Introduction

Corey: hey everyone thank you so much for joining the podcast today we have a really really good one today speaking with a lot of financial advisors more every day that are interested in the Ria Channel and have the conversation all the time should I go out and launch my own Ria or plug into an existing one and take advantage of the scale that they already have built there and we have Alex Goss the CEO of New Edge advisors on the podcast today to just talk about the amazing growth story that he’s had him and his father made the move to Independence in 2014 just to find a better way to serve their clients and just through some amazing entrepreneurial spirit and some really really hard work new Edge today is up to 40 billion dollars in client assets over 300 financial advisors that are partnering underneath their umbrella and uh really excited for him to tell a story Alex thank you so much for joining today I really appreciate it

Alex: thank you Corey uh really looking forward to this conversation obviously known each other for a while so this will be fun

Corey: yeah absolutely thanks again uh if you don’t mind uh just starting off and and

How NewEdge came to be

Corey: talking about kind of how New Edge came to be I think it would be really beneficial

Alex: yeah I think you know I’m a financial advisor uh still am still have some clients um we really what we found happened is is in 2008 you had all of these really great firms and advisors enjoyed and really were happy to be a part of thank you Angie Edwards or Smith Barney’s your Morgan Keegan’s prudentials you know typically they’re Regional broker dealer kind of firms all went away and advisors were left with like no choice you had just a couple watten predominantly bank owned wire houses um you know running the space and since then you’ve just seen almost Universal dissatisfaction with with that business model so 08 was really the beginning in my mind when when the independent option became a legitimate option not that it wasn’t but perceived to be a legitimate option buy larger more complex teams and wirehouses um and you know that that trend has grown so that’s why really we we left to start our own Ria we left the wire house to do that at LPL Financial start our NRA and really just for our own clients and then began to realize pretty quickly that there’s a lot of other bigger teams out there that wanted all the benefits of the Raa or hybrid Raa space but didn’t necessarily want to run their own ra they wanted to get back to what they loved doing and that was taking care of clients and feeling like they had kind of the freedom flexibility and autonomy to do that and that in our opinion really only exist in the ra space so we started we shift shifted from just a ra for my own clients to really a an Ria for other successful advisors to tap into right around 2014 and it was just right place right time we began to snowball um and advisors I think there’s two kinds of advisors advisors that really want to go run everything and run their own compliance and be their own ra and more power to you there’s a lot of advisors that really just wanted to work with their clients and have fun again and didn’t want to have to do all of the back end work to get to that experience and uh you know that’s really the kind of Niche that that we’ve fallen into when when you made the loop to Ria from

The biggest light that went off

Corey: Wells Fargo to Wells Fargo Finance to you know truly independent like what what was the biggest light that went off in terms of you know how you could serve your clients

Alex: uh it was so I was as you mentioned I was at Wells Fargo PCG which is their W-2 Channel and uh we wanted to go independent like everybody else did at the time um so that we could be free and flexible and I remember so we went from the Wells Fargo independent I mean W-2 channel to their independent Channel which was not Raa um and I remember about two or three weeks after making that switch you know I was pretty frustrated with the branch compliance bureaucracy and and all that and there was a compliance individual that I particularly didn’t get along with because they were just it was always no no no no no you know treated me like I was some kind of criminal and um I picked up the phone about you know to do something and I needed compliance and all sudden the other person under the line it’s that same compliance person and it was like that Kramer moment where it’s like hello Newman you know that kind of it was like that moment happened and I was like oh my God I’m in the exact same situation and I was in this is not any more independent and that’s when the light bulb really went off that like the Raa space is where you truly are independent by nature of your relationship you you’re licensing the ability to do business at Major custodians you have Choice whether or not you want to continue to do business with them versus in the corporate IBD space you’re kind of you know you know like it or leave it it wasn’t that it was an employment status change not a not a operational or client experience change so that’s when the light went off that the ra Space is really where I think you’re you’re given the ability to still have all the major resources of the major massive custodians out there but you kind of are able to control a little bit more of your operating and client experience in a customized way

Corey: nice yeah I I tell financial advisors

The difference between FINRA and SEC

Corey: all the time there’s a humongous difference between what finra and SEC says you can do as an independent business owner and what a really large firm is comfortable you know policing across you know twelve thousand fourteen thousand fifteen thousand financial advisors it’s it’s completely night and day

Alex: that’s spot on most people don’t realize that right most people are frustrated about by the quote unquote doing air quotes here of the compliance rigor and structure and they blame finrel or the SEC you know I mean there are for sure black and white things you can or cannot do right those remain whether you’re part of a farm or your own but a lot of the things people are frustrated with really to your point or it’s the box that these massive firms created to try to figure out how do they manage 17 000 advisors well that that they can’t really have it has to be really tight restrictive often lowest common denominator up so most times people are I’m I’m a big believer that I don’t know finra SEC they’re you know I’m okay being both it’s the firm you’re with and how they um you know put their own policies and procedures in place to enforce or protect against things that Fender and the SEC want you to do they can become you know overreaching or or oftentimes created by lawyers that are risk averse and and you’re just stuck in a box where it’s basically we prefer you do nothing because if you do nothing that’s the least amount of risk and possible and we have to do something we got to serve our clients without a doubt so I still speak with a lot of wire house

