Latest / Masters in Business / Shirl Penney on Building a $100 Billion RIA Platform (Podcast)

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Shirl Penney on Building a $100 Billion RIA Platform (Podcast) · Masters in Business

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  Speaker 1: M This is Mesters in Business with very renaults on
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  Speaker 1: Bluebird Radio. This week on the podcast, I have a
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  Speaker 1: special guest, Sheryl Penny. Uh comes from the most humble
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  Speaker 1: of all roots, and really we want to talk about
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  Speaker 1: a Horatio Alger story of a person who um essentially
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  Speaker 1: picked himself up by his bootstraps and and built a
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  Speaker 1: um career and turned that into a powerhouse business. He
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  Speaker 1: runs Dynasty Financial Partners, which has over sixty billion dollars
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  Speaker 1: on its platform. His story is really, i want to say,
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  Speaker 1: pretty unique in in Wall Street, very very humble origins
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  Speaker 1: UH and and very much a self educated person who
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  Speaker 1: was fascinated with finance from when he was younger and
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  Speaker 1: use that fascination really a motivation to uh self educate
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  Speaker 1: autodidact is the term for that, and really become one
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  Speaker 1: of the most impressive CEOs in the financial industry space.
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  Speaker 1: This is a little inside baseball. It talks about what
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  Speaker 1: happens when advisers and brokers at big firms like Morgan
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  Speaker 1: Stanley or Mari Lynch or Ubs decide they want to
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  Speaker 1: go independent and leave those big firms to set up
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  Speaker 1: their own shop. What Dynasty does is provides a pathway
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  Speaker 1: to do that, either so that the person can become
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  Speaker 1: independent or the person ends up on um Dynasty's platform. Uh,
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  Speaker 1: this is a pretty fast growing space. We've seen major
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  Speaker 1: changes in the financial services industry over the past twenty years.
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  Speaker 1: Most of that acceleration took place after the financial crisis,
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  Speaker 1: where I think the once mighty brands no longer carry
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  Speaker 1: the same cash because of their involvement in in what
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  Speaker 1: took place with subprime and CDOs and all that not
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  Speaker 1: so much fun stuff. Anyway, if you're at all interested
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  Speaker 1: in financial services, registered investment advisories, anything along those lines,
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  Speaker 1: I think you'll find this to be a fascinating conversation. So,
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  Speaker 1: with no further ado, here's my discussion with Dynasty Financials
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  Speaker 1: Ryl Penny. This is mesters in Business with very results
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  Speaker 1: on Bloomberg Radio. Ryl Penny, Welcome to Bloomberg and Barry's
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  Speaker 1: so great to be here. I am a huge fan
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  Speaker 1: of the show, so I'm thrilled to be a part
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  Speaker 1: of it. Thanks so much for the invite. Well, my pleasure.
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  Speaker 1: This is this is long overdue. We're gonna talk about
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  Speaker 1: Dynasty in a little while. I want to start discussing
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  Speaker 1: your background because in the world of finance, your story
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  Speaker 1: is kind of unique. Would you mind sharing a little
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  Speaker 1: bit about your background with us? Sure, I'm happy to look.
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  Speaker 1: We're we're all living our own unique version of the
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  Speaker 1: American dream. But I'll tell you a little bit about mine.
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  Speaker 1: So I'm from a little fishing village the easternmost point
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  Speaker 1: in the United States in Maine called Eastport, Maine, population four.
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  Speaker 1: I was raised there by my step grandfather. When I
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  Speaker 1: was eleven years old and my grandfather was in his
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  Speaker 1: early seventies, the house that we were living in was condemned,
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  Speaker 1: literally fell down around us, and for three years when
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  Speaker 1: I was eleven twelve thirteen, we were homeless, lived with
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  Speaker 1: various neighbors. Obviously very cold in winters in Maine, but
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  Speaker 1: a great motivator when you're cold and hungry at times.
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  Speaker 1: And always had great love and support of my my
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  Speaker 1: step grandfather, but was fascinated by by numbers, was always
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  Speaker 1: good and math. Convinced my high school teachers to have
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  Speaker 1: the stock market game added at the school. And I
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  Speaker 1: used to tell people, you know, someday I'm going to
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  Speaker 1: go to college and U and head off to Wall Street,
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  Speaker 1: and people kind of chuckled because not only had no
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  Speaker 1: one in my family ever gone to college, no one
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  Speaker 1: from that part of the state had ever gone off
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  Speaker 1: to New York to build a career in finance. I
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  Speaker 1: used to ask a lot of the tourists who would
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  Speaker 1: come visit to bring me copies of financial publications. And
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  Speaker 1: I was self taught, just always fascinated by finance and
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  Speaker 1: wealth management and was determined to somehow, some way find
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  Speaker 1: my way to building a career and in finance. And
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  Speaker 1: my grandfather always told me, look, you can do anything,
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  Speaker 1: even though he only had a fifth grade education. He
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  Speaker 1: always told me can do anything you want in life
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  Speaker 1: if you work hard enough towards it. And and I
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  Speaker 1: believed him. And it's been quite a journey. So you
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  Speaker 1: go to not the usual Wall Street feeder schools. You
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  Speaker 1: end up at Bates College, which is a small liberal
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  Speaker 1: arts school. How did you find your way into the
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  Speaker 1: financial services industry from that education? We are blessed in
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  Speaker 1: the state of Maine with three great lebo art schools,
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  Speaker 1: Bates and Bowden and Colby. Many people would know those schools.
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  Speaker 1: Part of going to Bates was I could stay in
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  Speaker 1: Maine and thankfully, very the day before I graduated from college.
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  Speaker 1: My step grandfather, who had raised me and meant so
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  Speaker 1: much to me, as you can imagine, he died in
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  Speaker 1: my arms, and I had the opportunity to give him
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  Speaker 1: my diploma before he did pass. I bought a suit
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  Speaker 1: for thirteen dollars at the Salvation Army UH and I
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  Speaker 1: wrote a bus a couple of days past my graduation
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  Speaker 1: to New York City and I interviewed at Smith Barney, which,
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  Speaker 1: as many of your listeners will know, is now part
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  Speaker 1: of Morgan Stanley. And I had interned my junior year
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  Speaker 1: at Dates at the branch location in Portland, Maine at
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  Speaker 1: Smith Barney, so I got to know some people there.
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  Speaker 1: Basically traded a summer's worth of work for an interview
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  Speaker 1: in New York. I rode the bus sixteen hours, and
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  Speaker 1: my biggest challenge that morning, Barry was making my way
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  Speaker 1: through a revolving door, which I had never seen at
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  Speaker 1: point in my life, getting up an escalator which I
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  Speaker 1: had also not seen again being from a very small town,
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  Speaker 1: you know, fishing village in Maine, making my way through
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  Speaker 1: multiple elevator banks, and arriving there at my interview, which
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  Speaker 1: I was a half hour early four uh, And I
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  Speaker 1: just said, look, you know, I'll here's my my main roots.
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  Speaker 1: And I had a job since I was ten years old,
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  Speaker 1: had to and just said, look, you know, I may
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  Speaker 1: not be the smartest person in the room, but out
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  Speaker 1: work everyone. I'm self taught, and I had studied a
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  Speaker 1: lot about you know, Sandy Wile and City Group and
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  Speaker 1: Smith Barney. And they said, look, come back next week
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  Speaker 1: for a second round interview. And I said, you understand
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  Speaker 1: what I had to go through to get here. I
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  Speaker 1: gotta go all the way back to Maine and come back.
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  Speaker 1: And the first time that I ever flew on an airplane,
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  Speaker 1: Barry was. They bought me a flight to come back
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  Speaker 1: the following week for the second round interview, which went well,
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  Speaker 1: and I was hired and and off I went to
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  Speaker 1: New York, not knowing anyone but to start my career
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  Speaker 1: in finance. So tell us a little bit about your
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  Speaker 1: experience at Smith Barty. What did you do, what roles
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  Speaker 1: did you hold, and and how long did you stay there.
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  Speaker 1: The punchline is I, before starting Dynasty Financial Partners, I
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  Speaker 1: spent a little over ten years at Smith Morning and
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  Speaker 1: it was a great place to learn the business. I'm
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  Speaker 1: a huge believer in mentorship by committee. I had some
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  Speaker 1: great mentors when I was there. I moved around the country,
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  Speaker 1: which was fantastic. I went to l A, I went
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  Speaker 1: to San Francisco. I helped open some private wealth offices there.
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  Speaker 1: And I tell a lot of people that are looking
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  Speaker 1: to build careers and finances stay close to the field.
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  Speaker 1: I think some of the challenges that some of the
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  Speaker 1: larger firms have right now is management has not ever
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  Speaker 1: really spent any significant time in the field to really
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  Speaker 1: understand where the rubbery hits the road in terms of,
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  Speaker 1: you know, the advisor client relationship. You know, I've had
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  Speaker 1: the good fortune very my whole career the lens through
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  Speaker 1: which I see the world as I work for advisors.
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  Speaker 1: And I've been fortunate enough that advisors have entrusted me
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  Speaker 1: over the course of my career to be their partner
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  Speaker 1: in their life's work, to help them get new clients,
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  Speaker 1: take care of their best clients, grow their business. Uh.
