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More Than a Buyout: Protecting Your Legacy · Views from 6,230

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  Welcome to the Views from 6,230 podcast.
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  Join myself, Ryan Nauman, as I bring together financial markets, investments, economics, wealth management, and life to help investment professionals make sense of what's happening and prepare for what's next in order to make more informed investment decisions on behalf
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  of their clients.
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  This podcast is for informational purposes only and should not be relied on for investment decisions Hello, everyone, we are recording on location at the Steward Symposium, which is gonna be a great few days of fun conversations, great content,
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  and a lot of great insights.
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  One of the biggest challenges in the wealth management space is succession planning.
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  Well, I have on a perfect guest to talk about the challenge of creating a succession plan, what goes within, how financial advisors can, um, plan for a succession.
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  All right, I've already talked enough.
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  Let's go ahead and bring on the star of the show.
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  I'd like to welcome Tim Berklow.
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  Tim is a wealth advisor, legacy channel at Steward Partners.
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  Tim, thank you so much for coming on the show.
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  It's an honor to have you on.
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  Really excited about this conversation.
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  Can you please tell us a little bit more about yourself and your practice?
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  Sure.
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  And, uh, yeah, thank you for having me.
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  Honor here too.
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  So I was in the industry for, uh, 33 years as a veteran, all with the same firm, uh, from the day I, uh, graduated college.
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  And so, um, I had grown that with, uh, a group of other, uh, partners that we established our own firm in 1999 and grew that to a team of 15 and, uh, scaled the business.
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  And, uh, over time, we began to see that we really s- needed to start, uh, planning for the future.
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  So that's when we started bringing on next gen advisors, going deep, developing them, and, uh, establishing a true teaming relationship.
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  Mm-hmm.
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  I hear that term, uh, it- it's very pop- next gen.
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  Next gen.
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  How difficult was that to bring on n- find the right next gen advisor that really, you know, meshed with you guys who have been together for, like you said, 30 years- Yeah built a practice and been like, "Okay,
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  now how can we bring somebody like-minded to come up?"
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  Sure.
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  A little bit of a unique situation for me.
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  Uh, I did spend five years as a director of new advisor development, um, prior to going back into practice.
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  So it's something I was comfortable doing with the recruiting, training, developing.
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  And, um, so two of those first recruits, uh, in my own firm happen to be my two sons.
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  So, uh, they grew up watching what I did, and they said, "Dad, this is what we want to do."
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  And, um, as much as I did everything I could to make sure they were being objective and having opportunities to do other types of internships, uh, they, they were set on doing this.
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  Okay.
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  So, um, I knew they had, uh, the right makeup.
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  They had the right drive, uh, the intellectual capacity and, um, and just giving them all the tools and everything they needed, the, the modeling, uh, they thrived.
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  And so in addition to them, uh, we have a, a third next gen advisor who happens to be the son of our longterm, uh, office manager.
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  And, uh, it was the same situation.
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  Put himself through school, MBA program.
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  All three of them have CFPs, but it really comes down to investing the time properly to, to develop them.
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  I love that.
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  I love that, Tim.
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  I...
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  My dad was a dental technician, and I always had family friends been like, "Ryan, well, are you just going to take over your dad's business as a dental technician?"
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  My dad, he wa- he was not having it.
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  He was like, "You are not going to spend the rest of your life making teeth."
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  "You're gonna go do something else.
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  Uh, you are not taking over this."
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  So it's fun how everyone is, is different and- Sure um, I love those stories.
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  So Steward's legacy channel is built around succession, one of the most emotionally charged decisions an advis- ad- advisor ever makes.
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  What made you choose Steward as a firm to take the journey with?
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  But though also, y- you talked about your sons are in it.
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  Did you feel confident thinking then too that Steward is a good place for your sons also?
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  Thi- this was, uh, a really big factor, not just for my sons, but our entire team, is as we started looking to the future, um, everyone's been a part of that journey.
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  It was never all about the founding partners.
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  Um, everybody, uh, gave their all, uh, to service our clients and, um, follow the mission of what we were trying to achieve in helping people achieve financial independence.
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  So over time, We tried to create a succession plan for ourselves internally, and, uh, with the idea that the junior associates would have an opportunity to buy in and become the future owners, uh, managers of the firm.
