Helping Advisors Live Their Legacy with Scott Danner

 

Today we talk with Scott Danner, EVP and Head of Legacy at Steward Partners, about helping advisors transition their practices while preserving what makes them successful. Scott shares how Steward approaches M&A with empathy, flexibility, and a focus on culture fit—offering both sell-and-stay and sell-and-exit models that prioritize continuity, relationships, and advisor freedom.

Scott also discusses the firm’s commitment to developing next-gen talent through mentorship, hands-on training, and modern tools that simplify complex planning conversations. He explains how Steward uses digital marketing and video to engage younger investors and enable multi-generational relationships. It’s all part of helping advisors live their legacy—not just leave one.

Resources: Steward Partners

Related: How Great Firms Stay Great While They Scale with Charlie Johnston

Transcript:

[00:00:02] Doug Heikkinen: This is Advisorpedia's Power Your Advice podcast and I'm Doug Heikkinen. We're at the Steward Partners Annual Symposium in Orlando. And we're here with Scott Danner, the EVP, and Head of Legacy now at Steward Partners. Welcome to the podcast.

[00:00:17] Scott Danner: Thanks for having me.

[00:00:19] Doug Heikkinen: So Steward Partners has been active in M&A. . .

What distinguishes your approach from other firms in the industry, particularly when it comes to integrating new teams and preserving their unique cultures?

[00:00:29] Scott Danner: Yeah, I think there's two things that stand out. You know, number one is it's nice to have sat on the same side of the table as everybody that you're talking to.

So we obviously have been doing this, whether it was at Freedom Street prior to coming to Steward or now, we've been doing this for almost a decade. Of buying practices, transitioning practices, and developing that next generation talent. So today, when we sit on the other side of the table from someone, I'm sitting there knowing what that person has been through, how they're doing, what the process is, how they're doing, what they're doing, and how we can better empathize and understand what that process is. And I think that's one of the things that really stands out. The other thing that stands out is we really want you to continue to do what makes you great.

So what we're not trying to do is we're not trying to blow your business up and then develop it into something different from there. We're trying to accentuate and add value to what you're already doing. Not the other way around. I think that stands out in the market right now.

[00:01:27] Doug Heikkinen: Yeah. Continuing on in your experience, what are the most important elements to consider during an M&A transaction to ensure both the advisors and the client's interest are protected for the long term?

[00:01:40] Scott Danner: Yeah, so the first thing and the most important thing is culture fit. At the end of the day, you can say it until you're blue in the face, but people are going to chase a transaction and they're going to chase money. Some people are going to throw money at you. The reality is it's all about the relationship.

It's about your relationship with your clients, the continuity that you're presenting to them, and it's about the relationship you're building for the future. Even if you're transitioning out of the business, it's really important that when you go to the grocery store and you bump into one of those long time clients, they think that what you did is the best thing that ever happened to them not you. And that's a really important factor.

[00:02:16] Doug Heikkinen: So with nearly a third of all financial advisors expected to retire in the next decade, that's a lot, and most lacking a formal succession plan, what are the biggest obstacles preventing advisors from planning their succession? And how does Steward Partners help them overcome these barriers?

[00:02:32] Scott Danner: I think the biggest challenge is themselves. We as advisors, and I've been on this side of the table as well, overthink some of this, and the reality is, in order to actually make that step, we have to plan for ourselves. And so many advisors are so busy doing it for their clients that they forget to plan for themselves.

The second big thing that's really important is next gen talent. And the way that most advisors came up in the business is not the way that most advisors are coming into the business. So there's a major gap. The last point that I think people forget is it's generational. So you have baby boomers who have outnumbered everybody and they're the generation that are leaving, while Gen X is a much smaller generation behind them, and millennials now outnumber everybody. So the reality is there's still a little bit of gap in experience that's needed. So this epidemic or challenge of next gen talent taking over needs to create an environment, we need to create an environment of training, of teaching, of education, and kind of helping to bridge that gap. And once we do that, it's going to make a much, much easier transition over the next 10 years. Steward is doing that by our training programs, our next gen talent, our, we call it Steward Assist, and we're developing this next gen talent, but we're also helping transition with grace.

[00:03:57] Doug Heikkinen: Can you share how Steward Partner succession and continuity planning model creates peace of mind for advisors, their families, and their clients? Any stories you can share?

[00:04:07] Scott Danner: I think it's all about freedom. Everything is about freedom and the stress that you have of knowing that your clients have to have a plan that continues.

You're not building a plan for your clients. So I'll start with the client experience. We're not building a plan for our clients that just dies with us. And we want it to be forever. As long as we have planned for them, we want it to go on and continue. So the first thing is the peace of mind of continuity.

