How To Go Independent

An objective source to learn about independent business models

Brandon Day on his short trip from insurance company to $1 Billion firm principal

Sean KernanComment

This is a transcript of HTGI podcast episode 19 (click HERE to check out that show) I did with Brandon Day. It has not been edited to a final draft quality, so please excuse any hard-to-follow passages. 


Sean: Today I'm talking to Brandon Day, one of my business partners for the last four years or so. Brandon, thanks for joining me.

Brandon: Thanks for having me.

Sean: Oh, my pleasure. Well, why don’t we get into it. I want to talk to you a little bit today about how to prepare to go independent or some of the things that people need to think about and consider before they pull the trigger. And some of those things might help them decide if they should pull the trigger but I want to focus specifically on what someone has kind of made the decision on, they're gonna become independent and then not independent yet. How they're gonna go about that, but as a way of background why don't you tell us a little bit about how you got here, both into the industry and then what you're doing before you're independent and what makes you start looking around, etcetera.

Brandon: Sure. Well, I came to the personal finances in 03. It was with a mid-level firm and did have a good experience there. They were good to me. It’s been about seven years later before I actually made the switch to go independent. I recall one of the initial catalysts of why I really started looking around more was the financial crisis in 2008. And really it hit me that a lot of the things that were preached and is called company culture didn’t really come before which in that scenario. And what also really became glaringly apparent was the lack of tools and technology and discretion I would need if I ever wanna do have an exit strategy, or more robust strategy in general to ever deal with other difficult situations and those were not available where I was.

Sean: For background, was this a wire house? Was this an insurance-based firm? What kind is it?

Brandon: Interest-based broker dealer.

Sean: Okay. Some people think about it as sort of semi-independent, right?

Brandon: They definitely advertise that and I’d say yeah, it was semi-independent. It’s probably a good definition, definitely had more liberties than some but it was the stress of that 2008 situation which really put things in perspective of what I didn’t have. In being discretion and bullet trading, the ability to meet is my client's model as opposed to doing things one account at a time, one trade at a time. And when the market is falling off a cliff, you simply cannot call enough people, talk to enough people, hit enough button fast enough to actually do anything. That’s gonna matter for the bulkier clients.

Sean: Sure. So after the worst of the crisis and the fall of await, you know, kind of bottom in early or nine or the timetable that you really started to get serious about looking at the options.

Brandon: I’ll probably say, late 2000s. I guess I started investigating in 2009 if some of these options would be made available to me where I was. And there were some web service given of, “we’re looking at that, we’ve talked about that.” That sort of thing from the technology perspective and other discretion perspective and other items. But I didn’t get the feeling that they were taking those things seriously. And so by late 2009, we all get contacted by recruiters and head owners and for the first time I started entertaining some of those launches and started to educate myself better on what other options there were and other broker dealers and other styles of way to be in this business.

Sean: When you were not construct, your accounts mostly brokers or did you have advisory that just didn't have the full capabilities? Or what was your set up?

Brandon: It started out as a lot of us do, virtually all brokerage and by that time in 2008 I had been starting to convert my book that was probably approximately 20% advisory to 80% brokerage but the constraints on these broker dealers versional advisory didn't really allow you to get beyond a very vanilla one-at-a-time approach. It was very restrictive.

Sean: Gotcha. And tell us a little bit about the due diligence process, how you determined what firms you’d consider, how did you know about your choices and start to think about a move?

Brandon: Initially, the firms I looked at most closely were other interest-based broker dealers since that's what I was familiar with. That’s what I naturally gravitated toward. And I did like the idea of, if I was gonna make a change, going from semi-independent to completely independent but I was so much going back and forth or if I was truly ready for complete independence. Certainly the broker dealer I was with always tried to paint a picture of independence that was complicated than it actually was. So they certainly had a vested interest stereo way from that. It was actually a colleague and advisor who would intern for me and then I’d mentored some who’d left and actually gone on to independence and it was through him, that he got me to meet with a recruiter for an independent broker dealer. And it has been a lot easier than I was initially led to believe. So it was funny someone I’d mentor, they’d actually help me to broad my horizons and look at something as an interest-based broker dealers which was my comfort zone at the time.

Sean: Nice one. Your mentors pays off.

Brandon: Yeah in this particular case. They have a big push into why I ended up where I did.

Sean: Okay, and then how long did it take you once you sort of start to talk to this outside/other firms. Give us a sense of the timeline and process you went through in nearing down, how many meetings, what did you do to make the decision and how long between when you made the decision and when you kind of pull the trigger to go independent and kind of walked through that timeline and the activities you were taking on and what you were thinking.