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  But you begin to learn that that takes a lot of capital, and, uh, to be able to, uh, access that capital is a little tricky.
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  Mm-hmm.
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  And in addition to that is someone having the willingness to take that on, and it's not just the individual.
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  If they're married, they have a spouse, it- Yeah it's a family decision.
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  So, uh, we had hired a group of, uh, consultants to come in and help us work through this, and that's when we began to explore the opportunities with the RIA channel and, and take a look at, uh, the
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  possibility of teaming with a group of partners.
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  That was a whole new world for us.
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  It...
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  That was an education in itself.
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  But we got down to about six opportunities that were presented to us, and, um, I can tell you ultimately Stewart Partners was head and shoulders, uh, above the rest.
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  Mm-hmm.
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  Yeah, that's fantastic.
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  And, you know, a lot of advisors, I, I have so many conversations about succession planning, the challenges, how important it is.
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  You know, a lot of advisors, they talk about it for years before doing anything.
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  And about your process, you just, uh, you know, talked about the process you went through, and, uh, you hired a team of consultants.
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  What finally made it real for you?
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  And, and during that process that you went through, what was a big surprise that, uh, came out of that process?
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  Sure.
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  So in doing our due diligence, one surprise was everyone's gonna throw money at you.
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  And, um, but for us, it was much more than a money play.
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  Th- this was about getting ourselves to a place that we were gonna be able to service our clients to the best of our abilities.
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  And so when we had conversations with a number of these opportunities- A lot of times, it, they weren't taking a lot of time to really learn about us.
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  What were our objectives?
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  What was it we were looking to, uh, uh, achieve?
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  What were our core values?
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  Stewart Partners wa- was all over that.
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  And so clearly it came down to leadership, people, and the culture.
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  And so you can't have a culture without people, and you can't have a great culture without great leadership, and so that's really what came through.
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  Mm-hmm.
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  And, um, so in...
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  We were surprised.
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  We had the opportunity to speak directly with the senior leadership, uh, during that period.
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  Mm-hmm.
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  We were not doing that with, uh, with the others.
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  And, uh, what blew us away, they actually invited us out to their annual symposium.
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  This was before we even signed a letter of intent, and they gave us the opportunity to do our due diligence, interact with whoever we wanted to.
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  And all four of the, um, the managing partners- Mm came away with the same message.
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  The...
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  It was so consistent, the feedback we were getting from, uh, partners who were already here at Stewart.
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  Yeah.
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  You know what, Tim?
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  That's a great point.
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  I've had a lot of great conversations with the leadership team at Stewart, and across the board, it's all...
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  It, it, the message is, uh, consistent.
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  It's like, uh, I asked them, "Do you guys rehearse this?"
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  And they don't.
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  They have no idea what the, each one's gonna talk about, but they do know that it's the consistent message, culture, um- You, you nailed it.
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  And, and it, it could never be that consistent if it weren't authentic.
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  Sure.
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  Yeah.
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  No one, no one can fake it across the board- Yeah that well.
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  Exactly.
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  Exactly.
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  And do you think the people that go through succession planning or M&A, whatever it is, and this, and they focus too much on the money?
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  You said every firm's gonna throw money at you.
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  Sure.
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  And so that, that is an important part- Yeah of, of, of the formula.
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  You work very hard to build this up over time.
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  You've made a lot of sacrifices.
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  But, um, the good news, the money was there with Steward as well.
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  But it just wasn't the primary driver.
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  Um- Yeah what was wonderful to see is how much Steward was vetting us as we were vetting them.
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  And, uh, it was great to learn, and it's very obvious as we got more entrenched with Steward Partners, they're, they're very careful about who they bring on.
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  If it's not the right fit, it's, it's not going to be a, a part of someone they're looking to bring on.
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  Yeah.
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  That's fantastic.
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  So one of the more remarkable things about your story is that you went through the process, the success- succession process, it- you're still here.
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  You're happy.
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  You're s- well, you're still at another symposium right now as a, uh, advisor for, for, um, Steward.
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  So what does that say about Steward and how they approach it and, uh, how they work differently?
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  Yeah.