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  Speaker 1: And that mentality I've brought you to to this new
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  Speaker 1: business here. I was pushed a lot at Smith Warney
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  Speaker 1: and given a lot of responsibility again understanding, you know,
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  Speaker 1: I was homeless kid from from Maine who you know,
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  Speaker 1: was on welfare and food stamps and trying to work
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  Speaker 1: odd jobs and my granddad worked odd jobs to make
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  Speaker 1: ends meet. And now, at the age of twenty seven,
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  Speaker 1: I think five years into my career, I was actually
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  Speaker 1: put in charge of private management, which big responsibility of
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  Speaker 1: introducing the firm's top clients and prospects to Sandy while
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  Speaker 1: and the senior executives in the firm and showcasing, you know,
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  Speaker 1: all of the capability of the organization. Sitting there with
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  Speaker 1: these billionaires and advising them on what to do with
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  Speaker 1: their money. When you know, seven or eight years prior,
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  Speaker 1: I'm standing in line and the sticks of main berry
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  Speaker 1: waiting for a block of government cheese. So pretty profound, uh,
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  Speaker 1: in terms of you know, uh, you know where my
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  Speaker 1: life went in a short period of time. I was
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  Speaker 1: working very hard, you know, seventeen eighteen nineteen hour days
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  Speaker 1: sometimes because I'm reading all night, trying to come up
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  Speaker 1: the learning curve with all these various concepts. And what
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  Speaker 1: I realized early on is that we had remarkable experts
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  Speaker 1: in all the different disciplines of wealth management, whether it
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  Speaker 1: was a state planning, capital markets, investment, banking, asset management,
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  Speaker 1: traditional alternatives, cetera. But we didn't have a lot of
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  Speaker 1: people who understood how they all fit together in the
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  Speaker 1: support of an advisor and in the support of a
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  Speaker 1: large sophisticated client. And that was, you know, over twenty
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  Speaker 1: years ago, the early formation of these wealth management divisions
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  Speaker 1: and then private Wealth Management, and I said, I want
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  Speaker 1: to be the person who is more than conversationally competent
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  Speaker 1: and all of the disciplines and helped tie it together
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  Speaker 1: and that really helped me, you know, grow my career
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  Speaker 1: pretty quickly. So ran Private Wealth, ran the Executive Financial
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  Speaker 1: Services division, which focused on all the firm's top corporate
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  Speaker 1: executive clients. Uh, this is you know in the early
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  Speaker 1: nineties and early two thousands where executive compensation was really
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  Speaker 1: taking off with stock options and that was a big
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  Speaker 1: business for us. So had an opportunity to run that.
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  Speaker 1: And then what I realized is all the firm's top
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  Speaker 1: clients who sat across the table for me and and
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  Speaker 1: all these V I P meetings that we did with them,
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  Speaker 1: for the most part, they were entrepreneurs. And I began
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  Speaker 1: thinking about, how do I go from this side of
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  Speaker 1: the table to that side of the table? How do
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  Speaker 1: I take all of this knowledge and skill set that
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  Speaker 1: had built up around building platforms for leading advisors, UH,
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  Speaker 1: and do it in a way that allows me uh
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  Speaker 1: to be not an employee but an entrepreneur and start
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  Speaker 1: my own business. UH. And that was the realization of
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  Speaker 1: of Dynasty. And when I decided to launch, it was
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  Speaker 1: April of O eight, which in hindsight was both a
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  Speaker 1: very good and bad time UH to launch. We're headed
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  Speaker 1: into obviously, the financial crisis later that year, so it's
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  Speaker 1: very difficult to raise capital. But there was a lot
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  Speaker 1: of challenges that the large Wall Street brands would face
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  Speaker 1: over the next several years. So from a timing perspective,
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  Speaker 1: it worked out really well for this new business model
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  Speaker 1: that we created in launch, which was to provide an
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  Speaker 1: integrated platform service model for high end independent advisors. The
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  Speaker 1: timing was right to bring that on sept to market.
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  Speaker 1: Really interesting. So let's talk a little bit about what
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  Speaker 1: Dynasty does. UM. What are your core services? What's the
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  Speaker 1: short version of of the UM product solution that you offer? Okay, thanks, Barry.
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  Speaker 1: The short version of what Dynasty does. We're in four businesses.
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  Speaker 1: One is a consulting business that advises advisories based upon
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  Speaker 1: where they are in their life cycle. If they want
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  Speaker 1: to launch a business, we help them do that, you know,
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  Speaker 1: breaking away from a wire house, etcetera. If they are
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  Speaker 1: thinking about succession planning, if they're thinking about selling their business,
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  Speaker 1: will help them with those types of things as well.
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  Speaker 1: So that's our consulting business. Our second business is our
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  Speaker 1: core services running all of the middle and back office
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  Speaker 1: for an advisory practice. So technology, compliance, billing, reporting, all
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  Speaker 1: the things that most advisors don't like to do that
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  Speaker 1: freese up their time UH to take care of their
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  Speaker 1: clients and get new ones. They're outsourcing that middle and
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  Speaker 1: back office to us in what we call our core
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  Speaker 1: service package. Third business is our investment platform. Many people
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  Speaker 1: refer to that as you mentioned earlier, the TAMP turnkey. Yes,
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  Speaker 1: that management platform, separate managed account access u M as
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  Speaker 1: advisor as portfolio manager, trading tools, access to alternative managers,
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  Speaker 1: feeder funds, structure products, access and investment banking network that
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  Speaker 1: advisors can refer business to for the business owner, clients, etcetera.
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  Speaker 1: That is an ala carte business. UH. The advisors can
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  Speaker 1: choose to use it or not on behalf of their clients.
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  Speaker 1: And as you reference, we have about twenty seven billion
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  Speaker 1: UH now making us a top six UH tamp uh
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  Speaker 1: in the in the independent space. UH. And then the
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  Speaker 1: last business is our capital business, Dynasty UH Capital Services,
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  Speaker 1: which is both a debt and inequity UH offering to
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  Speaker 1: advisors and oftentimes that capital gets used by advisors looking
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  Speaker 1: to launch a business to fund succession. A lot of
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  Speaker 1: the capital gets deployed if somebody wants to do a
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  Speaker 1: recap kind of practice what they preach, take a few
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  Speaker 1: chips off the table, or if they want to grow
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  Speaker 1: inorganically UH and drive their business by acquiring other advisors.
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  Speaker 1: We have a whole m and a team in house
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  Speaker 1: that will go out source a deal, help get the
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  Speaker 1: deal done, do the transition, the onboarding, and finance that transactions.
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  Speaker 1: What will probably do twenty m and a deals across
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  Speaker 1: the fifty firms or so over the course of this year.
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  Speaker 1: And the last thing I think that's unique that that
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  Speaker 1: people UH sometimes don't understand about our business where that
• 14:47
  Speaker 1: little intel sticker buries. So the advisors own the vast
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  Speaker 1: majority of the equity in their business, if not all
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  Speaker 1: of it, and Dynasty works for them. We are an
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  Speaker 1: integrated service provider that provides all the infash structure and
• 15:00
  Speaker 1: capital consulting in support, but all of the enterprise value
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  Speaker 1: and growth of that which the advisors can monetize and
• 15:07
  Speaker 1: a tax efficient way down the road is owned by
• 15:10
  Speaker 1: the adviser themselves. Very interesting. So, so let's talk about
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  Speaker 1: when you launched, how did you find the first team
• 15:18
  Speaker 1: that joined the platform. Tell us a little bit about
• 15:22
  Speaker 1: what that process was like in the early days when
• 15:27
  Speaker 1: when you're when you're taking that leap of faith and
• 15:29
  Speaker 1: launching a brand new business. Who who comes along at
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  Speaker 1: the very beginning. Yes, so obviously when you're starting a business,
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  Speaker 1: you know, signing up those first few clients is a
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  Speaker 1: bit more difficult than it is today with you know,
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  Speaker 1: sixty billion and a longstanding track record that that we
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  Speaker 1: have our first r I a outside client. UH is
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  Speaker 1: a firm called Pact the Lists there in the DC
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  Speaker 1: market run by a gentleman name Alan Harder. I had
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  Speaker 1: known Alan because he was at Smith Barney, so we
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  Speaker 1: had had a previous relationship, you know, working together there UH,
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  Speaker 1: and he launched his firm a little over ten years ago.
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  Speaker 1: He's had remarkable success growing the business organically and adding
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  Speaker 1: new clients and and and new services. But it was
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  Speaker 1: a tremendous leap of faith. And it's not lost on us.
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  Speaker 1: We we love all our clients obviously, but in particular
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  Speaker 1: those those early clients when we were you know, an
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  Speaker 1: idea of like this new concept and we said, you know,
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  Speaker 1: trust us, we understand it's your life's work. Uh, and
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  Speaker 1: we're going to execute on your behalf. But we're going
• 16:41
  Speaker 1: to jump out this window together and that handshoots gonna
• 16:44
  Speaker 1: go up, and it's gonna work, and you're gonna have
• 16:46
  Speaker 1: that safe and stoff landing. Uh. You know, it was
• 16:50
  Speaker 1: you know, obviously very stressful times with the first five, six,
• 16:54
  Speaker 1: seven transitions, but you know, knock on wood, those aul
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  Speaker 1: went well and they continue to go well since. But
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  Speaker 1: you know, our original you know, first handful of clients
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  Speaker 1: will always have a special place in my heart because
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  Speaker 1: all we were was a business plan, a new concept,
• 17:13
  Speaker 1: and they trusted us that we'd make it work for him,
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  Speaker 1: and thankfully we did. So it's now twelve years later.
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  Speaker 1: How has the process changed? What have you learned over
• 17:24
  Speaker 1: those dozen plus years? How different does that onboarding new
• 17:31
  Speaker 1: advisor relationship look today versus when you were first starting out? Yeah, look,
• 17:36
  Speaker 1: I'm biased when I say this very obviously, but if
• 17:40
  Speaker 1: you talk to a lot of third party players, custodians,
• 17:43
  Speaker 1: et cetera in our space, I think they would say
• 17:45
  Speaker 1: that Dynasty, uh, you know, has the best transition process
• 17:49
  Speaker 1: really of of anyone in the space. We've done it
• 17:52
  Speaker 1: more than anyone. You know, We've onboard it and broke
• 17:55
  Speaker 1: broken away. If you talk about Breakaway advisors over the
• 17:58
  Speaker 1: past you know, just under a dozen years, over a
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  Speaker 1: hundred and fifty you know, significant teams, some of which
• 18:05
  Speaker 1: we help them launch their own firm, some of which
• 18:08
  Speaker 1: we helped tuck in or join or sub aggregate other
• 18:11
  Speaker 1: firms that we that we had on our platform. We
• 18:15
  Speaker 1: do an extensive debrief fund every single one, you know,
• 18:18
  Speaker 1: thinking about how we can get better. And I would say,
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  Speaker 1: like a lot of businesses that are you know, north
• 18:24
  Speaker 1: of ten years in uh. You know, there's a huge
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  Speaker 1: focus on the professionalization of the business. In the early days,
• 18:32
  Speaker 1: you're in startup mode, everyone's kind of doing everything to
• 18:35
  Speaker 1: get clients in and to actually get to a point
• 18:38
  Speaker 1: where you have a business. Uh. And then once you
• 18:41
  Speaker 1: have a business, then it's how do you make that
• 18:43
  Speaker 1: business better? How do you professionalize it? How do you
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  Speaker 1: scale it UH, and we've really focused on the last
• 18:50
  Speaker 1: five years, in particular the technology enabling of all aspects
• 18:55
  Speaker 1: of our business. So if you know to your question,
• 18:58
  Speaker 1: you know what's different today a an advisor who's joining
• 19:02
  Speaker 1: up with us to do a transition. Today there's a
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  Speaker 1: lot more uh digital support, technology support, UH, a lot
• 19:10
  Speaker 1: of practice management around a transition. We have our own
• 19:14
  Speaker 1: proprietary app where we have the hundred and fifty steps
• 19:18
  Speaker 1: that you'll go through in the transition, all laid out
• 19:21
  Speaker 1: in detail, uh, in a password protected app that an
• 19:24
  Speaker 1: advisor would have on his or her phone. And when
• 19:27
  Speaker 1: everything goes from red to green across I mean and
• 19:32
  Speaker 1: we were were the staples easy button. We find your
• 19:34
  Speaker 1: real estate, negotiate the lead, design, your name, your logo,
• 19:37
  Speaker 1: your branding, your marketing, your PR strategy, your launch strategy,
• 19:42
  Speaker 1: helping you on the legal strategy around the move, setting
• 19:45
  Speaker 1: up your client documentation, helping you select your custodian, doing
• 19:50
  Speaker 1: all the paperwork in transition, training your staff on the
• 19:54
  Speaker 1: new TEP like you name it, we do it, uh,
• 19:57
  Speaker 1: and we've done a lot of it. So, like a
• 20:00
  Speaker 1: lot of things in life, UH, there's no substitute, you know,
• 20:03
  Speaker 1: for experience. We have at this point a lot of experience. UH.