Traditional wirehouses vs RIAs

Corey: advisors all the time that say Corey like I’m not going to go to the Ria Channel they don’t have the same tools and capabilities that you know my traditional wire house does I mean you you being a financial advisor in inside of a wire house you being one at a leading broker dealer on the independent side and then you know opening up your own Ria what do you say to that

Alex: I mean that’s just the scare tactic the wirehouses use right so oh we have all and to be honest it was correct 10 or 15 years ago right like 10 or 15 years ago wire houses absolutely had a monopoly on product technology client experience but I mean technology has changed the world it’s changed our industry too I mean just just think about what a client has access to if they open up a you know a direct Schwab you know investor account or a Fidelity account I mean most individual investors have more access to products in a investment vehicles research technology analytic tools as just an individual investor with a you know five thousand dollar Schwab account then people do with the big wires so it’s just not true and I think that’s what kind of is what Technology’s done and why the artist base is so amazing is that you know I’m using LPL I’m using Fidelity I’m using Ray J I’m using Schwab we’re using Goldman Sachs as our custodians all right so we get everything that those custodians have to offer so I’ve got five times the amount you know um and if one doesn’t have something the other does so I mean it’s just it is it’s so much the opposite you have it’s actually the biggest issues you is how how much more you have than how little it takes a little bit of time uh you know getting your arms around oh my goodness there’s all of these other things that I can choose from you know that’s really the bigger issue is you know the one or two years once you kind of set yourself free spending the time to kind of do your own due diligence and research and everything you now have at your fingertips

Corey: yeah it’s it’s overwhelming to to say the least and Analysis paralysis could could come in the could come really really quickly if you don’t have something if your dog would caught the bus it’s like I need more freedom flexibility it’s like here it is you’re like oh wow that’s uh you know it’s kind of nice when I was only told I could use 10 things yeah for sure um so I mean Alex Newegg has had faster growth than almost any other Ria I’ve I’ve ever seen in the industry it’s it’s truly been impressive I think last year you guys had like nine billion in assets under management if I’m wrong on that number you can correct me come into the firm in in a year I think but yeah what do you think let me back up for a second you know the Ria space is just an extremely

NewEdge Advisors growth

Corey: competitive place now there’s there’s new platforms popping up every single day that have different value propositions they’re all trying to solve different things for for for financial advisors in a different way I mean what has led to the ridiculous growth you guys have had over the last couple years

Alex: well let me first state that what you mentioned is true there are more firms now out there competing really competing right so there are more firms that actually do have value and do have technology and do have something to offer advisors so that’s a really it’s a really exciting time to be an advisor because you have more choice now of who you join and what you need than you’ve had in a long time um our success I think has has been recognizing that there are all sorts of advisors out there that are unhappy and all sorts of advisors need different kinds of and things and we decided to not try to be all things for all advisors and really laser focused on a specific Niche which is kind of already arrived advisors that are more successful you know that are a little bit more Enterprise in nature usually two or three advisors two or three support staff or more if they’re dealing with more complex needs so we focused on those whereas I think a lot of the other firms kind of you know they’ll take not all of them but a good portion of them will go after any kind of advisor and you know that’s where they struggle because it’s hard to be everything for everybody and you don’t need to be everything for everybody right now there’s so many advisors out there pick your Niche pick your value proposition uh and and be absolutely dedicated to it so that’s helped us as we’re focused on you know a specific type of advisor we don’t talk to advisors that we know are outside of that um that’s helped us kind of not waste each other’s time like I talked to an advisor our team talk soon advisor we’ll know within you know 10 minutes whether we’re a good fit for each other and not spend three months back and forth trying to convince each other you know we’re good or not the right fit only to realize like you know we’re probably not and I think that’s that’s what happens I think a lot of other groups are just they’re talking to anybody and everybody uh and um you know they should just be talking to the kind of their core Target advisor group

Corey: yeah and that was an important thing for

Outro

Corey: that question so I appreciate it very much um Alex we’ve known each other a long time I’m so happy with your growth um it’s so awesome to see and um I’m looking forward and seeing uh more to come I’ve been speaking with uh many financial advisors that have been thrilled with with with new Edge so congrats again

Alex: I appreciate it thanks to your awesome congrats to your success student core I know you’ve come from internal to starting your own company and you’re killing it so it’s awesome to watch as well

Corey: thanks so much all right thank you