Intro Hook

Unknown: And you know I was so I was on another level nervous, okay, because it’s the first phone call, okay. I mean big big deal, and I really needed that first phone call to go well. I needed it to go well. And and, you know what she said to me, Corey? The first words out of her mouth were, I’m so proud of you, Jason. That’s what she said. And I just was like, I mean I almost wanted to cry. It was so, uh, I mean it was so it was so impactful. It really was. And, uh, I’ll never forget it for the rest of my career. Never forget that that conversation.

Podcast Opening + Introductions

Unknown: Hey everyone, thank you so much for joining the podcast today. If you’re an Edward Jones adviser or just an employee financial adviser in general considering potentially making a move, we have a really really good podcast today in my opinion. There’s more misconceptions about moving from an employee firm to another firm than any other situation in the industry, and, uh, we have a really impressive team today to kind of go through some of those misconceptions and what their experience was making a move from Edward Jones to the independent channel. Uh, today we have on Jason Barber and Taylor Pankratz, uh, that were $500 million multigenerational Edward Jones office that just made a monstrous leap over to open up, uh, their very own raia. Guys, I really appreciate you being on the podcast today.

Unknown: Thanks for having us.

Unknown: Yeah, absolutely. Guys, if you don’t mind, just talking a little bit about, you know, you guys in general and what your team looked like prior transitioning to Edward Jones. I think that would be really really helpful. I think it’s a really unique story.

Background + Team History at Edward Jones

Unknown: Yeah, so I’ll give you some of the background, Corey, on that, and Taylor feel free to chime in. So, um, you know, prior to leaving ever Jones, our our family has been a long history with Edward Jones, not unlike many others, but we were as a family a part of the Edward Jones family for 41 years. Um, Taylor and I’s grandfather Paul Barber was the first Edward Jones advisor in our small town of nacadas Texas, and he started the first office in 1981. And we’ve got all kinds of stories that we can tell you. I mean, he’s we have a picture in the office of our our grandfather, uh, shaking hands with Ted Jones, you know. And Ted came to visit because he used to do his famous trips around around the country and and meet all of the Brokers back then. Of course it was Edward djones in in company, and so we, uh, we’re we’re we’re one of the ones that remembers, you know, what it was like when it was Edward D Jones and Company.

Unknown: And I actually have a lot of memorabilia that my grandfather kind of Saved, thankfully, that has that old logo, the old uptick logo on it, and and all all of that, which we’re really, uh, really fond of and have a lot of really good memories, um, about that. And so in 1981 he started the first, uh, office. Famously Ted told our grandfather that he had the most production per square foot in the whole in the whole firm. His office was very very small in, uh, on Main Street in nacadas, and and so we’re really proud of the the the Legacy that he that he left.

Unknown: And and sadly he, uh, Paul passed away in January of this year at the age of 90, and so he was he wasn’t able to see it all the way to all the way to fruition, but as far as our our transition, but, um, but we’re really proud of that of that Legacy. And so Paul started in 81, and then Steve, uh, Steve Barber, my dad, Taylor’s Uncle, uh, started with Edward Jones in 1992 I believe is is what it was. And then I started in 2011, and Taylor in 2020.

Unknown: Taylor’s got some more history, um, that he’s going to talk about as far as because 2020 wasn’t when he got into the industry, but that’s when he came and joined and joined our office, um. Additionally, uh, Taylor’s Taylor’s mom, my aunt, works with us and has worked with us in the office for 20 years or more maybe, I think. And, uh, and then Debbie Floyd is also part of our of our our office admin staff, and she’s been with us for 21 or 22 years, I believe now. And, uh, and then we had a few others, Clare bivv and Rachelle Hughes, and Rachel she recently retired and Claire still works with us today as well. So, um, I don’t know, Cory, if you if there’s more that you want me to talk about on that subject, or if you want me to to go into more detail, or Taylor, maybe you can share some some comments about kind of your your history and how you came to be en joining our office.

Taylor’s Path Into the Office

Unknown: Yeah, uh, um, I got into the industry back in 2015. Like Jason said, the family’s been in the industry for a while. I was doing, uh, oil and gas engineering before that and, um, was working for Raymond James on the independent Channel Side, um, out of a office down in downtown Houston. And kind of in 2020, or maybe it was yeah around 2020, Jason and I were talking and he was kind of saying, hey, why don’t you come move back to naad Coes from Houston and join the office. And and, uh, I ended up I ended up doing that. It was probably one of the very few advisers that’s ever left Raymond James independent to go to Edward Jones captive broker dealer. So it was, uh, you know, it was a different experience, uh, than most probably, the the different kind of, uh, Direction than most people than most people go, but it was great. And then it allowed us to, uh, kind of figure out what we wanted to do, uh, to try to, um, you know, we were just outgrowing our our Edward Jones, uh, home and decided we needed to make a make a change. And so that kind of is where this whole journey starts off.

Early Influence Toward an RIA

Unknown: What’s also interesting, Corey, that I’ll add a little bit of color commentary to that is a few things. Um, you know, one is that, you know, when Taylor—and it’s really just kind of ironic and coincidental how, um, how how this all happened—but when Taylor left Raymond James to come to us at that exact same time that that was happening, T Taylor’s—what do you call that, Taylor—your your boss, your, uh, the person that was running the firm?