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  Um, what's really interesting with Steward is they are looking to make sure you're compliant and that you're servicing your, your clients properly and doing everything that would be expected, but knowing that people they're bringing on have demonstrated, um,
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  a, a high ability to, uh, do the business they do very well.
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  So more than anything else, other than staying out of your way, it's finding out how can we enhance what you've already been doing.
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  And so the technology and tools we have access to, this is like something we have not had the opportunity to tap to in, i- in the past.
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  Technology is moving so fast that many of your very large conglomerates just can't keep up with those changes and be as nimble as someone like a Steward Partners.
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  Mm-hmm.
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  And they are cutting edge and ensuring they're giving us every opportunity to, to be at our best.
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  Yeah.
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  No, very good point.
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  So let's talk about the clients because, you know, we talk about succession planning and, you know, you always worry about, well, is that gonna, that new advisor that you're bringing on, next gen advisor, gonna be right for the
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  clients?
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  And so the clients can be nervous- Mm about this transition also, because they, at the end of the day, chose you.
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  Yeah.
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  They didn't choose a firm so much, they chose you to be their financial advisor.
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  How did you manage that relationship during succession planning or transferring, moving your book of business to Steward through the transition, and, uh, how has that relationship held up?
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  Yeah.
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  A- and that goes, piggybacks the question of why am I still here a- after the transition.
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  But I think we all, um, begin to experience some, um- Burnout i-in this career, especially when you're in over three decades grinding and, uh, when you're running an independent, uh, branch or, or a franchise, you're doing the payroll,
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  you're managing the technology, you're handling the personnel.
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  What I was able to express to our clients is that at this stage, I have partners that are taking that off my plate so we can go deeper and really focus on the deep conversations and, uh, analysis work
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  we need to be doing to ensure We are making sure every bit of your financial plan is sound.
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  So, um, more than ever, I am excited, feeling a lot lighter on my feet- Mm and, uh, having the ability to really put, as we said before, the next gen advisors, uh, taking more of a l- uh, leadership
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  role in being the face of, uh, a primary relationship.
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  I'm still there.
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  I get to consult and, uh, really be more engaged in the community and make it rain for the firm.
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  So, uh, I'm having fun again.
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  Y- that's such a good point, and it, it just helps you.
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  It brings more value to the client, enhances that client experience which we talked about is so important, though.
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  Um, so while, yes, it might be a little concerning for them, it, whether they like it or not, they're going to see more of you.
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  Yeah.
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  A- and, and they've seen that, so, uh, the good news is we, we're well over 90% retention.
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  Mm.
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  And, um, I think being that you've had those relationships so long with so many clients, they trust you, and they, they, they, you know, there's a good portion of them that are saying, "Hey, if you believe this is
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  what's right, we're coming along for the ride."
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  The others, you have to talk it through a little bit, little bit of hand-holding, but, uh, what, what's most important, here we are over 18 months later, and they could not be happier that they've continued to come along
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  for the journey.
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  Yeah, Tim, that's great.
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  So what does your practice look like today compared to it did when you started this, uh, succession, and w- what's maybe better, what's different, maybe don't want us to maybe stay the same or even worse?
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  Yeah.
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  So I would say, across the board, it's better.
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  And, um, and the one thing we've really wanted to ensure is that, um, our entire team really felt like they, they had a stake in what we were trying to achieve.
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  So one thing that's different from the way we operated in the past, we were operating in silos.
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  Everyone was operating their own book.
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  Right now, we're a team servicing all our clients as a whole, and so we have different responsibilities.
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  We have, uh, different go-tos for different client relationships, but all of us are taking a percent of the business as a whole and holding each other accountable to doing the job right.
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  So that is rewarding for everybody.
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  As the tide rises- Mm everybody is.
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  And in addition to that, um- As I said, the technology has just really allowed us to streamline so much of what we do, uh, operating so much more nimble than, than we had in the past.
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  And, um, it's given a c- very clear path to the senior, uh, managers that, hey, when they wanna choose to retire, there's a clear path not only for them, but for the juniors who are gonna be able to
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  step in.
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  I often say on the investment side, you wanna make it, you know, keep it simple, but also sleep at night, right?
