Strategic Wealth Partners was acquired by Kovitz Investment Group Partners, LLC ("Kovitz"), a registered investment adviser with the SEC on May 1, 2024. Strategic Wealth Partners is now a division of Kovitz and its registered investment adviser. Materials created prior to this date were created by Strategic Wealth Partners and are accurate as of the time of publishing.

The PPP and Registered Investment Advisors; Necessary Lifeline or Nice to Have?

I like to remind our team at Strategic Wealth Partners that we are fortunate, especially in today’s world.  There are so many reasons, but to highlight just a few:

  • First and by far most important, no one on our team has suffered a coronavirus-related death or serious illness in their immediate family thus far.
  • Second, we can be very effective working remotely. I’ve written about that before, and the messages from that March 21 post are still true today.  While our business is about relationships first and foremost, the nature of our day-to-day activities lends itself very well to a work-from-home environment.  Not every service business can say that.
  • And finally, our business model still works during the kind of disruption seen today. We don’t suffer anywhere near as much as so many other small businesses; we still have all of our clients and are finding that our approach to wealth management rings especially true in times of uncertainty.  We’ve actually added quite a few new clients over the past several weeks.

So yes, we are fortunate, and we have much to be thankful for.

But this post is about more than our good fortunes; I want to use the rest of this space to discuss the last item above – how businesses like ours fare in a pandemic, or for that matter, in any lousy market environment.  Our only source of revenue is an advisory fee that is tied to the assets we manage on behalf of our clients.  When markets go up, we have a tailwind; when markets decline, the revenue from our fees declines as well.  So when a crisis hits and the markets tank, it’s a big hit to our top- and bottom-line.

We actually started SWP during the Great Recession of 2008. Even our most conservative projections turned out to be far too rosy.  But we survived, and ultimately we thrived.  Sure, it was painful, but we actually leaned into the tough times and invested in people and other resources.  I’m convinced that we are a better firm today because of the rough patch we and our clients faced when we opened our doors.

Enter the 2020 pandemic.  The stock market declined swiftly and precipitously from mid-February through most of March, with the S&P 500 losing over 30% of its value before starting to recover.  That meant that when we billed our clients in April, our revenues were down, just as our clients’ portfolios were down.  Of course, our portfolios are well-diversified, so the impact on our revenues was somewhat muted (much like it is muted to the upside in a rip-roaring bull market).  Our investment philosophy is designed to protect against extremes in our clients’ portfolios, which has the ancillary effect of moderating swings in our revenues.  Of course, a business like ours does have a relatively fixed cost structure (at least in the short run) so any hit to the top line becomes an even bigger hit to profits.

Now let’s turn to the much-discussed PPP loan program through the Small Business Administration (SBA).  The entire program is designed to keep people employed and small businesses running during the COVID-19 pandemic.  The program is not designed to be a giveaway to business owners; simply put, it is the “Paycheck Protection Program,” not the “Profit Protection Program.”

At SWP – and I daresay the vast majority of other RIAs around the country – our profits will be hurt in 2020.  But our team’s paychecks were never in doubt.  In fact, just a few days after we began working from home, we had our first firm-wide video call during which we made it clear to the team that no one was in danger of losing their job as a result of the pandemic or the related market decline.  Our partners are prepared to take the hit so our staff doesn’t have to.

As we learned about the provisions of the PPP, we quickly decided that a business like ours was not the intended beneficiary of the program. We could not, in good faith, meet the requirements, which, among other things, require the borrower to certify that “…economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.”  That’s simply not the case for us or most other firms with our business model.

More recently, I have read several articles on (see here for an editorial on the subject) and in Investment News (here and here) that discuss RIAs of a similar (or even larger) size to SWP that have taken PPP loans.  It’s not my place to judge the unique circumstances of other firms, and I suppose there may be cases where a firm has an outsized cost structure or perhaps a different revenue model, making a loan “necessary.”  But especially given the extreme economic hardship facing so many businesses around the country, I find it hard to understand how a well-run advisory business could truly “need” the PPP loan in order to keep their staff employed and continue to pay the rent.

The good news is that such loans are often disclosed in the recipient’s regulatory filing, so it’s easy enough to find if a discerning consumer chooses to look.  The SEC has a website that allows a consumer to search for any RIA and read their form ADV to learn about their business.

Stable, well-run investment advisory firms like ours exist to help clients fulfill their hopes and dreams, and to guide them through both good times and bad.  If these firms properly plan for their own financial futures, their clients should not have to be concerned about the advisor needing government assistance to weather the storms.

We are proud of how well our team is functioning in this new world, and profoundly grateful to our clients and friends for trusting us to work with them. These are the partnerships that have helped us get to where we are today, and we look forward to the time when we can once again be together in person.


Sources:  Yahoo! Finance and

This is not an endorsement of service providers and we assume no responsibility for any information, advice or services provided. This article contains general information that is not suitable for everyone. The information contained herein should not be constructed as personalized investment advice. Reading or utilizing this information does not create an advisory relationship. An advisory relationship can be established only after the following two events have been completed (1) our thorough review with you of all the relevant facts pertaining to a potential engagement; and (2) the execution of a Client Advisory Agreement. There is no guarantee that the views and opinions expressed in this article will come to pass.

Strategic Wealth Partners (‘SWP’) is an SEC registered investment advisor with its principal place of business in the State of Illinois. The brochure is limited to the dissemination of general information pertaining to its investment advisory services, views on the market, and investment philosophy. Any subsequent, direct communication by SWP with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. For information pertaining to the registration status of SWP, please contact SWP or refer to the Investment Advisor Public Disclosure website (

For additional information about SWP, including fees and services, send for our disclosure brochure as set forth on Form ADV from SWP using the contact information herein. Please read the disclosure brochure carefully before you invest or send money (

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