How Empowered Advisors Build Better Businesses with Jeff Gonyo

Let's jump right in. Give me some key factors that attract top advisors to Steward Partners, especially those coming from traditional wirehouse environments.

[00:00:29] Jeff Gonyo: Yeah, I think, and if you had a chance to be around the symposium, I would say one of the things that you'd feel automatically is a different energy. And where that comes from is people being happy where they are, people feeling like they have a vested interest and a stake in the company they work with. So I think with the key advisors or with the advisors that have come over, especially from the wirehouse firms, I think that Steward is unique in the sense when you look at the RIA landscape, we've built the firm primarily based on bringing over wirehouse advisors. That's the background and DNA that Jim Gold, Hy Saporta, myself, all have shared as we've built Steward out. And what we understood, I started at Merrill Lynch early in my career as an advisor. I was at Smith Barney. I was a branch manager at Morgan Stanley.

So we understand what that path is, what the trials are. And we listen to people coming over what they want, what they need. And generally what advisors are telling us is they want their business back, right? They want flexibility in how they can grow the business. They wanna recapture that entrepreneurial spirit.

And what Steward really does is is we break open that box and the landscape of what the wire world has become. Which is still very much top down driven. We really take a bottom up approach. We want to celebrate the advisors as they come over and understand how to support the business they build.

I often say your business is our business, in the standpoint that you're our client. And that shift in itself is really empowering. What Steward has done, I think different than most, and it's how we started the firm, is building a bridge to independence. For some people leaving a wirehouse, going to a model where you have to do everything entirely on your own is maybe a bridge too far.

And we found a way to really create a full service, and fully supported independent model for people from a wirehouse world. Compensation's easy to understand. The platform is broader, the technology is different. What you can do from a standpoint of marketing and media and having a podcast like this generally isn't acceptable at big firms like that.

So we're really helping people branch out, become who they are, and reimagine their business.

[00:03:06] Doug Heikkinen: Being happy where you are is really important. There's a happy vibe here and there's a t-shirt booth down at the bottom of the stairs that's highly trafficked, so people are really excited about wearing their brand, which says a lot.

[00:03:22] Jeff Gonyo: Yeah, everybody's having fun. What makes Steward unique and special is, and I know we're going to get into equity a little bit. Everybody coming here is empowered and feels like they have a stake in this game. They're owners, and that's really different. All of our name badges have the jersey number of when they joined and, for people listening, what that is, when a new partner joins, a new FA joins, they get a jersey number based on the number of advisor they are when they come over. So it becomes a really big talking point. There are t-shirts being made of that and people are really proud to wear, it's like a badge of honor and courage and partnership.

[00:04:06] Doug Heikkinen: And you're handing out more tonight?

Tomorrow night?

[00:04:08] Jeff Gonyo: Yeah. Yeah. tomorrow night is going to be our award ceremony and so everybody that joined in 2024 will get their jersey. It is the most fun thing we do, and we do something that extends beyond advisors. Even our client administrative managers or client associates, once they've been with us for five years, they get a jersey too.

So this is unique in the sense mostly this is an event just for advisors, but you got the whole organization here and it's a lot of fun.

[00:04:39] Doug Heikkinen: Okay. Back to business. Can you walk us through a typical transition process for advisors moving from a wirehouse to an independent advisory model at Steward Partners?

[00:04:50] Jeff Gonyo: Yeah, it's the most important thing we do. I tell people all the time, if you opt into becoming a partner at Steward, we don't like to recruit people. We want to educate and opt into becoming a partner. And for us, that's a different level of care, right? We don't have 15 or 20,000 advisors to fall back on if it doesn't work.

And moving a business is one of the most important decisions you're going to make in your life. So we've really done a terrific job honing in on that. We've built a 10 person transition team. We also leverage the custodial partners we work with. So you got an army of people around you from, generally it's an eight to 12 week process once you've decided that you're going to join and become a partner, where we cover everything from A to Z. There's not a single thing that's going to get missed from legal support, to understanding technology, to making sure we have everything right for your team, mapping of securities, lending, you name it.

So it's a very detailed process. And what we like to do is make sure we communicate with those partners, Hey, this is going to be your responsibility. These are the things we need you to help us do, to be prepared for you, and here are all the things we're going to do for you behind the scenes. So there's a really clear roadmap of what they're going to need to do, and there's a lot of accountability with each other to make sure we stay on track with that.