• 20:08
  Speaker 1: And we've tech enabled, We've invested, given the success of
• 20:11
  Speaker 1: our business and people UH in the professional development of
• 20:14
  Speaker 1: those people who support the advisors. UH. And perhaps our
• 20:18
  Speaker 1: biggest competitive advantage UH is something that I mentioned earlier
• 20:24
  Speaker 1: is that everyone who works at Dynasty, they're all an
• 20:27
  Speaker 1: equity owner. UH. They either bought equity in the firm
• 20:31
  Speaker 1: or we have a UH and options and equity program.
• 20:34
  Speaker 1: Every single person an owner, So they act like an
• 20:37
  Speaker 1: owner and they wake up every morning and understand that
• 20:39
  Speaker 1: we have one fundamental job, which is to work for
• 20:42
  Speaker 1: and support our advisors. UH. And if a transition doesn't
• 20:45
  Speaker 1: go well, that will set that advisory firm way back,
• 20:49
  Speaker 1: sets us back. We'll get fired, right. The philosophical alignment
• 20:54
  Speaker 1: is the advice. You know, we work for the advisor
• 20:56
  Speaker 1: and the advisor works for the end client. We're comfortable
• 20:59
  Speaker 1: standing and deliver delivering on behalf of our client advisor,
• 21:03
  Speaker 1: just like they have to do for for their client.
• 21:05
  Speaker 1: And I think a lot of ways and this really started,
• 21:09
  Speaker 1: you know, for years ago with some of the old
• 21:12
  Speaker 1: partnerships you know Bury on Wall Street starting to go public.
• 21:15
  Speaker 1: That alignment got misaligned right with shareholders and management and
• 21:21
  Speaker 1: advisors and clients. But we've brought a lot of that
• 21:25
  Speaker 1: purity of the alignment back, which I think, uh culturally
• 21:29
  Speaker 1: is a huge competitive advantage for us. So so last
• 21:33
  Speaker 1: year Investment took a minority share with you, guys. I
• 21:38
  Speaker 1: assume that capital is going to give you some serious
• 21:42
  Speaker 1: firepower to do some things with. What are the plans
• 21:46
  Speaker 1: to to use that that capital um to fund your
• 21:51
  Speaker 1: future growth? Yeah, thanks for that question. I am a
• 21:56
  Speaker 1: very loyal person and maybe it's in part my my background,
• 22:01
  Speaker 1: but you know a lot of the firms that backed
• 22:02
  Speaker 1: us when I was in my garage with the business
• 22:04
  Speaker 1: plan that says a lot. It means a lot to me.
• 22:07
  Speaker 1: And one of those firms was Investment, UH. And you
• 22:11
  Speaker 1: know Judd Bergman, who you know we we all lost
• 22:14
  Speaker 1: too soon, was a very close personal friend of mine,
• 22:19
  Speaker 1: as well as Ed Swinson. You know some of the
• 22:21
  Speaker 1: other co founders here H and Bill Craigor uh longstanding
• 22:25
  Speaker 1: you know, very close personal friend and you know we
• 22:29
  Speaker 1: had talked over the years about finding more ways that
• 22:32
  Speaker 1: we could work together. You know, we utilized some of
• 22:35
  Speaker 1: their technology on on our camp and what we decided
• 22:41
  Speaker 1: to do was to launch something that we're calling the
• 22:44
  Speaker 1: Advisor Services Exchange, which is a joint venture. It's run
• 22:50
  Speaker 1: by Ed Swinson, who's the president of that entity, is
• 22:53
  Speaker 1: also the chief operating officer of Dynasty. Where we're bringing
• 22:58
  Speaker 1: value ad business service is to r as that our
• 23:01
  Speaker 1: current clients of investment, so helping them run more efficient businesses,
• 23:07
  Speaker 1: more tech enabled businesses, helping them outsource things that are
• 23:11
  Speaker 1: not core strategic to their firm, helping them manage their
• 23:14
  Speaker 1: expenses to build more profitable p n l s, which
• 23:18
  Speaker 1: ultimately result in more valuable businesses, etcetera. And we're off.
• 23:22
  Speaker 1: You know, we've launched that about six months ago. We're
• 23:24
  Speaker 1: off to a great start. There's been We built the
• 23:26
  Speaker 1: whole technology interface around data, so the advisors can use
• 23:32
  Speaker 1: the data around their business to make better decisions on
• 23:37
  Speaker 1: how they want to run their business, to do business planning.
• 23:40
  Speaker 1: They can leverage our capital programs, compliance marketing, UH, they
• 23:45
  Speaker 1: can outsource aspects of their investments to us. Again, all
• 23:50
  Speaker 1: designed to create scale and efficiency in the business. The
• 23:53
  Speaker 1: other things that yeah, and and and it's great and
• 23:58
  Speaker 1: it's a fast growing l of of our business because
• 24:02
  Speaker 1: a lot of advisors are looking to outsource the non
• 24:06
  Speaker 1: core things. I mean, the biggest difference very If we
• 24:09
  Speaker 1: were to look at a billion our average r A
• 24:12
  Speaker 1: is about a billion two. If you were to look
• 24:14
  Speaker 1: at a billion to advisor, let's say that we've launched
• 24:16
  Speaker 1: as a breakaway versus the average billion to r i
• 24:20
  Speaker 1: A that's already independent coming to us to outsource on average,
• 24:25
  Speaker 1: which I find fascinating. The advisors that we broke away
• 24:29
  Speaker 1: and stood up on average over five hundred basis points
• 24:32
  Speaker 1: more profitable, and they tend to grow faster. The biggest
• 24:37
  Speaker 1: reason for that, when you really peel back the numbers
• 24:39
  Speaker 1: and do the analysis, is because on average the billion
• 24:43
  Speaker 1: two firm that we set up has three less people.
• 24:46
  Speaker 1: The legacy are a because the custodians are really good
• 24:50
  Speaker 1: in the back office, but don't really do you know,
• 24:52
  Speaker 1: the work in the middle office have had to higher up.
• 24:56
  Speaker 1: When you can get synthetic scale and outsource to a
• 24:59
  Speaker 1: firm like Dynasty, you don't have to hire as many people.
• 25:02
  Speaker 1: And yes, you know with the vendors and the resource
• 25:04
  Speaker 1: partners with sixty billion, we get them a little bit cheaper.
• 25:08
  Speaker 1: But the real delta comes from personnel savings. UH, and
• 25:11
  Speaker 1: then not having to manage those people, which free up
• 25:14
  Speaker 1: more time. And if you assume a multiple of seven
• 25:17
  Speaker 1: or eight times and sometimes higher UH in terms of
• 25:20
  Speaker 1: valuation times five basis points, you can extract late that
• 25:25
  Speaker 1: out to say, the firms on our platform are almost
• 25:27
  Speaker 1: the third more valuable because of the enhanced earnings that
• 25:32
  Speaker 1: we're able to help to help to help drive. So
• 25:36
  Speaker 1: that was a big part, yeah, and that was a
• 25:38
  Speaker 1: big part very why they did the investment. The other piece,
• 25:40
  Speaker 1: real quick is because a lot of the and this
• 25:43
  Speaker 1: gets into our enterprise group, which is servicing institutional clients,
• 25:48
  Speaker 1: a lot of the larger independent broker dealers that investment
• 25:52
  Speaker 1: is servicing. UH. One of the biggest challenges they're facing
• 25:55
  Speaker 1: is their largest advisors are starting to graduate off of
• 25:58
  Speaker 1: their platform and go fully independent and a little bit
• 26:02
  Speaker 1: back to the future here. What you know, I did
• 26:04
  Speaker 1: fifteen years ago helping to build the private wealth division
• 26:07
  Speaker 1: at Smith Barney for that same reason, the top advisors
• 26:10
  Speaker 1: were looking to leave. We had to build a client
• 26:13
  Speaker 1: segmentation strategy, a dedicated firm within a firm for the
• 26:18
  Speaker 1: elite advisors covering the firm's top clients. That's what a
• 26:21
  Speaker 1: private wealth division is You're going to start to see
• 26:24
  Speaker 1: these high end private client or private wealth divisions popping
• 26:28
  Speaker 1: up at the independent broker deal and some of those
• 26:32
  Speaker 1: I believe will decide to outsource that to invest Net
• 26:36
  Speaker 1: and Dynasty because we already have that integrated platform. We
• 26:41
  Speaker 1: you know, we understand and have the DNA around how
• 26:43
  Speaker 1: to develop a private wealth division. So I think you'll
• 26:46
  Speaker 1: see some of that work coming into the market, which
• 26:49
  Speaker 1: is great for us because it's groups of advisors and
• 26:52
  Speaker 1: billions of assets at a time coming on our platform.
• 26:55
  Speaker 1: It will be good for those firms to create a
• 26:57
  Speaker 1: division that an advisor can graduate into as opposed to
• 27:01
  Speaker 1: off of their firm. And it would be great for
• 27:03
  Speaker 1: Investment because you know twenty rule to talk of the
• 27:08
  Speaker 1: advisors at the ibd s have the bulk of the
• 27:11
  Speaker 1: assets and create the revenue, which then obviously flows back
• 27:14
  Speaker 1: to Investment as a technology and asset management partner to
• 27:18
  Speaker 1: those independent broker dealers as well. So it was really
• 27:21
  Speaker 1: those two reasons why they made the investment. We added
• 27:24
  Speaker 1: Bill Cregor to the board, remarkable perspective that he brings
• 27:28
  Speaker 1: from the industry, and it's just been a great partnership.