Unknown: I was I was with, um, Claris wealth group. He was on the independent side of Brook of Raymond James.

Unknown: And so he was at that exact same time breaking away from the Raymond James independent broker dealer and starting his own raia at that exact same time. And he and Taylor can tell the story better, but he was, um, telling Taylor that, you know, all these are his words not mine, but all of the the top Raymond James independent broker dealer people were breaking away and starting their own raas, right. So not literally all, but a significant number of them were were doing that. And so I think, you know, we didn’t really recognize that at that time, uh, kind of what that might mean for us, but it was very influential, I think, in our some of our decision making, um, around, you know, the the decision to Just Launch our own, uh, independent ra.

Light Bulb Moments

Unknown: That’s great. So you you you mentioned it a little bit already, and I’m I’m sure that’s one piece, but, you know, what were some of the white bulbs that went off through your career at Edward Jones where it made you, you know, just realize that you you would have to move on at some point to a more flexible model?

Unknown: So, you know, thought about thought about this a lot, and, you know, I think that there’s sort of two big things that were big light bulb moments for us. Um, one is, uh, you know, this concept of being a a business owner, okay. And that you know for for 40 years, uh, you know, maybe not for me personally, but for our family, you know, I think that it’s fair to say that we’ve always felt like, uh, in in in maybe not legally speaking, but but in spirit anyways, that we were business owners.

Unknown: And so I think that, uh, you know, that has always been something that’s like if you go back even in just my entire history I’ve always been and thought of myself as an entrepreneur and a business owner. And, uh, I think we just kind of realized probably around the time that Taylor, uh, joined the office that that just really wasn’t the case, okay. That that we really, you know, and part of that there’s a lot of reasons and there’s a lot that goes into that that we won’t touch on today, but, um, but I think a lot of it just came down to this concept of that idea of business owner and what you’re able to do, what services you’re able to offer, how you’re able to grow, hire people, how you know what you want to pay your people that are part of your team, um, all these different things that you would normally expect as a business owner that I would have control over and say over that we didn’t in our in our former model.

Client Breakaway Movement

Unknown: And when you combine that with what we call the client Breakaway movement, um, there’s a lot of people that are familiar with if you study the industry are familiar with this concept of the advisor Breakaway movement and you know that that advisors are in Mass, you know, breaking away from the captive broker dealer model into some form of independent, um, but what we realized is—and and I’m trying to recall the person that kind of coined that term, I don’t want to take credit for quinting that term—but there’s actually a bigger movement going on, and it’s the client Breakaway movement. In that, you know, I think basically the best way to put it, Corey, is is that, you know, when we looked around—and we thankfully didn’t lose very many clients, you know, it was pretty rare that we did lose a client—but when we did lose a client, we weren’t losing those clients to Marl Lynch to Raymond James to Wells Fargo to those types of places. We were losing clients to Ras, okay. Independent fee only Ras, because they could offer more services than we could, okay. And and so we realized that that’s when I think the light bulb went off. And and combining that with Taylor’s experience, uh, all sort of led to this concept of that’s where clients are going, right, the kind of clients that we want to have, that’s where clients are going. Clients aren’t, uh, they’re breaking away as well from from that that captive broker dealer model.

What Advisors Gain by Going RIA

Unknown: For sure. So, so let’s dig into that a little bit more. We don’t have to discuss like specific Edward Jones items, but if a financial adviser came to you today and they were at an employee firm and they were interested in plugging into the raia channel, what would you say to them are the things that they would gain by doing so? Taylor, you want to take that one?

Unknown: Yes. I think the I think the main there’s a there’s a handful of differences, of course, um, and it really depends on kind of which Raa you you you probably plug into, uh, because they’re all really a little bit different because they’re all kind of run how how the owner sees fit. But the reality is the technology at Edward Jones is actually pretty good. A lot of people that work at ever Jones don’t think that, uh, because they haven’t really seen a lot of the other options, but having been at Raymond James, having seen a lot of the technology that’s out there on these other, uh, captive broker dealers or really even in the independent space real large, you know, at mer prize and LPL, the Edward Jones technology is really really pretty good.

Unknown: Um, the the downside is they just put a lot of Governors on it to where you don’t get the full functionality of what it probably can do. But, um, and to really be able to use it across your full book with discretion, etc, and stuff, but but, um, so if somebody Wass to plug in the technology, uh, depending on which Raa they plug into, the technology might actually be a step down, and that’s something that we are are actively trying to build is a technology that’s comparable to what we’re used to but in the raia, uh, world, but, um.

Unknown: Compliance is a, you know, at our previous, uh, firm was a was a huge deal. I mean, a big, uh, time—a lot of time spent on addressing compliance issues that you would, you know, otherwise think are very rudimentary that you wouldn’t think that you need to spend hours upon hours to address. But, um, so I would say compliance is something that a lot of advisers would get a better experience from in the ra Channel than than at the Capt broker dealers. Like I said, the technology might be a step up or might not depending on which ra you plug into, um, but it overall the value that you can add to clients is really where the difference is made. Where you can add Alternatives, you can offer people Alternatives, private Equity, hedge fund off offerings, um, structured notes—things that that are out there that when you’re in the Capt broker dealer you don’t even know exist—and all the sudden you have this whole other investment menu That’s opened up for you, which is a which is a nice value add to clients.