So we're generally with those teams, like I said, anywhere from eight to 12 weeks. Sometimes it's longer if we have to blend in real estate with that. But then day two, it doesn't end, right? So day one you come over. Day two is going to be when everything happens, that transition begins. And that's where that team of 10 people at Steward, onboarding specialists, really comes in and connects the dots. So we have a commitment to stay with those folks as long as they need. Generally it's about 60 to 90 days, and with the process that we've developed, electronic signatures and just all the other things that make that different than it used to be. I would say our average team is bringing over about 90% of their assets within a 45 to 60 day window.

[00:07:11] Doug Heikkinen: And I imagine that process that you have for somebody making the transition is constantly being evaluated and improved.

[00:07:17] Jeff Gonyo: It's being evolved and the most important thing you can do in this business is continue to learn.

And so every one of those experiences matter. And we learn from all of them. And so it makes a difference and I think you can evolve, but you have to be able to execute. And we do both really well.

[00:07:40] Doug Heikkinen: You're known for your equity ownership structure. How does this model impact advisor engagement, retention, and the overall culture of the firm?

[00:07:50] Jeff Gonyo: We talk about three things at Steward often. We talk about growth. We talk about optionality, and we talk about culture. And the culture piece, the flexibility of platform, giving people the ability to be autonomous in their business and really open that up makes a big difference.

All of that matters, transition. But the equity piece is the part that really aligns us. And from our board of directors down to our client administrative managers, everybody who's a full-time person at Steward Partners is an equity owner. So it's the hallmark of what we do. It's the glue of what we do.

And anecdotally, just a terrific story from this session already. Monday we took our top 10% of advisors and we sat in a room. We talked about, Hey, what do you need to grow? How do we help reinvest in your business so you can get from here to there? And one of the amazing things that came up out of it was, and this is one of our newer advisors who said, listen, I'm an equity owner.

I care about the growth of this firm, but I want to learn from all of you. And so one of the things that we're doing is we're going to have a shared site where people can download and implement all of their best ideas and they can work with each other and off each other. I could tell you in my experience at Morgan Stanley or any of the wirehouse firms I was at, the general consensus is the person next to you is your competitor.

They might be your friend, but not necessarily your partner. So I think that's very different and the thought process comes in, we all have a vested stake in this business, so your growth is my growth. My growth is yours. And the impact point is around that equity piece.

[00:09:44] Doug Heikkinen: What strategies are you using to attract and develop the next generation of advisors, which is really important.

And how important is mentorship and the succession planning in your approach?

[00:09:55] Jeff Gonyo: Oh, it's huge. One of the things we're really proud of, we have about 285 advisors at Steward as it stands today. And last year, somewhere close to 25 people graduated from being a client administrative manager to an FA. And that takes a lot of work.

So we focus on development, we focus on a lot of best idea sharing as we talked about earlier. And one of the things that we do is we don't silo people, right? There's a place where you can start out as a entry level CAM, and you can work into a wealth manager, client relationship manager, you name it.

So there's ways to grow and graduate up in that process, to eventually you become that relationship manager. We have a really big epidemic in the industry where there's more 75 year olds than there are 35 year olds in the business. And so having that kind of a mindset has attracted younger advisors and partners to us.

Our average FA age here is about 52 versus 62 to 64 in the business or the industry. And I would say the other things that we do is we embed councils throughout the firm. So we have marketing councils, we have a next gen council. We have people that talk to us about how we can help grow the firm.

And, you can't be generational managing somebody's money unless you're generational in your team. So our systems, our processes really lend to that. I think people want to interact differently today than they used to. And I think that's a trend that's going to continue. And with, when I think back to the equity piece, bringing that around to here.

What a lot of those younger folks in the business are looking for is a path forward where they can be supported and they own something bigger than themselves. Having equity really solves a lot of those problems, and it's the thing that drives them, incentivizes them, and they become part of that bond and the glue.

[00:12:02] Doug Heikkinen: How are you seeing the expectations and needs of younger advisors differing from more experienced professionals, and how are you guys adapting to those needs?

[00:12:13] Jeff Gonyo: So we had a conversation about this earlier in one of our sessions this morning, and what came out of it is, oftentimes, and we look at some of our competitor firms, they're bringing in young people.

There are a lot of CFA programs out there, a lot of CFP more people are becoming CFP and CFA every year than years past. So we do see that happening. But it tends to be inside people. It tends to be just the planning person or just the person who's going to work on the investment model. And I don't think a lot of firms are getting behind the idea of really developing the relationship piece and getting out there and learning how to bring money in.

So a lot of our development mentorship fosters that. We want both. But we, I do think that's something that has changed. The other thing is, a year and a half ago, we launched our M&A division, which I think is really important. There's, the other thing that's happening out there, because the average advisor is 62 years old, is they're looking to monetize the business and that G2, G3 generation can't afford it.