• 27:32
  Speaker 1: So a number of firms have relocated out of the
• 27:35
  Speaker 1: tri state region towards greener pastures. You moved from New
• 27:42
  Speaker 1: York City to UH St. Petersburg, Florida. Tell us about
• 27:46
  Speaker 1: the motivation for the move. What why exit New York?
• 27:51
  Speaker 1: So we officially moved to St. Petersburg two years ago,
• 27:54
  Speaker 1: but we started the journey on deciding if we were
• 27:59
  Speaker 1: going to move and king at various cities about three
• 28:02
  Speaker 1: years ago. So we spent a full year. I personally
• 28:05
  Speaker 1: made very thirty five trips UH to various cities, primarily
• 28:09
  Speaker 1: up and down the East Coast because it was and Marianne,
• 28:13
  Speaker 1: my wife, went with me, other senior executives. Because when
• 28:17
  Speaker 1: you're asking we have a very diverse leadership team by
• 28:20
  Speaker 1: financial service standards. When you're asking people to make a
• 28:24
  Speaker 1: move out of Manhattan UH and to dislocate, you know,
• 28:28
  Speaker 1: their their family. You want to make sure that you
• 28:30
  Speaker 1: have extreme conviction that it's the right thing for the
• 28:32
  Speaker 1: business and the right thing for the for the team.
• 28:35
  Speaker 1: So you can imagine we took that took that very
• 28:37
  Speaker 1: very serious. UH and ultimately for us, you know, we're
• 28:40
  Speaker 1: middle middle office, back office company. The closer you are
• 28:44
  Speaker 1: to the impliant. Uh, the less large im pressure you have.
• 28:48
  Speaker 1: I mean, advisors are feeling it a little bit, but
• 28:51
  Speaker 1: we feel it more in the middle office. Obviously custodians
• 28:54
  Speaker 1: in the back office feel it even more. But for us,
• 28:57
  Speaker 1: you know, I find that the businesses that do the
• 29:00
  Speaker 1: hard things when things are really good, uh, to put
• 29:04
  Speaker 1: them in a position to win disproportionately when things are
• 29:07
  Speaker 1: more challenging are the ones that win, you know, more
• 29:10
  Speaker 1: disproportionately over the long term. So for us, things are great.
• 29:14
  Speaker 1: This was several years ago. We obviously ended up you know,
• 29:18
  Speaker 1: being a bit lucky in terms of being here when
• 29:22
  Speaker 1: the pandemic hit. But the result is, you know, for
• 29:26
  Speaker 1: us being here very uh seventy percent cheaper real estate,
• 29:30
  Speaker 1: personnel costs or cheaper, which allows us you know, to
• 29:34
  Speaker 1: take those savings build a more profitable business, also make
• 29:37
  Speaker 1: more investments and technology and people uh to service our clients. Uh.
• 29:42
  Speaker 1: The infrastructure that's here is fantastic, uh in terms of
• 29:47
  Speaker 1: the ability to get anywhere with the St. Pede Airport,
• 29:50
  Speaker 1: the Tampa Airport, the quality of life. We found a
• 29:53
  Speaker 1: lot of our employees, you know, retired of commuting an
• 29:56
  Speaker 1: hour and a half and having the ability to walk
• 29:59
  Speaker 1: to work and in St. Pete most walkable city in America.
• 30:03
  Speaker 1: Has great culture here, entertainment, arts, the pro sports team,
• 30:09
  Speaker 1: they seem to win everything in a last a couple
• 30:11
  Speaker 1: of years. I'll take a little credit because that wasn't
• 30:14
  Speaker 1: the case when we first moved here. But it's happened
• 30:16
  Speaker 1: that it's happened since. But I was gonna say it's
• 30:22
  Speaker 1: funny you picked Yeah, I was gonna say it's funny
• 30:24
  Speaker 1: you picked St. Petersburg. Um. I've been spending a week
• 30:29
  Speaker 1: or two each winter down there, and but for the pandemic,
• 30:34
  Speaker 1: we would have been down there for a month or
• 30:36
  Speaker 1: so this year. Um. And and you know, everybody kind
• 30:40
  Speaker 1: of got stuck in place. We weren't going to uh
• 30:44
  Speaker 1: try and do it in the middle of the pandemic.
• 30:46
  Speaker 1: But I find that whole area on the Gulf Coast
• 30:49
  Speaker 1: to be absolutely charming. It's it's a very different headspace
• 30:53
  Speaker 1: than the East coast of Florida, places like Miami or
• 31:00
  Speaker 1: any of the other big cities along Fort Laradale, anything
• 31:02
  Speaker 1: else that's along uh the Atlantic coast. We looked at
• 31:07
  Speaker 1: some of those locations, and you're right, it is. It
• 31:10
  Speaker 1: is charming. We found that the delta in terms of
• 31:13
  Speaker 1: some of the cost savings could be a little bit
• 31:15
  Speaker 1: higher here. But really what cinched it for us is
• 31:19
  Speaker 1: every time I came here, Barry, it felt like I
• 31:22
  Speaker 1: was getting a community bear hug every everyone from you know,
• 31:27
  Speaker 1: the mayor Rick Christman and the economic development team that
• 31:30
  Speaker 1: was here, to multiple ceo s to the owners of
• 31:35
  Speaker 1: the sports teams that are here. Everyone really wanted to
• 31:39
  Speaker 1: partner with us. And you know, Raymond James UH is
• 31:43
  Speaker 1: here and I'm friendly with Paul Riley who runs Raymond
• 31:46
  Speaker 1: James UH. They were very supportive. Uh. Even though we're
• 31:50
  Speaker 1: in finance, we're not obviously directly in their space, which
• 31:53
  Speaker 1: is primarily an employee wealth management business. But the last
• 31:58
  Speaker 1: couple of years, what's interest thing, Raymond James has been
• 32:01
  Speaker 1: one of the top asset gathers in the employee channel
• 32:04
  Speaker 1: and we've been the top asset gather on the independent
• 32:07
  Speaker 1: side in Both of those firms are located in headquartered
• 32:11
  Speaker 1: in St. Petersburg, So that to me really highlights the
• 32:15
  Speaker 1: you know where we are now as an industry with technology,
• 32:19
  Speaker 1: availability of talent, product access, you know, you can really
• 32:23
  Speaker 1: build a large scale, successful business in finance anywhere in
• 32:28
  Speaker 1: the country. And I would say the last plug for St.
• 32:31
  Speaker 1: Pete to your earlier point, I think over the next
• 32:34
  Speaker 1: ten years, one of the hottest cities, fastest growing, where
• 32:38
  Speaker 1: you're going to see remarkable uh, you know, economic development
• 32:42
  Speaker 1: in technology, finance, UH, in other key industries is right
• 32:47
  Speaker 1: here in St. Pete. So I would encouraging any business
• 32:50
  Speaker 1: owner that is looking at this part of the country
• 32:52
  Speaker 1: to look at St. Pete because there's some pretty remarkable
• 32:54
  Speaker 1: things happening here. So so you're kind of pointing at
• 32:58
  Speaker 1: at something that I think is the one of the
• 33:01
  Speaker 1: takeaway lessons from the pandemic. But let me ask it
• 33:05
  Speaker 1: to you this way. What what lessons have the pandemic
• 33:10
  Speaker 1: taught you about running a firm remotely? And does this
• 33:15
  Speaker 1: give wirehouse advisors an even greater incentive to depart? Well,
• 33:22
  Speaker 1: great questions. So I would say, you know, to the
• 33:25
  Speaker 1: first piece, UH, you know, we support advisors, and I
• 33:28
  Speaker 1: think what our advisors learned is that being a proximate
• 33:33
  Speaker 1: and over communicating uh and proactive. I mean, this was
• 33:38
  Speaker 1: the over the past year, Barry, it's been the advisor
• 33:41
  Speaker 1: super Bowl, UH. And and those that that have done
• 33:45
  Speaker 1: those things are growing fast. I mean it's you know,
• 33:49
  Speaker 1: one of the one of the rare times when literally
• 33:51
  Speaker 1: everyone wants to talk to a financial advisor, UH, and
• 33:54
  Speaker 1: those that took advantage of that opportunity, and we have
• 33:58
  Speaker 1: just seen remarkable organic growth of the firms that we
• 34:01
  Speaker 1: support in terms of our business and the home office
• 34:05
  Speaker 1: that's supporting the the advisors means similarly, you know, the
• 34:09
  Speaker 1: importance of over communication, being proximate with our clients has
• 34:14
  Speaker 1: been critical. Some of the challenges that we've seen, UH
• 34:19
  Speaker 1: is around hiring new people. Training. The onboarding is challenging
• 34:24
  Speaker 1: in this environment. I mean, we have some employees that
• 34:26
  Speaker 1: have gone six months that are new team members that
• 34:29
  Speaker 1: haven't had the chance to meet you know, the broader
• 34:32
  Speaker 1: team members. UH. Culture, which is so important within a business,
• 34:37
  Speaker 1: is very difficult to to to drive I find remotely
• 34:42
  Speaker 1: UH efficiency sometimes. I mean there's no substitute to walking
• 34:45
  Speaker 1: around the corner and tapping a colleague, you know, on
• 34:48
  Speaker 1: the shoulder and saying, hey, how do I do this?