Brandon: By summer of 2010, I’d gone from taking 3, 4, 5 launches with various recruiters just doing some basic due diligence to actually starting to go into secondary and tertiary meetings and start to dig a little bit deeper. I still had at the back of my head that I might use an offer as leverage to negotiate with my current broker dealer. However, it was also in the summer of 2010, that’s when I was introduced to the independent channel recruiter for the first time. And once I had a second and third meeting there, it became very apparent that the co-structure was so significantly better and the tools that were available, discretion available etcetera, there was really no comparison. No matter, once I put things into a spreadsheet and broken down, there’s just no way from the existing place where I was to ever come close to what I could do if I was independent.

Sean: Right. Did you find it was similar with the numbers you saw from I guess other similar insurance BDs, or were they all fairly consistent?

Brandon: There’s definitely some better than others. I can think of one in particular. Definitely coming in at a nice margin better than where I currently was but it wasn’t a slam dunk. It went when I looked at the independent channel and ran those metrics that the margin was so wide. There was no way for it to ever be closed once you understood the numbers.

Sean: I remember, I wish I’d say that mine’s different. I did that same thing. When you first come to that realization I had this thought that I’ve got to be missing something because this is so obvious, why is anyone, it’s kind of like, why doesn’t everyone do this?

Brandon: Yeah. It’s one of the things that’s happened to you. I was a spreadsheet person, whatever your way of doing researches but once I put them side by side and then the margin was so wide so I re-did the calculations to make sure there wasn’t wrong or something but no, I’ve really been given up that much money for this many years. How much money have I paid them? And how much have I gotten in return? The return on value was not what I recall fair.

Sean: And you pass this there’s probably some benefits to training and etcetera. But that was long in the rearview mirror that point in your career.

Brandon: Absolutely in the first three to four years in the business, there was a lot of things that those types of firms can offer but at that point, if you’re progressing well, their value diminishes and then accelerate it right.

Sean: Agreed. So how long between when you had that final, “okay this is the firm” I think you kind of described that. When did you make the move and tell us a little bit about how that went.

Brandon: I hadn’t noted down to this independence and I still have one interest broker dealer kickin around. I just wanted to make sure I had more than one option and it was pretty much I’ve made up my mind but I went to home office, due diligence meetings to each broker dealer but I knew, I think I’ve made up my mind before I went but sure enough the due diligence meetings that I went to the independent just really solidified things in a way that there was no more decision process. That was in November of 2010. From that point.. Actually, excuse me, that was in October of 2010 and then from that point once I was dead solid on, my days are numbered at my current broker dealer. Everything switched to how do I prepare for this transition. I made my actual transition in mid December of that year but in between the time I had made my decision versus me actually resigning, I did a lot of due diligence on where’s my office gonna be, what are some of the things I need to do in the first three months, six months. Really tried to map out what it would look like and have a plan but the good part of the plan was the good transition of the clients. Without the good transition of the clients, really, the other part of the plan falls apart.

Sean: Yeah. It doesn’t matter how great the firm is if you don’t have any revenue to bring to.

Brandon: Exactly, so I interviewed various people of this independent advisors to be my compliance officer that didn’t have my serious 24 as of yet. I intended to get it but I did not want to get it in the first 90 days, I wanted to focus on just transitioning the book.

Brandon: So those people who would say then you’re not really independent if someone else was supervising you. I know we know that a lot, we’ve heard that a lot. What was your thought process that led you to a different conclusion?

Brandon: Once you understand what supervising actually means. And what it means with this independent firm. Maybe with some firms supervision might mean really telling somebody how to do business. So then there’s a supervisor/business manager/sort of a boss branch manager. In this particular scenario, this is just somebody literally standing off on the compliance piece. How you do your business. What type of business you like to do. If you wanna be advisory, broker, the mix, focus on a case, whatever your mix is, that’s your business and they have no say on it.

Sean: And also, you get to pick that person, right? You can do some homework on, “let me talk to other people you supervise”, get a feel for I cannot work with this person, I’m not gonna trust them, oversee things away. I think it’s appropriate.

Brandon: Absolutely, you get the chance to interview multiple people for this role and what I did was whoever I decided to have/take this role for me, we wouldn’t have to put something to pay after twelve months. If I get mine as soon as 24, I can branch off and do it my own. No questions asked. So I wanted to make sure there was no issue about if I wanted to part from that relationship.

Sean: Gotcha. Good. And then I know you have to be careful for me in illegal standpoint because every advisor has to decide from reading your contract and giving legal counsel, how to go about that appropriation, what they can and can’t say, what they can and can’t take, the short answers, you know, if you wanna be safe take nothing. You have to be very careful about that. It’s more about how you communicate with your clients beforehand. Do you have any thoughts or do you want to describe how you went about preparing for that?