Unknown: And then there’s a lot of, um, tax planning and things that that most cap broker dealers don’t want you to do because of the liability, etc, that, uh, raas typically try to leverage, uh, to be a little bit more inhouse with their financial planning, tax planning, and how those two things, uh, kind of have overlap. And so there’s there’s a there’s a lot of value that, uh, that I think advisors that break away look to add to their clients. But, um, I don’t know if Jason you have anything else to add to that.

Unknown: Yeah, I think that, um, yeah exactly, Taylor. I Echo everything you said, but I think that, you know, for example, Cory, next starting next year barring something unforeseen we’re we’re going to be launching a tax business, uh, to go alongside our kind of like as a sister business because we’ve been talking with, uh, clients about this and and I mean it’s it’s 100% takeup almost where when people, uh, have the option and the opportunity for us to be able to to truly have it be a One-Stop shop where they can get their tax return done, they can get a will drawn up, they can get a trust drawn up, they can get all kinds of services all done in one one place, uh, and have that that holistic approach to it. It’s, uh, it’s a really big value add, and so we’re we’re really really excited about that about that business.

Unknown: I would say again from a from a technology standpoint, um, you know, Taylor kind of touched on this a little bit, but the way we see it is that—and you’re you know one of the things that that you might be wondering, Corey, is like, well, why why didn’t we just plug in into a different ra instead of, you know, why do we why do we create our own instead of plugging into somebody else’s? And and I think a lot of it is because frankly we figured out that there wasn’t anything that was from a technology standpoint in line with what we or you know even really close to what we were coming from y, okay. You know, in in terms of that and and so we just realized it’s it’s like maybe said it differently, Corey, if if if what we are creating existed, if what we if what we’re creating, had it existed at the time, then we would have plugged into that, okay. We would have much preferred frankly to not have to go and and reinvent the wheel, you know, but we just felt like it didn’t exist, and so therefore we had to go create it.

Compliance Flexibility

Unknown: So yeah, that makes that makes a ton of sense. And Taylor, back to what you were saying around compliance, when I’m helping financial advisers expl or their options, I just always try to tell them there’s a humongous difference between what the SEC and finra say you can do as an individual financial advisor versus what companies understand those those rules to be and are comfortable policing across 9,000 10,000 20,000 financial advisers. And many times in the middle of both of those, you know, there’s a lot more flexibility because there’s just very broad rules and firms are a lot more comfortable if there’s a couple hundred financial advisors. There’s less flexibility, less friction from a compliance standpoint in a bunch of different ways that we could definitely cover in another podcast as well.

Unknown: Yeah, you know, it’s it’s almost like, you know, in the neighborhood the speed limit might be 30 miles an hour but then there’s might be speed bumps every 50 feet, right, to just make sure that you don’t cross the line and speed. That’s that’s that’s a that’s a good analogy for how the captive broker dealers run the compliance is that they have systems built in place that make it impossible to speak right impossible. And the reality is that’s nice except it makes the advisor’s life and and efficiency really, uh, hard to kind of add value to clients but also answer a whole bunch of emails or or, you know, whatever you might call it, um, to you know satiate the compliance person that that’s trying to check a box in their system, right. And so it becomes this battle that you’re spending more time answering emails about things that really have they’re not adding value to the client then you are actually talking to clients. And it’s it’s a shame, but that’s that’s kind of the monster that that is. It’s kind of what they’ve what they’ve built and what they’ve become, so, um, but yeah. So it’s interesting.

Unknown: Ju Just ju just using your analogy and piggybacking on that, almost every conversation I have from a financial adviser that’s moving from an employee firm to an independent firm that’s the frustration in one way or another. I’m a financial adviser that’s following the rules and I’m going 35 miles an hour every single day, yet I’m getting treated like, you know, a speeder or a novice driver that is hitting these speed bumps along the way, and it’s getting in the way of serving the clients the way that I want to.

Unknown: That’s the conversation I almost have every day.

Asset Retention After the Move

Unknown: Yeah. And and it gets in the way, and when you realize that all of the sudden when you are at a captive broker dealer that at the end of the day you’re not a business owner and you’re an employee, and you realize that you make one mistake, right, or you or you, you know, or maybe not even a mistake but you drive 40 miles hour in 35, that that could all be stripped away from you, okay. Uh, and and all of a sudden it’s kind of like it’s it’s it’s more than just an inconvenience.

Unknown: So I think one of the biggest misconceptions at Edward Jones and other employee firms as well is, you know, you’re you’re you’re not going to bring more than 50% of your assets when you come. Historically financial advisers do not bring the Lion Share of of of their clients, and me helping over a 100 Edward Jones advisers transition from one firm to another I know that’s very much not the case, but, you know, would love to hear what your experience was when you transition, what what what your asset retention was.

Unknown: So we’re we just crossed a six-month Mark, and and we’re we’re tracking to be, uh, right at right at approximately 90% uh after six months.

Unknown: That’s amazing.

Unknown: Yeah, so it’s it’s been I’m I’m not going to sit there and tell you, Cory, that it was easy, um, you know, by any means, but, uh, been probably several months where the, you know, probably the hardest that that any of us has ever worked really. But, uh, um, but but and and not that it didn’t have some speed bumps along the way, uh, but that that we, uh, we we’ve been very we’re we’re proud of the of the success that we’ve had, and and we’re we’re expecting and anticipating that that by the time we get to our Oney year anniversary that we’ll probably will have have be above 100%, you know. And that’s not necessarily from, you know, old business, but that could be from new business. You know, we’re we’re about to launch a pretty significant marketing campaign here, uh, shortly that we’re really.