• 34:50
  Speaker 1: Or what do you think here? You know, now it's
• 34:52
  Speaker 1: an email or you know, a zoom call and maybe
• 34:56
  Speaker 1: the person is not immediately available. So some of those
• 34:59
  Speaker 1: things are a little bit more challenging, but I think
• 35:02
  Speaker 1: they'll get worked out as businesses get back into you know,
• 35:05
  Speaker 1: maybe a hybrid or what I call sometimes the styborg
• 35:08
  Speaker 1: ing of the business, which is leveraging technology with the
• 35:12
  Speaker 1: with the human element. I think we'll end in a
• 35:15
  Speaker 1: place where it's one plus one equin three. Uh to
• 35:18
  Speaker 1: the question about advisors breaking away, without question, our business
• 35:23
  Speaker 1: is springloaded right now. Uh, we're going to have uh,
• 35:28
  Speaker 1: just a fantastic U two thousand twenty one, in large
• 35:32
  Speaker 1: part because the breakaway advisor movement is accelerating, a lot
• 35:35
  Speaker 1: of advisors historically in wire houses have thought that a
• 35:39
  Speaker 1: big part of what they give up for the of
• 35:41
  Speaker 1: the revenue that they give to the wirehouse, a big
• 35:44
  Speaker 1: part of that value is real estate, which they're now
• 35:47
  Speaker 1: not getting, and they've now realized that they don't need
• 35:50
  Speaker 1: that real estate as part of the servicing infrastructure to
• 35:54
  Speaker 1: their clients. Uh. They also have more free time because
• 35:58
  Speaker 1: they're not in the office. They can explore independence, or
• 36:02
  Speaker 1: explore move and get educated. So the combination of those things,
• 36:06
  Speaker 1: having more time to stick their head up and look
• 36:09
  Speaker 1: around and explore, and realizing that they don't need to
• 36:12
  Speaker 1: give up their revenue, advisors that we support give up
• 36:16
  Speaker 1: fifteen one five not five zero, and you know they've
• 36:21
  Speaker 1: got something. If they want to have a small office,
• 36:23
  Speaker 1: they can. But the average advisor on our platform is
• 36:27
  Speaker 1: doing you know, mid sixties the high sixties in terms
• 36:30
  Speaker 1: of gross income, which is almost more from an income
• 36:34
  Speaker 1: standpoint on what they were receiving at a wirehouse. Uh.
• 36:38
  Speaker 1: And you know, the path to independence has become more
• 36:42
  Speaker 1: well warrant at this point. Uh. They want to look
• 36:46
  Speaker 1: peer to peer and have those conversations. Success breeds more success.
• 36:50
  Speaker 1: So what we're finding, you know, very in light of
• 36:53
  Speaker 1: this environment, it's only accelerating the movement towards independence. Quite interesting.
• 36:59
  Speaker 1: Let's talk a little bit about the growth of the industry.
• 37:03
  Speaker 1: You're now over sixty billion dollars on your platform between
• 37:08
  Speaker 1: Tampa and enterprise and advisor assets. How do you grow
• 37:11
  Speaker 1: that to a hundred billion dollars in a u M.
• 37:15
  Speaker 1: It's organic growth helping our advisors get new clients. Uh.
• 37:19
  Speaker 1: And you know, maybe you've seen, uh, you know, in
• 37:22
  Speaker 1: the past multiple months, over the past year, we've started
• 37:26
  Speaker 1: to sponsor, in particular a lot of local trying to
• 37:28
  Speaker 1: support some of the local athletes. UH in golf and
• 37:32
  Speaker 1: IndyCar racing and tennis h to help get you know,
• 37:36
  Speaker 1: the brand awareness out there more. We have a lot
• 37:40
  Speaker 1: more of of of that activity become. That has led
• 37:43
  Speaker 1: to referrals that we can make out to our advisors,
• 37:47
  Speaker 1: and I think about us really becoming over the next
• 37:50
  Speaker 1: five years in part the Good Housekeeper Seal of approval
• 37:54
  Speaker 1: for independent advices. So if you're looking for an independent advisor,
• 37:59
  Speaker 1: look for one that's word by Dynasty right, because here's
• 38:02
  Speaker 1: all the buying power and support and technology that they have,
• 38:07
  Speaker 1: and I think Dynasty can can become a much bigger
• 38:09
  Speaker 1: part helping our advisors grow organically. Second part of our
• 38:15
  Speaker 1: growth will come inorganically, meaning helping our advisors grow via
• 38:21
  Speaker 1: M and A, whether it's retiring our A A principles
• 38:26
  Speaker 1: that are looking to monetize their business, whether it's breakaway
• 38:30
  Speaker 1: advisors who want all the benefits of independence, but maybe
• 38:33
  Speaker 1: don't want to run their own business and they want
• 38:35
  Speaker 1: to join an independent firm. UH. That will continue to
• 38:39
  Speaker 1: become an even larger part of our business and our growth.
• 38:43
  Speaker 1: Because of our fifty firms, I would say more than
• 38:47
  Speaker 1: half of them now are M and A ready, and
• 38:50
  Speaker 1: we've invested heavily in investment banking team in house. We've
• 38:54
  Speaker 1: reserved a lot of our capital and balance sheet to
• 38:57
  Speaker 1: help finance those transactions. So I think a lot of that,
• 39:00
  Speaker 1: as I said, we'll accelerate. And then, obviously the third
• 39:03
  Speaker 1: is new store sales. In thinking about adding a dozen
• 39:08
  Speaker 1: or so new brands that are powered by Dynasty, whether
• 39:12
  Speaker 1: they were already independent firms that are looking to outsource
• 39:15
  Speaker 1: to us, or they're coming from you know, captivity or
• 39:19
  Speaker 1: an employee model and looking you know, to to own
• 39:23
  Speaker 1: and operate their own firm. Our flows are very strong
• 39:27
  Speaker 1: in that regard, so those will be the primary drivers.
• 39:30
  Speaker 1: And then the new business, as we've mentioned that's coming
• 39:32
  Speaker 1: on is the enterprise business, and I think selectively, you know,
• 39:36
  Speaker 1: you'll see a few firms. An example of that would
• 39:39
  Speaker 1: would be a Mariner, which is a thirty five billion
• 39:42
  Speaker 1: dollar r A run by Marty Bicknell, who I think
• 39:46
  Speaker 1: is a great CEO in the r A A space,
• 39:50
  Speaker 1: decided he wanted to have a platform affiliate model where
• 39:53
  Speaker 1: advisors that didn't want to sell the Mariner could get
• 39:56
  Speaker 1: all the benefits of the investment acumen and practice management
• 40:01
  Speaker 1: UH coaching support of Mariner UH and then Dynasty's turnkey
• 40:06
  Speaker 1: platform supports that. Uh. You know, we're getting hundreds of
• 40:10
  Speaker 1: referrals on our website a month. A lot of these
• 40:13
  Speaker 1: advisors are you know, fifty undred million. Uh. Many of
• 40:18
  Speaker 1: them don't want to sell. So we have now a
• 40:21
  Speaker 1: channel partnership with Mariner where the advisor can go get
• 40:26
  Speaker 1: the benefit of our platform, get the benefit of the
• 40:29
  Speaker 1: support of Mariner, and not have to sell their business today.
• 40:33
  Speaker 1: So you'll see us selectively enter into those types of partnerships,
• 40:38
  Speaker 1: maybe support some of the larger independent broker dealers, standing
• 40:41
  Speaker 1: up a private wealth division, so selectively onboarding some of
• 40:45
  Speaker 1: these institutional clients, and you add all that together. UM,
• 40:50
  Speaker 1: I'll stick my neck out here a little bit, you know,
• 40:52
  Speaker 1: bury here on the show to say I'd like to
• 40:54
  Speaker 1: see us inside of twenty four months cross over the
• 40:58
  Speaker 1: hundred billion dollar mark. Well, that's that's a big number.
• 41:02
  Speaker 1: So so let me flip the question on you, Um,
• 41:05
  Speaker 1: what are wire houses doing to try and retain their
• 41:08
  Speaker 1: top talent? They have to be aware of it's not
• 41:13
  Speaker 1: just you, it's places like Hi Tower and LPL that
• 41:17
  Speaker 1: are attracting, um, a whole lot of talent from them.
• 41:21
  Speaker 1: What can they do to staunch the bleeding. Well, look,
• 41:27
  Speaker 1: our biggest competitor, frankly is inertia and complacency. And as
• 41:34
  Speaker 1: you know in lots of walks of life, good is
• 41:38
  Speaker 1: the enemy of great uh. And a lot of the advisors,
• 41:41
  Speaker 1: you know, they've worked hard to build their book of business. UH,
• 41:44
  Speaker 1: and they don't want, you know, to to go through
• 41:47
  Speaker 1: the noth hole of a transition, you know, which is
• 41:49
  Speaker 1: ninety days of of of of work uh to then
• 41:53
  Speaker 1: get on you know, the other side and and have
• 41:55
  Speaker 1: their business. So you know, for us, typically a loss
• 41:59
  Speaker 1: would be that we spent six months educating somebody and
• 42:03
  Speaker 1: they just made a decision not to move. It's rare
• 42:06
  Speaker 1: that we would dig in with somebody and they would
• 42:08
  Speaker 1: move and not do it with us in the R
• 42:11
  Speaker 1: A A space because you know, most of the advisors
• 42:14
  Speaker 1: want a supported independent model. They don't want to have
• 42:18
  Speaker 1: to hire all the people, and they don't want to
• 42:20
  Speaker 1: juggle sixty five different vendor balls. Uh. You know, so
• 42:23
  Speaker 1: they decided to partner with us. What the wirehouses are
• 42:27
  Speaker 1: trying to do, UH is you know, to put these
• 42:30
  Speaker 1: retiring place programs in place, which takes advantage of inertia.
• 42:35
  Speaker 1: Reality is if an advisor goes independent, Uh, they would
• 42:38
  Speaker 1: make a lot more money both in terms of income,
• 42:40
  Speaker 1: they could decide when they want to retire if they
• 42:43
  Speaker 1: sell their business as long term capital gains tax and
• 42:47
  Speaker 1: a higher valuation. But many advisors just you know, take
• 42:51
  Speaker 1: the easier path, which is to stay. I'll stay here
• 42:54
  Speaker 1: as a three month or now it's all W two income.
• 42:57
  Speaker 1: But it's easier. Uh So why our houses again understand Uh,
• 43:02
  Speaker 1: you know, the inertia and complacency is on their side,
• 43:06
  Speaker 1: so they're putting those programs in place. I think what
• 43:09
  Speaker 1: they're also doing smartly, and advisors are allowing it to happen,
• 43:14
  Speaker 1: is to push forward their brand more directly to the client.
• 43:19
  Speaker 1: You see this at you know, merrow with merrow Ledge.
• 43:22
  Speaker 1: You see you know a lot of the smaller accounts
• 43:24
  Speaker 1: solutions being rolled out at these firms, which is the
• 43:28
  Speaker 1: institutionalizing of the client relationship, so the client has more
• 43:32
  Speaker 1: relationship with the brand as opposed to the advisor. And
• 43:36
  Speaker 1: I think grap accounts, checking accounts, loans, all those things.