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  And when the older advisors, they ha- know what, you know, is in store, they've got, you know, a good succession plan, they can sleep at night.
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  100%.
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  So speaking of the older advisor, you know, that older generation- You could say advisors.
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  Uh, who is in the back half of their career and hasn't started really thinking seriously about succession, what's the message you really want them to hear?
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  Sure.
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  I encourage all those to get on this as soon as possible because y- your, your years turn into decades quickly.
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  And, um, often this type of planning, it's not something you wake up on a Saturday and say, "I'm gonna really start to tackle this and figure something out in the next couple of months."
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  It, it's, it's often, uh, a one to two year period of being fully, uh, invested in the process of, of figuring out how you're gonna go about this.
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  And I would encourage those that are at that point to not try to do it on their own.
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  Talk to others that have done it well.
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  Um, get feedback and, of, uh, of how they approached it, and, uh, reach out to a group like Stewart Partners.
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  They're not the only one in town, but I- Mm they certainly have a, uh, an answer of how to go about getting this done successfully.
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  Yeah, that's a great point, Tim.
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  So the legacy channel model is relatively unique in the industry.
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  What do you think most advisors don't understand about how it actually works, about that legacy model?
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  Mm-hmm.
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  I often think there's a fear that, uh, we go into something like this, and now I'm going to be mon- mo- monitored.
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  I'm not gonna have the flexibility or autonomy I've had, uh, as I had in the past.
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  That is not true at Stewart.
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  They see you doing something well, you just keep doing what you're doing, and as I said before, how do we help you do it better?
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  Um, I think the other fear is that, um, I'm gonna get squeezed out of here, and that is not the case.
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  Um, we're here because everyone has various skills and talents that are helping the firm as a whole.
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  And, uh, with that, they, they, they want the best of what you have to provide and, and, and give to the whole group as a collective.
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  Let's talk about that fear.
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  I'm really glad you brought that.
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  Perfect segue.
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  How has your experience really contradicted that fear of being squeezed out, right?
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  You might have gone through it, too, when you went through this, uh, transition.
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  How has that process, was like, "Well, that was a mis- I worried way too much about getting squeezed out," or that fear?
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  Sure.
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  So here we are, and we're talking at, at, at a time where I'm participating in a premier partners event where, um- They are looking for extra opportunities to tap into s- you know, the veterans and those who are
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  doing things at the highest level.
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  H- how can we do this better?
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  What, what's your input?
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  What's your feedback?
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  And, um, we are finding that we're more a part of things often than we were in the past.
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  So, um, th- there's a complete contrast that, uh, from anyone that might have a fear of just being tucked away in a corner.
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  Yeah.
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  Fantastic, Tim.
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  Lastly, looking ahead, you know, you're in your career, you're done with the succession planning, your sons are on board, you've got everything in place.
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  What are you looking forward to most moving forward?
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  Yeah.
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  So my whole mantra is to help people simplify life, instill confidence in their financial future, and pursue growth.
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  And the same way I've done that for our clients o- over the decades, it's now, you know, engaging and doing that with, uh, my longtime, uh, lovely wife who's made, uh, the sacrifices with me along the way, and
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  continuing to provide that to my family and, uh, next generation.
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  There it is, next generation again.
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  I became a grandfather this year.
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  Oh, nice.
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  Congrats.
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  So, so, uh- Awesome uh, just r- just more life balance than I've ever had- Yeah in, uh, financial independence, the, the flexibility with time, uh, just living life to its fullest, right?
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  Fully present.
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  Awesome, Tim.
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  I love it.
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  Great conversation.
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  Great insight for all the other financial advisory.
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  There's a lot of them out there that are in this situation, right?
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  So fantastic conversation.
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  I love it.
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  Where can our listeners get more information about your practice at Steward Partners?
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  Sure.
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  You can, uh, look us up online at, uh, mainstaywealth.com, and, um, we'd be happy to connect with you.
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  Awesome, Tim.
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  Thank you for the, sharing such fun conversation.
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  Great insight.
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  It was a lot of fun.
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  It's been an honor.
• 21:19
  Thank you everyone for listening you can watch all of our other episodes on YouTube Spotify, and wherever else you get your podcasts.
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  Thank you very much, and have a great rest of your week.