In 2014, Jake Tomes got a call from the founder of the fastest-growing accounting firm in the country with a proposition.
"Bill Carr called me, introduced Carr, Riggs & Ingram to me, and I obviously knew of Carr, Riggs & Ingram," shared Tomes, who was CEO and president of Dallas-based Level Four Group, a privately owned wealth management firm, independent broker-dealer and general insurance agency. "He made a comment that Carr, Riggs & Ingram hadn't dived into wealth management yet, and they were ready to do so. They needed to do so with some scale, and he offered a leadership opportunity to me personally: to bring Level Four in to be part of Carr, Riggs & Ingram."
When Tomes accepted that initial offer to join the Top 100 Firm, Level Four became what he believes is both the largest broker-dealer and the largest insurance marketing organization in the country owned by a CPA firm, and Tomes remained CEO of the Level Four Wealth Management division of CRI.
After the deal, CRI's growth trajectory continued, and it ranked No. 23 on the Accounting Today's 2023 Top 100 Firms list, while Level Four ranked No. 12 on Accounting Today's Top Firms by Asset Under Management list and has continued its expansion through subsequent transactions. Level Four, which was founded in May 2000, acquired broker-dealers in 2020 and 2022, followed that up with Raleigh, North Carolina-based Mid-Atlantic Securities in January 2023, and most recently added a team of Minnesota-based partners departing from Thrivent Financial to form their own brand.
Level Four currently has $9.25 billion in client assets and 225 advisors, who have access to the company's platform, individualized support and training, technology and research.
Level Four Group, which comprises specialty divisions Level Four Financial, Level Four Advisory Services, Level Four Capital Management and Level Four Insurance Agency, offers core services including investment solutions, financial reviews, individual asset management, a line of insurance products, and more. It also owns a sports and entertainment and business consulting divisions, and, with CRI, a trust and a payroll company.
Along with Level Four's complex structure and a spate of acquisitions fueling its rapid expansion — Tomes aims to double the firm's size by 2025 — come some growing pains.
"There are challenges always around adapting to size and scale for us, for where we were prior to Carr, Riggs & Ingram, in 2014-15, to having 1,500 professionals and 60 locations to try to serve," Tomes said. "It's a big challenge to get out there and get an idea, set what our vision could look like, and help execute it, of having the opportunity of that size, to make sure we execute appropriately into it. It's something we're very concerned about and try to do in a scientific way."
Level Four applied this approach when it expanded into the Atlanta market in 2019, Tomes said, emphasizing that they "were not rushing to market."
Instead, his team was "hesitant to go into Atlanta until the right people were on the ground there to serve the client base, and not go to market too early," he explained. "We didn't enter into Atlanta until 2019 when we found the right team leader to represent our services and our business … .
Our services are very localized to related businesses and you can't manage services too early in Atlanta when you are in Dallas."
Level Four is continuing to focus on expansion in the Southeast, with offices across Alabama, Arkansas and Florida.
Coordination and focus
Tomes is applying the same type of methodical, strategic growth to Level Four's other large challenge, the current talent shortage, an ongoing struggle it shares with CRI and the accounting profession at large.
"We're not unique in having that challenge; every entity is faced with that challenge, whether tax, audit, consulting or even wealth management," Tomes explained. "There are fewer and fewer advisors, and CPAs are coming into business, and many are retiring out. It's happening with wealth and accounting, and private equity is probably causing more consolidation. But you have to manage the consolidation, which is either a challenge or an opportunity."
Level Four's affiliation with CRI has clearly been the latter, boosting both firms' bottom lines, but it has also invited the complications of communicating the various service lines offered through their combination.
"There's a challenge of coordinating messaging, with our very broad scope, to be focused and articulate it," Tomes shared. "There's training we have to do and awareness. There are over 2,500 team members in the CRI family, and a lot of new people coming in, so we're focused on educational awareness, making sure in executing to the client base, how we message and present the firm to the communities we serve. Coordination also has to be done for multiple offices and markets — we have about 90 markets across that footprint — and it creates some challenges."
Fortunately, industry trends are in Level Four's favor, with accountants increasingly viewed as outside the bounds of pure compliance work, so that clients of CRI and Level Four view both firms as more holistic solution providers, and cross-selling opportunities continually arise.
"We now have a model that's fairly complex with the services we are able to offer," Tomes said. "Which carries forward that theme of where the future of financial advice is going to go. CPAs that were typically viewed as accountants are now viewed as advisors. The industry is going to require the advisor of the future and require them to be very comprehensive."
Level Four is well-equipped for this client of the future, according to Tomes. "That positioning gives us a unique advantage to be a one-stop trusted advisor, given our breadth and depth. For small businesses and even midsized businesses, and high-net-worth individuals looking for [services], instead of going to four to five other companies to get all these services, they get them all in one place, in the trusted advisor relationship, typically with a CPA."
Level Four's affiliation with CRI is also indicative of the increasing number of combinations that accounting firms are entering with non-CPA firms. "The future of the profession is contingent on the evolution of models, the consolidation of models, especially those in the advice business, to broaden the scope," Tomes said. "A successful merger is key; the alignment of visions, that organizations are not just short term but long term in approach. Mergers can be extremely successful if that vision is aligned."