• 43:40
  Speaker 1: So you cross sell them with multiple products and then
• 43:44
  Speaker 1: you put them into models that the firm is running,
• 43:47
  Speaker 1: not the advisor. Uh. And then it becomes a deterrent
• 43:51
  Speaker 1: for the advisors to leave because a lot of their clients.
• 43:54
  Speaker 1: You see it at firms like Goldman and others where
• 43:57
  Speaker 1: you have typically a lower uh acentage of client assets
• 44:01
  Speaker 1: that follow when the advisor leaves, because the client tends
• 44:04
  Speaker 1: to have more of a relationship with the brand as
• 44:07
  Speaker 1: opposed to some of the firms where it's just the
• 44:10
  Speaker 1: relationship with the advisor. I think the wire houses are
• 44:13
  Speaker 1: are strategically trying to do more of that, whether it's
• 44:16
  Speaker 1: tying them in with loan products, structure products, things that
• 44:20
  Speaker 1: are proprietary to the firm. It's about driving the brand
• 44:24
  Speaker 1: and creating stickiness. And I think ultimately, you know, over
• 44:27
  Speaker 1: the next five years or so, you'll see the wire
• 44:29
  Speaker 1: houses looking and feeling more like a private bank where
• 44:33
  Speaker 1: the advisor is more of a clear employee uh and
• 44:38
  Speaker 1: you know, they're helping to cross sell the relationship across
• 44:41
  Speaker 1: the organization and it would become more difficult in that
• 44:45
  Speaker 1: environment for an advisor to to to make a move.
• 44:48
  Speaker 1: So I think I think that's really the strategy that
• 44:51
  Speaker 1: you're seeing be be deployed. Longer term, perhaps you could
• 44:57
  Speaker 1: see some of these firms open up product access us,
• 45:00
  Speaker 1: maybe even eventually custody to independent advisors. But that business
• 45:05
  Speaker 1: is such a scale business, and you have firms like
• 45:08
  Speaker 1: Schwab that have you know, North the three trillion already
• 45:12
  Speaker 1: clearly a big lead Fidelity, you know, you know, well
• 45:15
  Speaker 1: north of a trillion. Pershing's a scale player in that space.
• 45:19
  Speaker 1: It's very difficult to have an employee model supporting advisors
• 45:23
  Speaker 1: and an independent model supporting advisors when your subscale in
• 45:28
  Speaker 1: the ladder. So I think it will be a slow
• 45:31
  Speaker 1: migration and probably more about product distribution to arias than
• 45:36
  Speaker 1: it will be turn key custody for most of those platforms.
• 45:40
  Speaker 1: Very interesting that there's a quote of yours I really
• 45:44
  Speaker 1: enjoy and I want to have you put some color
• 45:48
  Speaker 1: on it. Quote the amount of innovation in the last
• 45:51
  Speaker 1: five years is greater than the fifty that proceeded that
• 45:57
  Speaker 1: unquote give us a little more explanation, you know, are
• 46:00
  Speaker 1: you talking generally technology, financial innovation. I don't disagree with
• 46:06
  Speaker 1: any of that. I'm curious as to to your thoughts
• 46:09
  Speaker 1: on it. Yeah, Look, the reality is the whole independent space,
• 46:15
  Speaker 1: the independent movement. At this point, it's been discovered and
• 46:19
  Speaker 1: you see it. If you're an r A you decided
• 46:21
  Speaker 1: to sell, there's twenty potential buyers that show up on
• 46:25
  Speaker 1: the other side. I mean, it's just a wonderful business
• 46:28
  Speaker 1: that's anwitized essential to our country. It's not going away.
• 46:34
  Speaker 1: Um So, so all roads are starting to lead towards
• 46:37
  Speaker 1: the r A space. And what that means is the
• 46:41
  Speaker 1: capital investment that's coming in, the attention that's being paid,
• 46:46
  Speaker 1: is you're seeing tremendous innovation across the board. So yes,
• 46:50
  Speaker 1: in technology, in reporting technology, in o CFO technology, in
• 46:57
  Speaker 1: O c I O technology, and compliance technology basically all
• 47:02
  Speaker 1: aspects of an advisory practice. And when you're in the
• 47:06
  Speaker 1: independent space, Barry and you don't have to worry about uh,
• 47:09
  Speaker 1: you know, having fifty years of legacy technology that you
• 47:14
  Speaker 1: can only incrementally move the needle with. But when we
• 47:18
  Speaker 1: launch an r A, we're building from scratch custom technology
• 47:21
  Speaker 1: to specifically fit the need of the way they want
• 47:24
  Speaker 1: to service the clients. That's a huge advantage for them.
• 47:27
  Speaker 1: On the product side, you know, whether it's you know,
• 47:30
  Speaker 1: partners now like I capital and the access to alternatives
• 47:34
  Speaker 1: that really started in the independent space, or halo on
• 47:38
  Speaker 1: the structured product front, or you know, what investment has
• 47:42
  Speaker 1: done to bring scale, you know, into the into the
• 47:45
  Speaker 1: tamp and reporting and financial planning space. So many of
• 47:49
  Speaker 1: those firms started on the independent side, and now you
• 47:52
  Speaker 1: have wirehouses and banks trying to leverage that technology that
• 47:57
  Speaker 1: started here, right. So the space has kind of turned
• 48:00
  Speaker 1: earned upside down and then you pour on top of it,
• 48:03
  Speaker 1: you know, kind of the gas on the fire, which
• 48:05
  Speaker 1: is tremendous capital investment. Uh. And the entrepreneurship. I mean,
• 48:11
  Speaker 1: one of our biggest advantages is we are entrepreneurs servicing
• 48:15
  Speaker 1: other entrepreneurs, right, so we're getting up every day and
• 48:19
  Speaker 1: thinking about innovation and how do we make the advisor's
• 48:22
  Speaker 1: life better. And the whole ecosystem that's evolved over the
• 48:27
  Speaker 1: last ten years. Right, it's driven by entrepreneurs who have
• 48:32
  Speaker 1: great access to technology and capital that are fundamentally changing
• 48:36
  Speaker 1: the way that what wealth managements being delivered in this country.
• 48:40
  Speaker 1: And I think, frankly, you know, it's just going to
• 48:42
  Speaker 1: continue to accelerate. Really interesting you mentioned scale, uh I.
• 48:47
  Speaker 1: It reminds me of the issue of market share. It's
• 48:50
  Speaker 1: been pointed out a handful of the largest r I
• 48:55
  Speaker 1: A s are hundred billion plus when the industry is
• 48:59
  Speaker 1: measure in tens of trillions of dollars, meaning even the
• 49:04
  Speaker 1: biggest firms barely have any sort of market share. Does
• 49:08
  Speaker 1: that mean anything? Is there any significance to how widely
• 49:12
  Speaker 1: diversified and distributed the industry itself is? Well, Look, I
• 49:18
  Speaker 1: do think that there will be brands that evolved on
• 49:20
  Speaker 1: the national level, regional level within the r A A
• 49:24
  Speaker 1: space that will have real brand value. In Dynasty hopes
• 49:29
  Speaker 1: to be again that intel sticker powering a number of
• 49:32
  Speaker 1: those national scaled winners and helping to provide a lot
• 49:36
  Speaker 1: of the scale and access that uh, that that supports them.
• 49:41
  Speaker 1: But the reality is when you look at, you know,
• 49:43
  Speaker 1: the economics of the wealth management business, A lot of
• 49:47
  Speaker 1: people talk about, you know, the margin and margin pressure
• 49:50
  Speaker 1: that's happened in the industry. But when you look at
• 49:53
  Speaker 1: the last ten years, uh, that has occurred, but but
• 49:57
  Speaker 1: in a different way than what most people describe it.
• 50:00
  Speaker 1: What I mean by that is, we looked at the
• 50:03
  Speaker 1: average and client on our platform is let's say about
• 50:07
  Speaker 1: five million dollars. The average client is being advised by
• 50:10
  Speaker 1: one of the advisors. Ten years ago, the r o
• 50:14
  Speaker 1: A on average on our platform for that five million
• 50:17
  Speaker 1: dollar client was around seventy eight basis points today, Uh,
• 50:23
  Speaker 1: it's seventy So you've had three or four basis points
• 50:29
  Speaker 1: of erosion in terms of margin pressure. But the big
• 50:32
  Speaker 1: change is the cost the service. Ten years ago, the
• 50:37
  Speaker 1: client expectation might have been very simplistic financial plan uh,
• 50:41
  Speaker 1: and it's really an asset management relationship. Today it's more
• 50:46
  Speaker 1: holistic wealth management. It's it's integrated financial planning. Uh. It's
• 50:50
  Speaker 1: looking at the liability side of the balance sheet alongside
• 50:53
  Speaker 1: of the asset side. Uh. You know, it's looking at
• 50:56
  Speaker 1: overall risk management. It's incorporation of alternative investments, you know,
• 51:01
  Speaker 1: alongside of traditional etcetera, etcetera. So the team investment, the
• 51:07
  Speaker 1: technology investment, you know, what it costs to service that
• 51:12
  Speaker 1: client has gone up. So the margin pressure actually is
• 51:17
  Speaker 1: coming faster on the cost side than it is on
• 51:21
  Speaker 1: the revenue side. And that's where scale matters. That's where
• 51:26
  Speaker 1: these large, multibillion dollar independent firms have higher profitability because
• 51:34
  Speaker 1: they're able to spread the cost infrastructure over more client.
• 51:38
  Speaker 1: That's why outsourcing to firms like Dynasty is accelerating because
• 51:43
  Speaker 1: you can get synthetic scale. And then the last part
• 51:46
  Speaker 1: of the competitive advantage is marketing and dollars that you're
• 51:51
  Speaker 1: able to spend on sales, whether it's adding a new
• 51:53
  Speaker 1: client or adding a new advisor. The larger and more
• 51:56
  Speaker 1: scale you have, the more free cash flow you have
• 51:59
  Speaker 1: to make those investment and that's why the biggest firms
• 52:02
  Speaker 1: are the ones that you tend to see growing the fastest.