Marketing + Differentiation

Unknown: And that’s another thing that you know we’re just so excited about, Corey, is the ability to to be able to Market and differentiate ourselves, uh, is is really a powerful thing because because, um, where we’re from in East Texas we’re not really in a small town per se. I guess it’s all a matter of your, uh, perception, right. I think our population of our town is around 30,000. And, um, you know, but but if you go to the big cities, if you go to Houston and Dallas and Austin, there’s a lot of independent fee only Ras there, uh. There might be as many raas there as there are broker dealers, maybe more perhaps. But in our area we’re the only show in town pretty much, uh, that that is truly be, you know, truly able to tell clients that we’re fiduciaries 100% of the time, that we’re truly independent, we’re not tied to one particular custodian. We’ve got, you know, we’re multic custodial already just six months in, uh, and and we just think that is extremely a very very powerful differentiator that we’re we’re excited to be able to Market.

Brand vs Relationships

Unknown: So another misconception that just ties into the the last one is just like how important brand is to, you know, successfully building your business, making your clients comfortable doing doing business with you. I mean now that you’re on the other side of your transition, what would you say to that?

Unknown: Yeah, I mean, I I I would say that we were no different, you know, going going into the the Breakaway, you know, I would say we were worried about everybody tolds you that you’re gonna take 80 or 90% of your business and you don’t want to be the outlier, right. You don’t want to be the the people that take 50% of the business and and kind of have this big life-changing event and you fail at it, right. And so what we we were we were, you know, stressed about that because everybody says it’s hard to break away from a captive broker dealer because of the brand, um. Our experience was really that people do business with people that they trust, right. They they they want to do business with people that know them, that they they’re used to talking to, right. They don’t want to have to get to know a whole new person and have that person get to know them, right. And so, uh, I would say that I think that Miss I think that’s a miscon misconception. I think that the brand, uh, you know Jason alluded to it earlier which is people are actually clients are actually breaking away from the captive broker dealers because they’re getting a little bit more educated on the fiduciary role, uh, the conflict of interest that that exists in those captive dealer models. And and so you’re actually seeing a kind of a little bit of a a different push, which is clients are breaking away from these household name brands and going to name brand the brands you’ve never heard of, right. These Ras that you’ve never heard of.

Unknown: And so, um, because they value the person that they’re used to dealing with, they that trust and they want that conflict of interest or that fiduciary aspect that a lot of people can’t provide, uh, in the captive dealer, uh, model. So, you know, it’s it’s definitely it’s definitely a concern, but it doesn’t need to be something that’s preventing, you know, standing in the way of somebody breaking away, because the reality is you can actually leverage that to get to grow your business at the end of the day, um. You can sell against that. And so, uh, that’s something that we’re excited about pursuing. And and we’re seeing a tremendous amount of growth potential just in that by itself.

Personal Relationship Example

Unknown: I I think that’s a a great message, and, you know, we we we’ve had this conversation before, but I’ve never been a financial adviser. I’ve never transitioned to practice, but I’ve helped over 500 financial advisers do so, and I’ve been on the other side of it, you know, as a client. My my doctor of 13 years who I know extremely well, who I have an amazing rapport with, who knows my family, he transitioned from a really big box hospital system here in North Carolina that everybody knows and most people go to to open up his own independent place. And when I found out that he left through a letter, you know, I wasn’t curious about do they have the same tools and capabilities or, you know, what the new firm he went to was was all about. It was all about my personal relationship with him. I actually had anxiety because I was like, man, am I gonna be able to go with this guy? Am I gonna have to build this Rapport again with like a complete stranger again? And I just thought that was, you know, really really powerful, um. And I know if my financial advisor today left to move to another firm I I wouldn’t even blink twice.

Operator vs Employee Mindset

Unknown: That was our that was our experience, you know. Or I mean we think that it it, you know, as it as it is for you and your experience in the healthcare industry that’s the experience that we think, uh, exists in the financial industry for sure. So, um, we do think that, you know one of the the questions too, you know, is is kind of what what should financial advisers ask themselves, you know, when they’re when they’re thinking about doing this and sort of the questions that maybe we we asked ourselves going into this as well is I think that that the the biggest question people should ask themselves is are they an employee? Do they think of themselves as an employee, or they do they think of themselves as an operator, um. Are they the kind of person not just a business owner but an operator? You know, are they the kind of person that wants to be, uh, you know, and it’s not that one is right and one is it’s that there’s different levels of responsibility, different level of control, different levels of customization that come with both of those both of those roles. And I’m sure there’s some people that are perfectly, uh, content being more of, you know, an employee, all right. And I don’t say that in a negative sense, okay. It’s just it’s easier frankly to be an employee, uh. A lot of decisions are made for you, okay. But but the consequence that comes with that is that you don’t have the C iation and control that often times you might want.

