance company that evolved over the years from Thrivent Financial for Lutherans to include the broader Christian community in 2017, but the captive insurance sales business still dominates as the company’s profit center.

Thrivent’s initial push for TAN in late 2019 included 25 teams moving from the company’s captive sales side to the independent platform. But one loophole that emerged was some teams were simply using TAN as a stepping stone toward launching their own registered investment advisor and breaking away completely.

At least a half dozen teams had taken that route, according to sources, essentially using TAN as an on-ramp to independence.

When Armitage came on board, one of the first things she did was add a provision the agreement that any Thrivent advisors moving over to TAN had to stay for at least seven years or they would not have the right to solicit any of their clients if they left.

At this point, a day after being let go, Armitage said she is mostly focused on helping her former colleagues find work.

She said she is looking for work, but also plans to take a few months to relax at her home in Southern California and spend some time boating with her husband.

“I was not intending for this to be a two-year stint; I was expecting this to be my final build-out,” Armitage said. “When I started, I could envision TAN, instead of being the tip of the tail of the dog, I thought we’d be the dog wagging the tail.”