• 52:05
  Speaker 1: Right now. So so let's talk about some of the
• 52:08
  Speaker 1: biggest firms. People have compared Dynasty to firms like High
• 52:13
  Speaker 1: Tower or LPL. Who are do you think of as
• 52:19
  Speaker 1: as your competitors, um and and what are the similarities
• 52:23
  Speaker 1: and differences between them? Sure? Look you know this. Uh,
• 52:28
  Speaker 1: it's lonely at the top sometimes. Uh. And the result is,
• 52:33
  Speaker 1: you know, the space tends to be pretty small. So
• 52:35
  Speaker 1: I know the CEO is the most all of these
• 52:38
  Speaker 1: firms in the space, and we get together from time
• 52:41
  Speaker 1: to time and we we share a laugh, whether it's
• 52:44
  Speaker 1: about a certain reporter or you know where the industry
• 52:48
  Speaker 1: is going. Uh. The reality is, you know, the people
• 52:51
  Speaker 1: at the tops of the organization, you know, from a
• 52:54
  Speaker 1: peer to peer practice management perspectives, spent some time together,
• 52:57
  Speaker 1: and in particular, Barry, I have a lot of respect
• 53:00
  Speaker 1: for the other entrepreneurs that have gone out there. Uh
• 53:04
  Speaker 1: and you know, bet on themselves and you know, trying
• 53:07
  Speaker 1: to execute a new model. Uh. In terms of competition, uh,
• 53:12
  Speaker 1: there's a lot. I'm only forty four years old. I
• 53:15
  Speaker 1: was thirty two when I decided to start the business.
• 53:18
  Speaker 1: I'm gonna be doing this for a while. And it's
• 53:20
  Speaker 1: a lot of fun for me to be a mentor to. Frankly,
• 53:23
  Speaker 1: a lot of these players coming in space. You know,
• 53:25
  Speaker 1: these are firms being started by people that are still
• 53:27
  Speaker 1: older than me. Even though I'm seen as one of
• 53:30
  Speaker 1: the original, you know, visionaries, and in the space, I'm
• 53:35
  Speaker 1: still only forty four. So it's nice for me to
• 53:38
  Speaker 1: be able to mentor so many people coming in. I
• 53:42
  Speaker 1: don't see anyone today as a scaled integrated platform, Uh,
• 53:49
  Speaker 1: competitor to the high end r a A. We invented that.
• 53:52
  Speaker 1: We created that space sixty billion, as I said, a
• 53:56
  Speaker 1: hundred billion here in the in the near term. Uh.
• 53:59
  Speaker 1: When not complacent, only the paranoid survive. Uh. So we're
• 54:04
  Speaker 1: constantly watching what others are doing. But in the space
• 54:08
  Speaker 1: where we sit today, I think we sit alone. Now.
• 54:11
  Speaker 1: You mentioned firms, Uh, you know some of these roll ups,
• 54:15
  Speaker 1: some of them have come in and out of the
• 54:17
  Speaker 1: platform business. But as I mentioned earlier, UM, I tell
• 54:21
  Speaker 1: entrepreneurs you've got to be laser focused. It's very difficult
• 54:24
  Speaker 1: to do one thing incredibly well. It's impossible to do
• 54:27
  Speaker 1: several things well. So if you want to be a
• 54:29
  Speaker 1: roll up in an acquire of businesses, do that. Don't
• 54:32
  Speaker 1: try to be a platform service company as well, right,
• 54:36
  Speaker 1: especially if you only have sub a hundred billions. I
• 54:39
  Speaker 1: mean there are players out there with with with half
• 54:42
  Speaker 1: a trillion that can't do it, that are trying to
• 54:44
  Speaker 1: build different types of models and there's still subscale. So
• 54:47
  Speaker 1: for us, we've been laser focused on just supporting advisors,
• 54:52
  Speaker 1: being a platform company and staying in in that in
• 54:55
  Speaker 1: that swim lane. Uh. And there's really no one else
• 54:57
  Speaker 1: that's doing that inertia if tisor is not leaving big competitor. Uh.
• 55:02
  Speaker 1: You mentioned LPL. There's a lot of independent broker dealers
• 55:05
  Speaker 1: that are trying to figure out how they reinvent themselves
• 55:08
  Speaker 1: as an advisory firm. How do they become an r
• 55:11
  Speaker 1: A custodian, how do they attract more advisor assets, how
• 55:16
  Speaker 1: do they build tamp capabilities? So a lot of if
• 55:20
  Speaker 1: you think about where you know, we're in twenty different
• 55:22
  Speaker 1: businesses that we just integrated into a platform. A lot
• 55:25
  Speaker 1: of our individual businesses may have competition, but we're still
• 55:31
  Speaker 1: the only fully integrated offering at the high end of
• 55:34
  Speaker 1: the model. And the last thing I think that I
• 55:36
  Speaker 1: would mention that they haven't mentioned yet that the competitive
• 55:38
  Speaker 1: advantage is our community. And I would say, look, you know,
• 55:42
  Speaker 1: winners want to surround themselves with other winners. Uh. There
• 55:45
  Speaker 1: really isn't a community where the average CEO and principle
• 55:50
  Speaker 1: is a billion dollar plus are a A Uh, they're geographical,
• 55:54
  Speaker 1: disperse all of the countries, they don't really compete with
• 55:56
  Speaker 1: each other where they can get together several times a
• 55:59
  Speaker 1: year at our event and share a peer peer on
• 56:02
  Speaker 1: what's working, best practices, what isn't working on various growth strategies,
• 56:07
  Speaker 1: on brand development, on staffing. Uh. So, you know, our community,
• 56:12
  Speaker 1: I think is a is a very powerful differentiator because
• 56:16
  Speaker 1: I think you're defined not just by who you service,
• 56:19
  Speaker 1: but also who you don't. And for Dynasty, you know,
• 56:23
  Speaker 1: thinking about our clients, we're not trying to be something
• 56:25
  Speaker 1: to everyone. We're trying to be everything to someone and
• 56:29
  Speaker 1: that's the someone that really plays behind the market that
• 56:32
  Speaker 1: wants a partner, is focused on building a great business,
• 56:36
  Speaker 1: not just a great practice, really wants to drive enterprise
• 56:39
  Speaker 1: value and wants to have a sustained business over time.
• 56:42
  Speaker 1: That's our core focused client. Huh sounds sounds quite intriguing.
• 56:47
  Speaker 1: I know we only have you for a couple of
• 56:49
  Speaker 1: more minutes, So let me jump to my favorite questions
• 56:52
  Speaker 1: that we ask all of our guests, starting with what's
• 56:56
  Speaker 1: keeping you entertained during this work from home period? Tell
• 57:00
  Speaker 1: us what your favorite Netflix or Amazon Prime shows are
• 57:04
  Speaker 1: or what podcasts you're listening to. Yeah, so in terms
• 57:08
  Speaker 1: of uh, the little bit of of time I have
• 57:11
  Speaker 1: away from away from work as far as shows and podcasts, Um,
• 57:16
  Speaker 1: you know, Barry, I've never been one to watch a
• 57:18
  Speaker 1: lot of television, to be honest with you, Um, I
• 57:21
  Speaker 1: do watch sports, uh you know, from from time to
• 57:24
  Speaker 1: time and and follow my favorite teams. But I do
• 57:27
  Speaker 1: listen to podcasts. I'll give you a nice compliment and
• 57:31
  Speaker 1: plug Masters of Business is definitely one of my one
• 57:36
  Speaker 1: of my favorite podcasts. I do listen to Jocko will
• 57:40
  Speaker 1: It's uh podcast. My wife and I are big supporters
• 57:45
  Speaker 1: of military. Jocko obviously is the former Navy skill. But
• 57:49
  Speaker 1: some of his uh you know, shows around leadership and
• 57:52
  Speaker 1: overcoming adversity. Uh. You know, I've really enjoyed those. I
• 57:57
  Speaker 1: am a fellow at the Aspen Institute in their Finance
• 58:00
  Speaker 1: Fellowship program. I really like, uh the Aspen Ideas to
• 58:05
  Speaker 1: Go podcast. Uh. You know, there are some quick hits
• 58:10
  Speaker 1: on various uh interesting ideas leadership, entrepreneurship, etcetera. Uh. And
• 58:17
  Speaker 1: you know Ted talks uh from time to time or
• 58:21
  Speaker 1: are things that I'll take in when I'm taking a
• 58:23
  Speaker 1: long walk, you know here in St. Pete. But I'm
• 58:26
  Speaker 1: more of a podcast person, honestly than somebody who is
• 58:31
  Speaker 1: watching Netflix or Amazon Prime. Gotcha. So let's talk about
• 58:36
  Speaker 1: some of your early mentors who helped to shape your career.
• 58:42
  Speaker 1: In terms of my most early mentor without questions, my
• 58:45
  Speaker 1: step grandfather who raised me. His name was Clarence Townsend.
• 58:49
  Speaker 1: Both of my daughters are named after him. My older daughter,
• 58:53
  Speaker 1: her name is Townsend, and our younger one is a Claire.
• 58:56
  Speaker 1: The Claire is from Clarence. As they say, we're named
• 58:58
  Speaker 1: after one of our angels. Uh. He taught me the
• 59:02
  Speaker 1: importance of doing what you say, integrity, being honest. He
• 59:06
  Speaker 1: never borrowed a dollar in his life, so disappointed around
• 59:10
  Speaker 1: not spending more than you can afford. A lot of
• 59:13
  Speaker 1: that obviously was very helpful to me, as I said,
• 59:18
  Speaker 1: when I was starting a business and remembering a lot
• 59:21
  Speaker 1: of those life lessons that I've learned from him. On
• 59:24
  Speaker 1: the entrepreneur side, one of my best friends is a
• 59:27
  Speaker 1: guy named Mike Rappoli. Uh. Your listeners will probably know
• 59:32
  Speaker 1: the name. Mike was one of the founders of Vitamin Water. Uh.
• 59:35
  Speaker 1: He helped build other brands like kind Bar and Pirate's Booty,
• 59:40
  Speaker 1: which he didn't found, and then he went on to
• 59:42
  Speaker 1: found now body Armor. Very few entrepreneurs have ever founded
• 59:47
  Speaker 1: a billion dollar brand from the ground up, even fewer
• 59:50
  Speaker 1: number have done it more than once, and Body Armor
• 59:53
  Speaker 1: certainly a multibillion dollar brand at this point, as was
• 59:57
  Speaker 1: Viamin Water. So early on when I was to launch
• 1:00:00
  Speaker 1: this business, Mike was a remarkable sounding board. He and
• 1:00:04
  Speaker 1: I actually named Dynasty together, which we thought about it.