Different Paths to Independence

Unknown: Sure, yeah, that’s that’s that’s super helpful. And you know there’s there’s no right answer for every single advisors, you know. I’ve been seeing some Edward Jones advisors making a transition to another employee firm. Obviously there’s quite a bit going to the independent broker dealer Channel. You know, there’s a rare amount of advisers launching their own Ras like you, but I have seen quite a bit, you know, plug into an existing raia as well. So there’s a lot of different options out there for sure.

Should a Solo Advisor Start Their Own RIA?

Unknown: But so one thing that’s rare about you guys, you’re basic you were basically a team inside of Edward Jones. There’s multiple people juggling different responsibilities. You guys had the ability to, you know, act as a team while you did this. What with the amount of work that, you know, it took to launch your own raia with multiple people handling different things, would you recommend it to, you know, the typical Edward Jones adviser with a 100 million in assets that’s, you know, him and his boa sitting alone in an office?

Unknown: I me reality is recommend starting your own ra if you in that scenario. If you were a single advisor with AA And1 million, uh, it’s just not building you’re you’re going to be better suited plugging into an RA in that environment. And, you know, a lot of people they’re even thinking about it. The first place they think is, well I’m gonna go to the independent Channel because they don’t even think of the Raa Channel as really an option. Why that is just maybe isn’t they don’t they don’t see it enough or or research it enough before they really make a decision, but, uh, or they just want it to be turn key, right. And a lot of r that you plug into can make it turn key as well.

Unknown: So, um, but I think I think what happens is they go to the independent Channel—Raymond James or mer price or whatnot—and they outgrow that channel, right. They outgrow because you’ve got the same things that they left their cap broker de for: compliance issues, technology, whatnot. You have the same constraints at these at these independent channels where compli sence really isn’t all that better. In fact, in some ways it can be worse, and the technology like we talked about is always better. And so they get there and they go the grass isn’t always greener.

Unknown: So then they do what a lot of independent people now, and they’re forming their own ra, right. So they’re kind of moving B twice, having that having that call their people twice and explain the whole thing, and it’s just like why why would you want to be want to do that twice? And the reality is they do it because they know a different way, right. And so the pluging into an RA if it’s the right one could be the solution for that advisor that’s by himself because starting ra from scratch, I will say, it’s impossible for single ADV to do, but it would be, you know, like to shake that man’s hand because it’ll be very impressive to try to do that and transition and all of that. I mean, it just be a lot. And so I don’t see that as practical. Majority of people that are in that scenario be more practical being pluging into the existing ra that kind of all the transition and all that stuff that you want the independent channel to provide you, but then you get the flexibility and freedom of not having to ever move your book again.

Unknown: So I think that’s something that’s a lot of people out call it shortsighted. They just don’t even think it’s an option because they don’t really research it enough. It’s hard to research things. Captive broker dealer, it’s you know it’s like everything you’re doing is is you know you’re just you’re in F you’re try not to get fired. So break away. So anyway that’s J we might have some some things added up. That’s how I would see it. I would see this very hard and, uh, very impressive if you could get ra off the ground by yourself.

Outsourcing by Plugging Into an RIA

Unknown: Jason, why don’t why don’t you talk about real quick, um, like what plugging into somebody else’s ra means and like what that, you know, what they’re Outsourcing, um, so they could just focus more on their clients.

Unknown: Yeah, for sure, Corey. So yeah, there’s there’s, uh, there’s a lot of different services and sort of some things that you could think of as table stakes and and just are like by default you should expect to get if you plug into an raia, and then there’s some things that are nice. But what you probably will find or what we found is that there’s most the majority of the existing Ras that you could plug into, they want to offer you all kinds of services, all kinds of special things. And at what you have to realize is that every single one of those things whether you want it or not you’re paying for that.

Unknown: And and so that’s one of the things that we we’ve figured out is that we didn’t really—one of the reasons we didn’t want to do that is it just didn’t really make sense for us. And there was a lot of services that were being offered that we just felt like either we could do it on our own or we just simply didn’t need it coming from where we were coming from, um. But, you know, I would say that the main things, Corey, that come to my mind are are, uh, you know, billing, for example, uh, you know, technology and being able to have, you know, instead of having to figure all of that out on your own—which I could tell you very, uh, plainly is not like people don’t really respect the difficulty that comes with building your own technology and building your own technology stack. I mean, I didn’t I didn’t dis I, uh, I think we we made, uh, probably six figure mistakes on that, frankly, okay. Uh, mistakes that cost us more than $100,000, uh, because of mistakes that we made building our own technology stack.

Unknown: So I think that that there’s a lot that that goes unappreciated there, um. You know, so plugging in, of course you’re going to get technology. You’re going to get transition support generally speaking, so somebody that’s going to, um, help you figure out, you know, how to how to get your real estate set up, how to get your, um, legal Arrangements set up, how to get, uh, legal advice, how to get, uh, all of the above that comes, you know, from that standpoint. Billing. Cyber security is a big thing, you know, that that, uh, you know, you maybe don’t realize how how significant and how important that is and how comple complex and complicated it is to understand, you know, how to how do you make sure that you have a really rock solid cyber secur infrastructure.

