Modernizing Independence: A Turnkey Strategy for Advisors

Financial advisors desire for independence and having more control as to the development of their own differentiated businesses has been growing steadily and creating a very dynamic industry landscape. This transition is also spawning a rapid evolution in financial services from being a financial sales-driven activity into a diversified wealth management profession.

To better understand this growing business dynamic among financial advisors, we were introduced to a major proponent and architect of this advisor movement, Bill Sowell, entrepreneurial CEO of Sowell Management – a transformational platform for independent advisors to lead the industry into the future. We asked him questions to learn from his unique perspective and experiences in building his RIA and energizing this advisor movement.

Hortz: What was the motivation and reasoning behind making the key transition in your business journey from successful advisor to becoming an advisor to other advisors?

Sowell: Honestly, I never set out to build or do what we have done. I was focused on transitioning my own personal business from transactional to fee-based in the mid-90’s and it was such a new concept it caught the attention of other advisors I knew, so I started helping them as well to transition assets and manage money for them.

Essentially what we created was a TAMP, before TAMPs were a thing. It got to a point a few years later, that using my own experience as an advisor was the guide to what I needed to build out my support to other advisors. My own needs as an advisor drives everything we have built or done because I still ask the same question today, “Is that something I would benefit from as an advisor”.

At the end of the day, I am an entrepreneur at heart, I love building and growing things. To have the opportunity to do what we have done in an emerging industry business model that was in its infancy and to see where it is today, has been a pleasure for me to be a part of. I would like to think that in some small way, we have helped the RIA Fee-based space grow to what it is today.

Hortz: What did you feel were the most important elements that needed to change in the industry at that time?

Sowell: I have always loved the financial services industry, I just did not like the way business was done in the old transactional way of doing business. To be compensated to buy something for someone, then get compensated to sell that same security, just to get compensated again to buy something else for them, just seemed like an ongoing conflict of interest. I never wanted my clients to ever question why I was making certain recommendations.

Back in the early 90’s, one of my best friends ran a very large trust department and everything they did was fee-based. When I started comparing notes about my business and what they did on a fee-basis, it just made sense. No conflict of interest and I benefited when my clients benefited, what a novel concept!

Hortz: What are the key differentiating principles you determined and formalized that are behind The Sowell Way?

Sowell: My business principles in working with other advisors have always been pretty simple and straightforward: 1.) I would never ask anyone to do something I would not do myself. 2.) Is it fair to all involved? and 3.) Does is foster a partnership? If the answer to all three of those is “yes”, then let us figure it out and build a special relationship. I have that same approach to all my business dealings, whether it is an advisor joining our firm, a vendor, or anyone else we deal with. To me, everyone we interact with is a partner and we have the ability to impact each other’s business.

Lastly, I guess it comes from growing up in the South, but a handshake to me is as good as any legal contract. If we agree to something and shake hands, then we have got a deal. Unfortunately, not everyone in the world has that same belief.

Hortz: Why do you feel a growth mindset is critically important and needed by advisors to become the most successful they can be?

Sowell: One of my pet peeves is the tendency for people in our industry to call how they make a living a “practice”. I have always asked “what are we practicing for?”. It is not a practice, it is a business, so let us treat it like one. I love what Jason Inglis, our Chief Revenue Officer says, “the one consistent about advisors is that every one of them are different”, and it’s true.

Not that it is right or wrong, but we look for advisors who truly have a growth mindset and want to build and grow a “scalable” and “saleable” business. If that is what an advisor is looking for, then we are most likely a really good fit. Everything we have built is to support growth minded advisors with systems and technology so they can focus on working with their clients and bringing in new business.

Hortz: What do you see as the secrets to scalability for advisors? How do you grow the “right” way?

Sowell: Growing the right way means recognizing that you have to spend money to make money. You cannot scale and grow a business trying to do everything yourself. There are only so many hours in a day, so they need to be spent on activities that have the highest ROI.

Doing paperwork, researching investments, testing the latest technology, etc. is NOT the answer to growing and scaling a business. So, understanding the value of outsourcing is a critical component to an advisor’s growth and success.

Hortz: How did you go about building your technology platform?

Sowell: With the explosion of FinTech in our industry, you could spend 24 hours a day looking and researching all the technology and you would still not be able to look at all of it. The other buzz word is “integration”. Integrated technology is great until it stops integrating, then you are scrambling trying to figure out when it broke and how much data did not come over.

We felt that having an end-to-end technology platform where there were no integration issues was the way to go. When you do not have to move data from one system to another, you eliminate so many problems and issues. With our FLEX Connect platform, all information and data stays within one system - from digital account opening, to a basic CRM, to portfolio billing and accounting, to performance reporting, to a client-portal with secure information sharing, to portfolio management and trading capabilities, as well as proposal generation - it is all housed within one system.

Another key component is our Service Center, where service tickets are submitted by advisors to our staff so that everyone can see what and when it was submitted, who is working on it, and where is it in the work-flow process. We worked diligently with our technology partners GeoWealth to build out the specifics for our technology platform and workflows. They have been great partners in this endeavor.

Hortz: You work hard to develop your working relationship with advisors into a partnership. How do you define “partnership”?

Sowell: To me, partnerships are essential and a cornerstone to building a business. A true partner is someone who cares about the relationship. It embodies a shared commitment to mutual success and support. For me, a true partner is characterized by a vested interest in nurturing the relationship, recognizing that our collective strength amplifies our individual capabilities. There has to be value created going both directions. I am drawn to partnerships where collaboration is not just a strategy, but a shared ethos driving our journey.

Hortz: Where do you see the financial industry developing from here?

Sowell: I could not be more excited about where the RIA/fee-based industry has come and where it is headed. If you are not on this side of the business, you are slowly dying on the vine. There is an incredible opportunity for advisors who are focused on helping their clients and building strong relationships. Make no mistake, this is a relationship business and always will be.

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The Institute for Innovation Development is an educational and business development catalyst for growth-oriented financial advisors and financial services firms determined to lead their businesses in an operating environment of accelerating business and cultural change. We operate as a business innovation platform and educational resource with FinTech and financial services firm members to openly share their unique perspectives and activities. The goal is to build awareness and stimulate open thought leadership discussions on new or evolving industry approaches and thinking to facilitate next-generation growth, differentiation, and unique client/community engagement strategies. The institute was launched with the support and foresight of our founding sponsors — Ultimus Fund Solutions, NASDAQ, FLX Networks, TIFIN, Advisorpedia, Pershing, Fidelity, Voya Financial, and Charter Financial Publishing.