Bringing a slice of America to an Aussie wealth manager

Stellan Capital’s new CEO Jim DeCarlo details how the firm is looking to organically double its assets within 18 months and its goals for the long-term future.

The private wealth management company was established in 2019 by founding partners Tom Hicks, David Leon and Ivan Rados, and has offices located in Adelaide and Melbourne.

Stellan Capital provides strategic financial planning, portfolio management and family office services to high-net-worth (HNW) and ultra-high-net-worth (UHNW) Australians.

Having recently appointed DeCarlo as its new chief executive earlier this month, Money Management spoke with the CEO to unpack his plans for Stellan in the near future and over the longer term.

DeCarlo holds more than three decades of experience working in financial services across the globe, having begun his career in Australia and worked in the US wealth management space from 2012 up until last year.

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In the US, he helped wealth management company StratWealth double its size from US$800 million ($1.2 billion) in assets under management (AUM) to US$1.6 billion over three years as its chief executive.

After the company was acquired by US-based advisory firm Wealthspire Advisors, DeCarlo took up the role of chief growth officer at Wealthspire and grew its AUM from US$10 billion to nearly US$20 billion over another three-year period.

“What I learnt in the US is how to scale a business; restructure a business; create a change management culture that drives innovation, collaboration; provides psychological safety; and always builds trust – all driven towards one thing: how do you create a client experience that’s repeatable?” he told Money Management.

DeCarlo has similar plans for Stellan Capital, he explained. The business has just over $1 billion in client assets which he is looking to grow twofold over the next 12–18 months.

“The vision is Stellan 2.0 – it doesn’t happen overnight. It’s a slow process. It has to happen gently and has to happen organically,” the CEO said.

“The immediate vision is to double it – let’s go to $2 billion. But to do that, there’s a technology conversation that needs to take place. I think artificial intelligence (AI) will help scale the business big time. We’ve got a couple of big projects going on right now that will improve our technology stack itself and will bring more efficiency to the planning processes as well.”

In addition to improving the company’s technology stack, driving organic growth in its client base is another key focus to achieve its goal, according to DeCarlo.

“We’ve got a client base that’s just a tremendous audience for us, where we’re growing organically. We can’t just grow for the sake of growth, we have to have a reason. ‘Serving others to make their lives better’ is what I want to see going on the outside. What I want inside, and I’m hoping for, is a culture that says: ‘You grow, we grow. I invest in you. You grow intellectually, you grow your skill sets, you grow financially, but we grow as a firm.’ Because if you’re growing, we’re growing.”

Moreover, Stellan is focused on hiring additional support staff to gain more time back for its financial advisers.

DeCarlo continued: “We’re hiring. We’re adding a new trader analyst, adding a new associate adviser, adding a new client service associate. I want to free some people up so we can do more.”

While Stellan is doubling down on organic growth in the short term, the chief executive plans for M&A and inorganic growth to become a part of its strategy later down the line.

“My role is to manage the business and to create a beautiful business. So when we go to $2 billion [in assets], we’ll go to $3 billion. Then $3 billion to $5 billion to $7 billion. By then, we’re acquiring and going national,” he described.

Wealth management goes global

Reflecting on his experience working in the US market, DeCarlo said he expects the globalisation of wealth management to continue in Australia.

“What I really learnt in the US is that this is a global play. I think wealth management and financial services are going global.”

Namely, he believes that the entry of overseas private equity (PE) firms in the Australian advice industry is “here to stay”.

Several PE companies have already taken an interest in the Australian market, including Oaktree Capital investing $240 million in AZ NGA and the ongoing bidding war for Insignia Financial from Bain Capital and CC Capital.

Wealth management consultancy Finura also expects the “great privatisation of wealth” to continue in 2025, with names such as AMP, Iress, Praemium and Bravura potentially being eyed out, it predicted.

DeCarlo said: “I think private equity is here to stay. I know there are a few [PE firms] running around in Australia now. I think we’ll see more show up in Australia.”

He hinted that over the long term, being backed by an international PE company could be on the cards for Stellan if it were to seek out additional capital.

“Frankly, I would like to get Stellan ready, because we’re going to need capital to grow at some point when we start to go into organic growth. It’s possible to have an investor come in to help us do that. Private equity would absolutely be part of that conversation.”