Unknown: So, you know, kind of our vision ultimately to put it in in a nutshell is that what we think the typical maybe say it like the person that that’s like us, the entrepreneur, okay, that the entrepreneur that maybe doesn’t doesn’t want to or isn’t capable of figuring all of this stuff out on their own, yeah, that what they really should be searching for and wanting is somebody that’s going to do only the things that you absolutely positively have to have, okay. And only the things and and those few things: billing, cyber security, technology, transition support, you know th those kind compliance—we didn’t talk about that, you know—but but that that, you know, your compliance, that those things should be done very very well, okay. But then all of the other bells and whistles leave that up to that individual person to decide whether or not they want that in their own business, okay. Because they may decide that they don’t want it and they don’t need to pay for that if they don’t want it.

Unknown: You know, if they don’t want to have a, you know, family Office Division or they don’t want to have an alternative sleeve of their business or a whole division of the raia that they’re plugging into that’s dedicated to Alternatives, they may say, I don’t do Alternatives. I don’t want to do Alternatives. So why should I be paying for that, um. So there’s there’s all kinds of things like that that I think are are really, um, impactful. Um, so, Corey, just to give you a little bit of of color to what Taylor was saying, you know, I I was I was told by, uh, a broker dealer that also has a a Raa Division and an independent broker, uh, division that in 2020 that their raia division had $30 billion of AUM and today stands at150 billion. And I asked him directly what he believed the reason for that growth was, and his answer was that the vast majority of that growth has come from people that were with that exact same broker dealer in the independent broker dealer space doing what, uh, what we we are seeing and they’re they’re moving their book again, all right. They’re moving from that independent broker dealer channel into the same ra division mainly because of compliance and Technology, okay.

Unknown: And so, you know, that’s that’s where we think is so important this idea of don’t move your book twice, um. Why you know there’s a very high probability that if you move from a captive broker dealer into the independent broker dealer space that eventually you will outgrow that as well and and end up having to move your book again. And so we just we just thought that’s that’s largely why we were we were fortunate, you know, in in having Taylor’s experience and being able to see that and kind of understand that that’s the general Trend, uh, that’s out there in this in this industry. And so we just figured that we only wanted to do it one time.

“Don’t Move Your Book Twice”

Unknown: And so, uh, you know, it’s funny there’s actually it’s cheesy. Taylor’s Taylor’s going to laugh that I’m even going to say it, but there’s a, you know, there’s a there’s an attorney here in East Texas that has a slogan that says don’t get hurt twice, kind of a insinuating, you know, like, well, if you got hurt in an accident don’t get hurt financially too, you know, yeah. So I look at it at the same idea, you know, don’t move your book twice. Like why why would you do that, you know? It’s it’s a very high probability that eventually you’ll have to move it twice if you don’t go the if you don’t make the full leap, but, uh, plugging in is sort of the solution to that.

Technology: What Surprised Them

Unknown: So you you you talked about technology and compliance as reasons advisers are are making a move to the independent Channel. What are some of the things from a technology standpoint that have like truly just blew your mind, like making a move to the Raa side that you feel like other advisers should know about?

Unknown: Well, to be very Frank, Corey, I mean, I I think that where we where we used to be it’s it’s really it’s been very eye openening in that, you know, when we first made the move, um, I think that that we really really discounted how how good the technology was at our previous firm, uh. It really in a lot of ways is good technology, very very well integrated, okay, uh. But as we talked about, just with a lot of restrictions on it in terms of how you’re actually able to to use that and how efficient you can be and things of that sort. It’s kind of a lowest common denominator, you know, type thing. So everything is is got Governors on it and you’re not able to go, uh, you know, very fast or use it, you know, in a way that maybe you would you would want to.

Unknown: So I think that from a technology standpoint in in our world now, I think the things that were the most eye openening were that, you know, if I can be very very Frank, uh, that a lot of the technology that exists is just plainly not all that great, okay. You know, uh, that’s out there, you know, that exists that you hear about and that you read about and that people Rave about how good it is, um, is very unintegrated, very you know not not, uh, doesn’t communicate well together, you know. And and so we’re really excited about a platform that that we’re going to be launching here pretty soon call that we call Holistic view that ultimately as I referenced a little bit a sec a little bit ago, you know, we had to spend over six figures kind of learning that mistake ourselves. One of the biggest mistakes we made was signing long-term contracts with companies before we really understood, you know, the how whether we would like it or not, uh, frankly, you know. And and so, um, so we learned that that mistake and we’re launching our own, uh, our own platform that we’re really excited about that we think, um, is the is the best thing that we’ve we’ve seen, and we’ve seen it all, you know, from a technology standpoint.

Tools They Like: Estate + Risk

Unknown: So I would say, you know, some things that come to mind though that are major improvements from a technology standpoint, um, you know one thing that we’re really excited about is is our is our ability now for people that have very basic, uh, estate planning needs that we’re able to leverage technology to to actually use attorneys through technology to deliver and actually produce estate planning documents. We’re not producing the documents, but these attorneys that exist inside of this technology platform are able to actually produce trust documents, Wills, Powers of Attorney, Etc. And so that’s that’s something that I think is really a very exciting development.