There is a freedom that goes with that, knowing that things will continue the way you've planned, for you, for the client. The next thing is, it's not awful to know that you have monetized a little bit, and I think a lot of advisors wait to live their legacy by selling and then leaving. But we wanna help them live their legacy.

They don't have to sell and exit. Some can sell and stay and transition on their own accord. These are other ways that you can have a little bit more freedom within your world. And last, you know, the storyline, I think it's, it's, we had an advisor who came to us and had some health issues and needed to be out in six months.

And when you're going through chemotherapy and all the radiation and your family is the most important thing, for someone else to prioritize your business and your clients is a major sense of freedom and I really hope that most people don't have to get there to feel that level of freedom.

[00:05:32] Doug Heikkinen: Many advisors are deeply concerned about who will carry on their legacy. How does your legacy division structure deals to ensure that an advisor's values and client relationships endure after their retirement or exit, just like you were saying.

[00:05:47] Scott Danner: Yeah. I think the most important thing is we do two things.

We do a sell and stay and a sell and exit. So the first thing is that we identify what is your goal? We're not trying to fit you into our little basket here. We're trying to help you understand and help us understand what you need that's most important. So, is next gen the biggest challenge you have in the practice? Is having more freedom to be able to travel with your family. We have to identify what those big rocks are in your life, and we build that out, build that plan to fit and suit you.

The next thing we do is everybody's becoming an equity shareholder here. And I think our equity story you're going to hear throughout the day is really a differentiator. You're talking about something that's going to add value to the future of what you're doing. And all of your next gen are going to be shareholders.

All of your admin staff are going to be shareholders. That's going to allow for something that's really special. And I think structuring the deal to match what's most important to that individual and a continued shareholder and partner in Steward Partners is mandatory for every deal that we do.

[00:06:53] Doug Heikkinen: You have a lot of advisors right now.

How do you keep track of that when it's their legacy ideas? Now they become our legacy ideas. How does that work?

[00:07:08] Scott Danner: So it's really important to just make sure that we keep relationships. Our goal is to build the relationships that have a continuum. We're going to continue to build those relationships.

That means we gotta stay in front of you. We have to understand what's going on. We have a team in Steward Partners in our legacy division that helped the servicing of these plans. We have a transition team. We have divisional vice presidents and presidents who are serving these individuals and staying in front of them.

Our DBDs, we call them, our branch managers, they're out there in the offices understanding the structure. And I think by staying out in front of people and keeping the relationship as the main thing, we're always going to be able to serve them the way that they came in. Yes, there are different versions of how people came in, but if we keep them as the most important part of that, the relationship, their clients and their relationship, we're going to continue to serve them well into the future the way that they need us to.

[00:08:03] Doug Heikkinen: You started talking about the next gen and the industry is facing a huge talent pipeline challenge. Which strategies have proven most effective in attracting and developing the next gen of advisors, and how do you see technology playing a role in that adoption?

[00:08:17] Scott Danner: Yeah, I think first of all, start with technology. I think technology is enormous. One of the most important things is to simplify things that we can do so that the relationship is the most important thing. You're going to hear me say relationship a hundred times, but it's what makes our experience as advisors special.

So the first thing you have to do is you have to develop that relationship with the next gen advisor. And that next gen advisor needs to understand what makes you and that client have that special connectivity. So it starts with what, you asked what's most effective. What we find is most effective is having someone come in and really be a client relationship manager from the beginning.

They learn from the ground level what are the admin roles that, how do you enter a check, how do you put a note in, like all the basics. But then they're mostly learning the relationship building. They're sitting in on appointments, they're developing as a relationship manager to develop the client relationships.

Then they're becoming lead FAs. But you're guiding them through the process. Not the traditional process we were used to in the old days where we just said, go build a book. Go knock on doors, go cold call. That's not the way people are coming into the business today. So the first thing we have to realize is that's not the way it's going to be successful for the next generation.

We have to change what we're doing from the old ways to the new ways, and that's education, that's wisdom, that's teaching what works and building those relationships.

[00:09:45] Doug Heikkinen: Speaking of the old ways and the new ways, managing clients' assets 10, 20 years ago is very different than managing them today. So how do you help next gen advisors balance the adoption of new investment approaches such as Alts, digital platforms, while maintaining the core values of client-centric advice.

[00:10:05] Scott Danner: I think when you build a portfolio based around, again, the relationship, the same way we build M&A opportunities for our advisors that are selling their practices, is the same way we build portfolios for clients.

And that is we develop a relationship with them, understand the most important thing about them. So if I'm teaching next gen advisors. I have to teach them to understand the most important aspects of the client, of the relationship, of their family, and we build the foundation of those portfolios.