• 1:00:08
  Speaker 1: We both sports guys, so we thought about it meaning
• 1:00:11
  Speaker 1: winning consistently over time. Multi Generational financial obviously describes the
• 1:00:16
  Speaker 1: industry and partners in terms of how we work with
• 1:00:19
  Speaker 1: our clients and our resource partners and relate to each
• 1:00:22
  Speaker 1: other internally. So if you were to look at Barry
• 1:00:25
  Speaker 1: the Dynasty logo, you will see some similarities to the
• 1:00:29
  Speaker 1: Vitamin Water logo. Uh. And that's because when you have
• 1:00:32
  Speaker 1: a brand building genius who's helping you early on, you
• 1:00:36
  Speaker 1: want to listen. So I would. I would say Mike
• 1:00:38
  Speaker 1: was was a great mentor to me early on and
• 1:00:42
  Speaker 1: starting Dynasty. So let's talk about books. Tell us what
• 1:00:46
  Speaker 1: some of your favorite reads are and what are you
• 1:00:49
  Speaker 1: reading right now? Well, I just read uh and this
• 1:00:55
  Speaker 1: is this is going to be a shameless plug for
• 1:00:58
  Speaker 1: someone who's a friend of both of us. I actually
• 1:01:01
  Speaker 1: just had the opportunity to finish reading uh, Josh Brown's
• 1:01:06
  Speaker 1: book on How I Invest My Money. Joshua, Josh and
• 1:01:09
  Speaker 1: Ivan personal friends for for quite some time. And what
• 1:01:12
  Speaker 1: you know, you have remarkable talent and partner there who
• 1:01:16
  Speaker 1: thinks the world of of you. Um. And let me
• 1:01:19
  Speaker 1: let me just jump let me just jump in here
• 1:01:21
  Speaker 1: and say, I remember when the two of you, I
• 1:01:25
  Speaker 1: want to say it was we're both named to the
• 1:01:28
  Speaker 1: forty under forty list? Is am I getting the dates right? Yeah?
• 1:01:32
  Speaker 1: He's much older than me, but that's right. Yes, I
• 1:01:35
  Speaker 1: think you guys are about the same age we are.
• 1:01:39
  Speaker 1: We are all kidding us side we are, and we're
• 1:01:41
  Speaker 1: kindred spirits and he's the best. So he invited. Isn't
• 1:01:45
  Speaker 1: that a great idea for a book, by the way,
• 1:01:47
  Speaker 1: the to to speak to a bunch of people in
• 1:01:49
  Speaker 1: finance and say, don't tell us what you say on TV,
• 1:01:53
  Speaker 1: tell us how you invest your own money. I love
• 1:01:56
  Speaker 1: that idea. I do too. When he sent it to me,
• 1:02:00
  Speaker 1: what the first thing I said to him is this
• 1:02:03
  Speaker 1: is brilliant and I'm shocked that no one else has
• 1:02:05
  Speaker 1: thought about it. I said, did you do your research?
• 1:02:07
  Speaker 1: Has anyone else done this? And he said, I'm telling
• 1:02:09
  Speaker 1: you they haven't. And I get people reaching out to
• 1:02:12
  Speaker 1: me all over the world. I mean, it's it's it's
• 1:02:14
  Speaker 1: it's it's pretty special saying hey, I just read your
• 1:02:17
  Speaker 1: chapter of of of How I Invest My Money? Uh.
• 1:02:21
  Speaker 1: And I love how you said, you know how you
• 1:02:24
  Speaker 1: think about the family capital or I have a fun bucket,
• 1:02:27
  Speaker 1: which for me is houses and my horses. We have
• 1:02:29
  Speaker 1: a horse racing stable. Uh. And people from all walks
• 1:02:33
  Speaker 1: of life have reached out. So it's been great and
• 1:02:35
  Speaker 1: I'm glad that that Josh invited me to be a
• 1:02:37
  Speaker 1: part of it. The other book I'll Mention, which I
• 1:02:40
  Speaker 1: just started to read, I'm a big proponent. I talked
• 1:02:43
  Speaker 1: about mentorship, both being a mentor and being mentored by
• 1:02:47
  Speaker 1: a committee of people. I've just started reading in Professional
• 1:02:50
  Speaker 1: Development in Yourself and Your Team a book called Tribe
• 1:02:54
  Speaker 1: of Mentors, which was written by a guy named Tim Ferris,
• 1:02:57
  Speaker 1: And it's a book that get introduced to me through
• 1:03:01
  Speaker 1: the ASP Institute. Uh and uh again it's early you
• 1:03:05
  Speaker 1: ask what I'm reading right now, But I love the
• 1:03:08
  Speaker 1: concept of group mentoring. What sort of advice would you
• 1:03:12
  Speaker 1: give to a recent college grad who was interested in
• 1:03:17
  Speaker 1: a career either as an advisor or in the professional
• 1:03:21
  Speaker 1: finance services industry. Yeah, Barry, I love that question. First
• 1:03:26
  Speaker 1: and foremost, I would say, do it. We need you. Uh.
• 1:03:30
  Speaker 1: You know, the financial health and wellness of our country
• 1:03:35
  Speaker 1: is not where it should be, whether it's on a
• 1:03:38
  Speaker 1: national or state level, whether it's the fact that over
• 1:03:41
  Speaker 1: sevent Americans can't put their hand on a thousand dollars
• 1:03:45
  Speaker 1: in an emergency. Um. You know, given my background and
• 1:03:49
  Speaker 1: how I grew up, uh, financial literacy is something that's
• 1:03:52
  Speaker 1: near and dear to me. It's fundamentally changed the life
• 1:03:55
  Speaker 1: that I've been able to live. So we need more
• 1:03:58
  Speaker 1: people to come into the industry. Please do it. It's critical, Uh,
• 1:04:03
  Speaker 1: you know, to to to our country. In terms of
• 1:04:05
  Speaker 1: specific advice to someone starting out, Uh, it's it's it's
• 1:04:10
  Speaker 1: not about what you learn, it's about what you learn
• 1:04:15
  Speaker 1: in the first let's call it three years. So finding
• 1:04:18
  Speaker 1: a great mentor finding an organization, finding a team that
• 1:04:23
  Speaker 1: cares about your development will push you, will let you fail,
• 1:04:26
  Speaker 1: will let you learn from those mistakes. Uh. If you
• 1:04:30
  Speaker 1: can find that environment and you're gonna get paid five
• 1:04:33
  Speaker 1: to ten tho dollars less uh than an environment that
• 1:04:37
  Speaker 1: you're not going to have that take the lower pay.
• 1:04:40
  Speaker 1: It's all about you know, what you learn the tuition. Uh,
• 1:04:43
  Speaker 1: you know, think about it that way early on, if
• 1:04:45
  Speaker 1: it's a lower price job, and put yourself in that
• 1:04:49
  Speaker 1: environment because it will pay massive dividends for you over
• 1:04:52
  Speaker 1: the course of your career. And our final question, what
• 1:04:56
  Speaker 1: do you know about the world of financial services and
• 1:05:00
  Speaker 1: vesting advising today that you wish you knew years ago
• 1:05:06
  Speaker 1: when you were first getting started. Yeah, well that's a
• 1:05:09
  Speaker 1: good one, because again I'm forty four now, so you
• 1:05:12
  Speaker 1: can subtract off twenty five. That was a nineteen year
• 1:05:14
  Speaker 1: old kid. But look at what I like to tell
• 1:05:18
  Speaker 1: a lot of young people, and certainly would would tell
• 1:05:21
  Speaker 1: my nineteen year old self, is to have the discipline
• 1:05:27
  Speaker 1: to pay yourself first from an investment perspective. And as
• 1:05:31
  Speaker 1: we all know, it's not always about getting right whatever
• 1:05:34
  Speaker 1: that means. Uh, you know, the the asset allocation because
• 1:05:38
  Speaker 1: that will change over time, or security selection, et cetera.
• 1:05:41
  Speaker 1: It's about actually being discipplinted to save and whether you're
• 1:05:46
  Speaker 1: saving you know, five early on. Uh. And even if
• 1:05:49
  Speaker 1: that number appears to you know, I hear a lot
• 1:05:52
  Speaker 1: of people saying I can only save fifty dollars a month,
• 1:05:56
  Speaker 1: Well that's great, that's a wonderful place to start. Save
• 1:05:58
  Speaker 1: the fifty dollars, start to invested and let the miracle
• 1:06:01
  Speaker 1: of compound interest start to work for you as early
• 1:06:05
  Speaker 1: as possible in your life. Uh. And I love getting
• 1:06:09
  Speaker 1: that message out to young investors, just to get them
• 1:06:13
  Speaker 1: started and being disciplined. We all have a lot of priorities,
• 1:06:17
  Speaker 1: but if we can say, look five percent early on
• 1:06:20
  Speaker 1: of our check without exception, regardless of what seems to
• 1:06:24
  Speaker 1: be you know a big priority in our life. We're
• 1:06:26
  Speaker 1: gonna pay ourselves first and start investing it. Get a
• 1:06:30
  Speaker 1: simple financial plan in place. You look back, you know,
• 1:06:33
  Speaker 1: to your question twenty five years later, you'll be very
• 1:06:36
  Speaker 1: glad that you did it. Great stuff. We've been speaking
• 1:06:40
  Speaker 1: with Sheryl Penny. He is the founder and CEO of
• 1:06:43
  Speaker 1: Dynasty Financial Partners. If you enjoy this conversation, we'll be
• 1:06:48
  Speaker 1: sure and check out any of the previous four hundred
• 1:06:51
  Speaker 1: such interviews we've conducted over the past seven years. You
• 1:06:54
  Speaker 1: can find that at iTunes, Spotify, wherever you feed your
• 1:06:58
  Speaker 1: podcast fixed. We love your comments, feedback and suggestions right
• 1:07:03
  Speaker 1: to us at m IB podcast at Bloomberg dot net.
• 1:07:08
  Speaker 1: Sign up for my daily reads at rid Halts dot com.
• 1:07:11
  Speaker 1: Check out my weekly column on Bloomberg dot com slash Opinion.
• 1:07:16
  Speaker 1: Follow me on Twitter at Rid Halts. I would be
• 1:07:19
  Speaker 1: remiss if I did not thank the crack staff that
• 1:07:22
  Speaker 1: helps put these conversations together each week. Reggie Brazil is
• 1:07:26
  Speaker 1: my audio engineer, Michael Boyle is my producer atka. Val
• 1:07:31
  Speaker 1: Brand is our project manager. Michael Batnick is my head
• 1:07:35
  Speaker 1: of research. I'm Barry Ridholts. You've been listening to Master's
• 1:07:39
  Speaker 1: in Business on Bloomberg Radio. You're listening to Master's in
• 1:07:43
  Speaker 1: Business with Barry Ridholts on Bloomberg Radio.