Unknown: Um, I’m trying to think, you know, Taylor if there’s anything else. You know, we we’re really really fond of our risk tool, nitrogen, um. You know, we really feel like that has taken our conversations with clients about their risk tolerance and risk number and setting really good expectations, um, around that. You know, many people in the independent space I’m not sure if in the independent broker dealer space but in the independent space are very familiar probably with, uh, nitrogen, what is formally called riskalyze, but we’ve had really tremendous response I think with that with that tool and helping people to just be able to actually give themselves a number and not just be, um, well you know you’re a you’re a you’re a low you’re a low risk, you’re a medium risk. Well, you know, what does that mean to me? And understanding that not all stocks are the same, you know. Investing in Tesla stock is a whole level another different level of risk than investing in Coca-Cola stock for example, but, you know, in the technology that we were using for the most part would consider those to be very similar type socks. They’re both they’re both large cat socks, but the reality is they’re on a totally different scale in terms of volatility, for example.

Would They Have Done It Sooner?

Unknown: So so guys, I mean, knowing what you know now, would you have made the transition to Independence earlier than you did?

Unknown: Knowing what we know now, uh, I think the answer is 100% yes. Uh, there’s just at the end of the day we we feel like and we’ve we’ve we’ve told a lot of people that there’s a lot of of great things about Edward Jones and we have a lot of love for. We have a ton of friends and a lot of love for the firm and long history, but at the end of the day we just had outgrown The Firm. It’s just it’s just that simple. And and so we just feel like ultimately, um, the growth potential that we have is is just on another level, and and so we’re really, uh, we’re excited about it and wish we would have done it 10 years ago.

Relationship Value + Transition Calls

Unknown: Yeah, and I think your transition numbers definitely, you know, speak for themselves in terms of in terms of asset retention. Look, I’ve never transitioned to practice before, and and I’ve never I’ve never had my own practice. I’ve never transitioned to practice, but I’ve helped over 500 financial advisers transition their practices in the past. And I was working with a maril Lynch adviser a couple months ago, uh, another team right around your size, and he was spending so much time focusing on what he was going to say to his clients. And he had these bullet points, and he was having these 30 minute conversations, and literally 10 times he called me and said, you know, my client literally cut me off halfway through and said, Austin, we we love you, man, we’re coming with you, um. And and and I think advisers sometimes underestimate the value that they bring to their their clients every day.

Unknown: I I tell clients the story all the time of when my doctor of 12 years left a huge big box firm and made a move to a small independent place. And when I found out that he moved, I wasn’t concerned about the other company that he was starting or if it was they were going to have the same test machines and capability. I actually had anxiety that I wasn’t going to be able to go with him. The this guy knows me, he knows my family, I I I trust him, and I didn’t even blink twice about going with them, right.

Unknown: Yeah.

Unknown: So I would encourage people to lean into that. That’s that’s GNA be their experience too, right, because that’s just that’s why the numbers are so high. It’s why it’s 80 or 90%. It’s just it’s just a fact, right.

The First Call Story

Unknown: Um, I want to tell you a story real quick, Corey, and and hopefully this this, uh, hopefully it comes out the right way. Um, so, you know, I want I was going to tell you the story about the very first person that I called and told that we left. And because as you know there’s a lot of rules, uh, and we followed all the rules to the team, okay, about what we were allowed to say, how we were, you know, we didn’t bring any clients contact information with us. We found it all on white pages.com and and all of that. So we we played by the rules.

Unknown: So I the very first client I found her phone number on white pages.com, picked up the phone, called her, and and and, you know, told her that we had that we had resigned. And and you want to know what the first thing—you know I was so I was on another level nervous, okay, because it was the first phone call, okay. I mean big big deal, and I really needed that first phone call go well. I needed it to go well. And and, you know what she said to me, Corey? The first words out of her mouth were, I’m so proud of you, Jason. That’s what she said.

Unknown: And I just was like, I mean I almost wanted to cry. It was so, uh, I mean it was so it was so impactful. It really was. And I’ll never forget it for the rest of my career. I’ll never forget that con that conversation. So and that’s how that’s how a lot of these calls went, you know. That’s how a lot of them went. You know, the only you know the only challenge was just finding the contact information, you know. So, um, you know, but beyond that the the calls were very, uh, very professional, very short, and, um, in in as as like we said the numbers don’t lie, you know, that, um, as scary as it was and it was very scary.

Unknown: And I’ll never I’ll never forget that, you know, when we’re, you know, when we’re talking to, uh, to to, you know, other other advisers that, you know, at captive broker dealers that are thinking about doing this, I’ll never discount that fear because that was a that was a real that was another level of fear, uh. Taylor and I I’m sure we’ll we’ll never forget it either, you know. So it’s it is a very very scary thing, but you just have to you just have to ultimately have faith that it’s going to that, you know, whatever happens it’s it’s going to work out right for for For Better or Worse. One way or the other it’s going to work out.

Faith Analogy

Unknown: And so I kind of, um, you know Drew an analogy, Corey, you know, when we were when we were doing this is that I said, you know, it was I’m a I’m a person of of faith, and and I said, you know, it was kind of like when when Peter was on the boat and and he saw and he saw Jesus and he got out of the boat and walked on water, right. And it was kind of like you don’t know whether you’re going to sink or not, right, but you’re but you just kind of have to have that kind of faith that that at the end of the day you’re going to be okay. And, uh, and so that was that was what it was like for us. It was really scary, but, um, but but ultimately we U we we we think we’ve succeeded.