From there, there's always the ancillary asset classes that will change from time to time, but the alternatives and, all the cryptocurrencies and all the things that are now more popular will come into that. But if you build a strong foundation on planning, on relationships, you're going to find that the easiest part is the ancillary extra stuff. And I think that's what we're doing.

And then you build some guardrails in there. We like to use Riskalyze, which is now Nitrogen. It helps with risk, it helps understand, help the next gen advisors really understand balancing risk and reward, and it helps the clients kind of see the simplicity of risk. I mean, when I started 23 years ago, you were asking a client about risk and it was like, are you low, medium, or high?

[00:11:21] Doug Heikkinen: Exactly.

[00:11:22] Scott Danner: And and no matter how many times you asked them, they always were medium. Except when the market went down, then they were way way low risk. And then when the market went up, they were like, we're high risk. And so you were constantly balancing that. We're not doing that anymore. We're taking that we're using technology to an earlier question to help balance that risk and provide guardrails to next generation advisors to help them grow.

[00:11:46] Doug Heikkinen: So millennials and Gen Z are going to be very different and they're seeking financial advice earlier, many of them, and differing than previous generations. How is Steward Partners adapting its services and marketing to meet the expectation of the next generation of these savvy investors?

[00:12:02] Scott Danner: So with marketing, I think it's very, very easy. And that is where is the next generation grabbing their news, their information? It's social media, it's LinkedIn, it's Instagram, it's TikTok, it's YouTube. It's really important that we meet them where they're at. So what we're doing at Steward Partners, and we pride ourselves on our marketing, on the branding, on meeting the clients where they're at, no matter what age, no matter what generation they're a part of.

So our goal is to really build something, continue to put out content, continue to meet them where they're at. Several of our advisors have YouTube channels and do stuff on social media on a regular basis, but it's about educating. I think this next generation really wants to be educated and then come into the relationship. And so they can do that from their own homes and they can learn. And then the last point is we do a ton of video marketing. We create series and this is a way for multi-generational sharing. Nothing's worse than your grandparent coming in and saying, you need to talk to my financial advisor.

I was literally at a funeral the other day. And, one of my best clients passed away and we're having this great conversation with a couple of their ancillary family members. And someone comes in and introduces me to their daughter and son-in-law and says, you need to meet Scott. He's going to be your advisor. And while it probably wasn't the place, probably not the environment.

What we like to do is we like to create videos and marketing materials and things that when we're sharing with them, they can just forward it to their next generation. Let me share something that Scott's doing that might be viable to your life so that now you can decide if Scott's the right person for you.

Not me just telling you need to work with Scott, which doesn't work for parents or children.

[00:13:54] Doug Heikkinen: You know, the sharing thing's incredible. You wouldn't believe the communication I do with my son who's 16, sharing him Instagram things, just little nuggets for him to just look at. And sometimes he does and sometimes he does it, but he loves them all.

[00:14:06] Scott Danner: Yeah. My, I think I share too much, so I understand that a hundred percent. My boys, I share our humor and then I share serious stuff. One thing I did when they were really young is when they first got on Instagram, I went on before they were able to use it on their own, and I followed all the people I wanted them to see in their feed.

And so I continue to do that today. If their phone is laying around, I'm grabbing their phone and I'm putting something that's positive. Something that's going to elevate their life, something that's going to educate them. That's our job as parents. Sometimes we have to slide it in there.

[00:14:38] Doug Heikkinen: It is. Last one for you. So looking ahead, what are the biggest opportunities and challenges for advisory firms and serving multi-generational clients? Because they're passing on, the new ones are coming in, and how is Steward Partners positioning itself for the future of advice?

[00:14:54] Scott Danner: I think it's a great question and I think we've actually covered it here.

So I'm going to reiterate a couple of points. Number one, from mergers and acquisitions, being a leader in the space to help with succession, catastrophic risk, and the next chapter of this epidemic of advisors retiring this 10 plus year, exiting of our industry is going to be really, really important. And we are in a position to help that next generation by educating, by understanding what they're going through and being a leader in the market.

The second thing that we have to do is bridge the gap between next gen advisors. That means that we can't just be focused on who's retiring. We have to be focused on how we're building the next generation and Steward's doing both. We're developing next gen talent and we're developing the relationships we need to help people exit with living their legacy, not just leaving one.

[00:15:49] Doug Heikkinen: Scott, it's been fantastic. Thank you so much for joining us.

[00:15:52] Scott Danner: It's my pleasure. Thank you for having me.

[00:15:54] Doug Heikkinen: To learn more about Steward Partners, please visit stewardpartners.com. We are on all social media platforms @Advisorpedia. Please give us a follow. For our producer, Tory Miller and everyone at Advisorpedia, thank you for listening.