By Norb Vonnegut

Feb. 4, 2016 8:00 a.m. ET

“I-bankers look at us as second-class citizens,” a financial adviser from one of the big brokerages recently said to me, referring to his colleagues in investment banking.

If you are a wealth manager at a major financial institution who has phoned an I-banker without going through proper channels or listened to your boss rant after he or she was excoriated by a liaison from those hallowed halls, then you know exactly what the adviser means.

It is tough to get leads from I-bankers. It is tougher to interest them in many of your clients who need investment-banking services. And I know, as an industry veteran, it is toughest of all when you get a referral after a banking transaction, when it is too late to employ estate-planning techniques that would have saved the client a fortune in taxes.

The tepid cooperation between I-bankers and wealth managers, a long-simmering problem, is changing. Breakaway advisers and the companies that support them are creating alliances that rightsize I-banking relationships, diversify the providers of investment-banking services and meet the capital needs of small-business owners. It is yet another niche where registered investment advisers are poised to take market share.

Root of the problem

For as long as I can remember, the financial behemoths have tried to improve the teamwork between I-bankers and advisers. But there are fundamental problems, which are still unresolved.

Financial advisers at big firms often work with entrepreneurs who are important to them but whose businesses are too small to be of interest to their colleagues in I-banking, says Shirl Penney, the president and chief executive of Dynasty Financial Partners, which helps breakaway advisers develop their platforms.

To address this disparity, Dynasty is building alliances with middle-market I-banks that focus on smaller transactions. Competitors such as FallLine Securities are pursuing similar strategies. And in a less systematic way, some scrappy RIAs, driven either by need or instinct, are developing independent access to the capital markets.

One of the I-banks in Dynasty’s network is Scura Paley & Co. Paul Scura, the founder and managing partner of the New York firm, says larger investment banks typically require minimum fees of $3 million or more, which might mean transactions involving companies with enterprise values of roughly $240 million or more.

But he estimates that 90% of the deals identified by RIAs are with companies whose enterprise values range from $15 million to $150 million. According to Mr. Scura, the sale of a $150 million company would generate about $2.25 million in sell-side fees and therefore be too small to meet the I-banking minimums at the firms that most breakaway advisers leave behind.

Yikes. No wonder the advisers are bolting. It is tough when you can’t deliver investment banking to clients with $150 million in assets.

Mr. Scura adds that many business owners have no intention of selling their companies but simply need operating capital, which they obtain through even smaller transactions such as sale leasebacks or mezzanine debt financing.

Multiple I-banking relationships

The ability to interact with a variety of investment-banking firms is also attractive to independent advisers. “When you’re dealing with closely held businesses, capital is your lifeboat,” observes Jim Maher, who in 2013 founded Archford Capital Strategies, an RIA with about $500 million in assets under management. Mr. Maher, a Dynasty client, works with about 100 business owners and stresses the importance of picking and choosing I-bankers.

“I’m not captive to one organization,” he says. He adds that his previous employer rejected numerous client transactions during 2012—deals totaling well over $200 million—and that a unilateral “no” can cost an adviser important client relationships.

Chris Copps of Corient Capital Partners, a Newport Beach, Calif., RIA founded by a breakaway team in 2015, notes an additional benefit when advisers help their clients choose among multiple investment bankers: a change in the working relationships between wealth managers and I-bankers.

“The bank is not only accountable to the client. They are also accountable to us,” says Mr. Copps.

Now that’s a beautiful thing.

Estate-planning benefits

But what is really beautiful about closer alliances between advisers and investment bankers is the potential to choreograph huge estate-planning victories. So let’s head back to a wirehouse environment, to see how I-banker/adviser cooperation can sometimes pay off.

Say you get a referral from investment banking through, ahem, proper channels. You recommend that a client place $10 million of private-company stock, a small portion of his total holdings, into a grantor retained annuity trust, which freezes appreciation of the $10 million in stock for estate-tax purposes. And later, your firm IPOs the client’s business for three times the existing value.

High-fives all around. It is a huge victory for the client, for the firm too. You have helped the client realize and shield a $20 million gain from estate taxes of 40%. It is one of those win-wins that occur at wirehouses all the time but, regrettably, are so much more difficult to package for clients who own middle-market businesses.

So how big is the wealth-management opportunity for entrepreneurs with family businesses?

The 2014 Family Wealth Transfers Report by Wealth-X, a firm that researches individuals with over $30 million in assets, says their average age is 59, 38% of their net worth is concentrated in privately held businesses and, in the U.S. alone, $1.57 trillion in total assets is likely to pass down to the next generation over the next 10 years.

My take: Why be a second-class citizen in a large firm, when you can be a hero in your own shop?

— Norb Vonnegut built his wealth-management career in New York and now writes thrillers about financial malfeasance. Email him at norbert.vonnegut@dowjones.com. Twitter: @NorbVonnegut