Advice for Solo Advisors + Plugging In

Unknown: That’s that’s amazing to know. So I mentioned earlier in the call it’s pretty rare for an Edward Jones adviser to go out there and take the Herculean effort that it takes to, you know, open up their own raia. And you guys, you know, had some had some help, you know, you were a team and you can split up responsibilities and and and and and do all of and, uh, you know, split that effort in half. Um, what would you say to you know the a tip typical Edward Jones advisor where it’s just one financial adviser in an office moving by himself, maybe with his boa, um, what would you say to them watching their own raia?

Unknown: Yeah, I would I would say, you know, I I I having done it, I can say I would not recommend trying to do it by yourself. I think that would be it’s possible, but it would be a like you alluded to a Herculean task to to SU successfully transition, you know, your your book and have all your eyes dotted and tees crossed on all the things that you would need to do to actually even bu able to function as a as an raia in the first six months, you know. It it’s it would be a lot. And so I would say the best the best bet for an adviser in that scenario would be plugging in to an existing Raa and preferably one that’s built for, you know, in a way that’s kind of suited for that for for that advisor, right. The technology kind of looks the same. You don’t have this, you know, uh, you’re getting a lot of the compliance technology and billing and and all the support, transition support that you want, but you’re not having to reinvent the wheel.

Unknown: And I think that’s something like Jason alluded to: we would plug into this ra that we’ve got. We would have plugged into it if it had existed. We look at a lot of Ras that we could have plugged into, and unfortunately they just weren’t built for what we were used to seeing on a day-to-day basis from a technology perspective, and U and so that was kind of the deal killer, right, um, because that’s what you’re going to be living in every day.

Moving Twice + Fee-Only Independence

Unknown: So ultimately you either go to the independent broker dealer, right, and you transition to the independent broker dealer and then you outgrow that eventually and you have to move your book again, or you just move your book once, right, and and only have to make these transition calls one time to the clients. And I mean I’m somebody that had to move. I moved my book twice. Wouldn’t recommend it, right. I moved it from Raymond James independent, Edward Jones, and then now I’m moving it from Edward Jones to the ra, and it’s not something like it’s not ideal, right.

Unknown: And so having done it I can tell you you don’t want to do it. And, uh, if there was a solution for an adviser that’s at the captive broker dealer to plug into an exist Raa that’s suited for them and built specifically for them, I think I think that’s a that’s a recipe for Success, uh, for that advisor. I just I can’t imagine starting your own ra by yourself with you and a you and an assistant, uh. That would just be tremendous, uh, tremendous task.

Unknown: Yeah, especially because you can’t talk to your assistant ahead of time, right, so you know they they don’t they don’t Ahad with, yeah you don’t even know if they’re going to if they’re going to come with you.

Unknown: Yeah, you know, you genuinely don’t.

Unknown: And so I mean that was our that was our experience is is that no one no one knew. And so, um, so that was that’s a big that’s a big thing.

Unknown: But yeah, we we we very much feel like that there’s a major misconception right now. And, you know, Corey, you might even disagree with me, I don’t know, okay, and that’s okay if you do. But but, you know, I think there’s a major misconception in the industry about what Independence really is. And and we just feel like at the end of the day the the the industry and if advisors, you know, I know I speak for myself, and that I don’t know, you know, prior to undertaking all of this, if we even understood or I even understood what an raia even was frankly, okay.

Unknown: But I just think that there’s a lot of folks that that think about when they think about the independent broker dealer Channel, they think of that in their mind as that’s kind of like the that’s independent, that’s the that’s the that’s, you know. And and we just we just think that at the end of the day if people understood, you know, the way or think thought about it the way that we think about it, that at the end of the day the only real answer is at the end of the day true Independence is owning your own ADV, frankly, okay. That’s true Independence. And and and and while that’s a really really challenging thing to achieve as we just talked about for a for a number of people to be able to do that, the the closest thing that you can get to that is plugging into a a fee only ra, um.

Unknown: And so that’s that’s we haven’t talked much about that, but that is one thing that we also really thought long and hard about and are really excited about is the idea of being fee only. And, um, you know, I don’t know, Corey, if you what your opinion is on that, you know, as far as if you, you know, the idea of of, uh, from a compliance standpoint not having finra on your back anymore and not having Insurance licenses and not having any of those kinds of, uh, requirements is a very freeing feeling, you know. It really allows us to really put the clients interest first and to be able to say with full conviction to our clients that we’re we work for them. We work for no one else. You know, that we’re only paid by them. We’re not paid by anybody else. You know, it’s a very very freeing, very pure relationship. And we think that that’s what the future is of the industry.

Unknown: And so, you know, we just you know it also doesn’t mean that you just lose all the commission, you know, all your annuities and all these things just stay where you were, right. They can there’s there’s outfits that help you move those those annuities and those Insurance products so that you can still service them. You just can’t get paid directly, uh, from those products anymore. So, you know, it’s not like you have to just say goodbye to all these other all those assets that you might have in a commissioned environment, um. So but there is something special about being fee only and not having, uh, thra regulations and things. It’s just the client workload is tremendously less, and it allows you to spend more time doing what you actually want to do, right, which is service your client. That’s the whole point of this whole thing.

Unknown: So it’s definitely a it’s definitely what we recommend you do, right.

Closing

Unknown: Guys, I I I really appreciate the time. You’ve obviously built a fantastic business. You you know took the risk and obviously it’s, you know, really paid off, and you’ve, you know, built something really really great. I really appreciate the time, and thank you so much again.

Unknown: [Music]

Unknown: Thanks.