And oftentimes when they're going to different firms, those firms are going to be very prescriptive of, Hey, it can't be your brand anymore. It has to be this model. So they lose their identity in that process, and I think they lose some of those people. So for us, we open that up. Again, it's about celebrating who you are, the brand you built, the models that you want to develop and work with, and it gives us a chance to really integrate that G2 and G3 team and empower them to do a lot more.

[00:13:54] Doug Heikkinen: Everybody knows the significant wealth transfer is coming in the next decade. How is Steward Partners preparing both advisors and clients for this transition?

[00:14:03] Jeff Gonyo: It's going to be massive. The things that we think about all the time, is how we can create more efficiency in the business so that we can grow and keep that culture intact.

All the things we talked about earlier. So we've created our own technology team here at Steward. One of our partners, Mohan Gurupackiam, who leads that team up, has run technology for firms like Satera and E-Trade. He's built a team of 10 people around him. And what their charge is is, how do we solve for all of that?

We've become a multi custodial firm where we work with Raymond James, Pershing, Schwab, and Fidelity. How do all of those things interact? Because if you're a client and you've been with Schwab for years, you might not want to change to Fidelity, or to Raymond James or to Pershing. So what we've really done is make sure we can meet people where they're at, develop tools, systems, processes to create, number one, a universal experience and a good client experience, and bring that together so we can meet people where they are.

And embedding AI into that is really important as well. Some of the things our advisors will tell you is, listen, it's hard to get in touch with a client at 10 in the morning or during the day. They might want to interact differently at night. And we want to have AI tools that bridge that gap and really help support that service model.

It's different, it's evolving, and technology's going to be a really big part of that.

[00:15:43] Doug Heikkinen: How do you see the wealth management industry evolving over the next five to 10 years, particularly in terms of advisor independence and client expectations, which are rising?

[00:15:54] Jeff Gonyo: It's a really great question. The business, if you asked me 11 years ago, would we have a channel that specializes in M&A and buying practices, I would've told you, you're crazy.

I would've said no. What we're doing is liberating people from the wirehouse and we're giving them a way to own their business. And in that decision, we're not taking that away so much with the M&A that we're doing. We're basically saying, Hey, you're trading in your, business for our business, which is going to grow much faster.

The reason I think that has an impact is because that is the biggest phenomenon happening in our business right now. When you look at the RIA space, it's a massive consolidation that's happening. It's going to continue to happen. It's accelerating, and what we've seen is, teams that may have left 10 years ago and had a $2 million practice now have a $4 million practice.

But they're getting stuck in doing all the things that they don't like doing, which is dealing with HR or dealing with the SEC or FINRA, or having to create their own tech stack. It's become expensive. It's cut into the margins. It takes away from their time in building the business versus getting new clients.

And, so one of the trends that we're seeing is in the RIA and independent space, although we historically have been a destination for breakaway advisors from the wires, we're becoming really attractive over here. We've spent a lot of time building our team out. We've put a lot of money into infrastructure, technology, our product platform.

Building out multi custodians. So I think for folks in the RIA and independent space, even the wire, what we can offer is solutions to all of those problems. We have the infrastructure, the people, and we have the capital to continue to grow. So there is a movement back towards a W2 model, versus just everything being 1099 or solely independent on your own.

[00:17:58] Doug Heikkinen: Last one for you. What advice would you give to advisors considering a move to the independent model, and what should they look for in a partner firm like Steward Partners?

[00:18:09] Jeff Gonyo: Yeah, I think you really need to figure out what your purpose is and what the vision is, right? I think the mistakes we've seen for people that have gone independent, is underestimating all the things I just talked about.

HR benefits haven't gotten cheaper. Dealing with real estate on your own hasn't necessarily gotten better. But the SEC, FINRA, dealing with compliance, and also I think just keeping up with technology. Has become hard. It takes capital, it takes time, it takes people. And so if you're thinking about making a move to independence, there are some people that are terrific and have that entrepreneurial mindset where they really want to dig in and do all of that on their own.

That's great. And for many others, they're just looking for a better way. So I would say make sure the firm you're looking at can support all of those things. I'd say make sure the firm that you're speaking to, are they going to celebrate your brand or is it going to have to be prescriptive? I would say make sure that you understand the technology support in their vision for the future, how an AI is embedded into that.

What their philosophy is, and what that culture is. So it's really taking a look at everything we just talked about in this conversation. And, again, what is your ownership stake in that look like? Because it's a big deal. And for us, it's been the reason people are happy here, creating culture and creating value for each other.

[00:19:51] Doug Heikkinen: Jeff, thank you so much for joining us.

[00:19:54] Jeff Gonyo: Thank you, Doug. It's been a pleasure.

[00:19:56] 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.