Brandon: Sure. The 20/80 rules where I started were probably eighty percent of your revenue comes from your top twenty households, so that’s where I started my targets prior to resigning and my goal was to try and meet with either in face or conference school, have a review or meeting or something, whatever it is but make sure I get a good feel for where they're at, trying to make sure that I have shown some recent value. And also if the situation seem appropriate, just float out a hypothetical that (there might), there are some tools that might lead to your benefit that I currently don’t have and if I ever did make a change, just know that that would be to procure those type of tools that would have been an enhancement to my ability to serve you. And just letting them know that the relationships with me and if I ever did make a change, it’s because I want to have the ability to do my job better. As you mention from an illegalist perspective, never would mention where I was going or timeframe or anything like that, really just more of a hypothetical. People are very easily good at read between the lines.

Sean: Gotcha. So does that bring out many questions or the people just kind of nod knowingly when they understood that? Or how do people respond to th


Brandon: For the most part, very well. And most part they would say “I understand it” and they would reaffirm that their relationship is with me, not to some name I adore. All of them, except for one, had disclosed. Before they came to me, they followed an advisor through three transitions and then they came to me and they just, that was more transitions they wanted to do in the six-year timeframe which I can understand.


Sean: Just bad luck for you and for them I guess. But it’s understandable.


Brandon: Certainly you’re not gonna win them all but that’s also why I think it’s great to do the due diligence. To get a feel for who you think you can count on to come with you.


Sean: And did their reactions surprise you or not that much? Did you get anything else in that process or did it surprise you going into those conversations or were you pretty, I would assume that kind of reinforced your plan but anything surprising?


Brandon: The only thing I found surprising is they discuss things with some more clients, the relationships that I cultivated which reversely I didn’t have the book handed to me so I cultivated everything. There was occasional going my way but those clients have been with me for two plus years. In general all have a very positive response, there was a small handful of people that have been with me especially they’ve been with me for less that twelve months. There were some pushbacks, which wasn’t all that surprising. I was hoping for a different response from a few but I understand that they just don’t move from one place to me and then four months later I’m telling them “Hey, we might do something else.” Bottomline is if somebody’s been with you for more than a year and you’ve been servicing the client correctly and doing the right thing by them, the response is very very good. There’s several that’ve been with me for less than twelve months that did come with me but there was of those that didn’t come with me. They were pretty much all in that under twelve months timeframe.


Sean: Yeah that makes sense I have a couple of those that sit back and one in particular ended up coming later but in fact I think the rollover check was in the mail when I left. So it was brand new and I figured that was not gonna be good timing for me but couple of years later she did move but just to backtrack one bit, tell me a little about how you built your business. How did you develop these relationships in the first place?


Brandon: The bulk of the clients other than just you come and get networking and try to meet people in various whatever, gathering you can crash into, but the bulk of my clients were developed through a seminar process not the general seminar process but actually through colleges as where I would teach retirement seminars and  people would actually pay you to attend and then eventually that would often develop into consultation in a way we want. So with most of my clients, I’d introduce myself as educator/teacher/planner as opposed to a broker with a product. That’s why I’ve always tried to maintain my relationships but I think it was helpful the way I cultivated a lot of clients which started out on educational basis.


Sean: Very good. Tell me about the day you pulled the trigger. Maybe that first sixty to ninety days, what that was like? Did you have a big transition team to help you get everything done? What were the wins and losses in terms of what was different? You never know until you pull the plug exactly what it looks like. How did it go?


Brandon: I personally back up one step, I did find a compliance person to team up with and it also was a good situation in that we were able to put some office-based, share some technology bill, that sort of thing, so there was multiple efficiency gained. That certainly was helpful. But in regards to the actual transition, I pretty much did a hundred percent on my own, there was no transition team, there was nobody mailing anything, processing. I did it all myself and I was able to move eighty four percent of my book by myself with no help and write at the hundredth day mark.


Sean: Nice. You’re like younger then though, so..


Brandon: Yeah. That did full disclosure that involve working saturdays, late early, those first hundred days were fast and furious but they were necessary because above all else get the transition move as soon as possible again here and then start moving on the the next phase of your business plan.


Sean: Gotcha. Yeah actually, you could correct me if I’m wrong, but you're kind of a life cycle, your business, I think you’re a lot like me. You’ve Built a foundation but you were still in building mode. And that wasn’t like you just had ten to thousands of spare dollars that you want to throw into hiring full time staffs just yet. Plus you get to know the systems, etcetera, but is that fairly accurate?


Brandon: Yeah certainly. Cost factor was certainly a part of the broker dealer I joined. Maybe I even do have some transition money need to help which was certainly helpful but part of it was just I didn’t know of anybody to help me to that transition process. What would it cost if I would’ve known somebody? If I could go back and change something would I have paid somebody to help me? Yeah I think.


Sean: No sympathy here. Little bold humor there. Okay so, the pretty hardcore move upfront, you can tell the rest of the story to some degree about how you’ve grown your business so we can circle back to things you can do now that you couldn’t do there and even some of our colleagues maybe can’t do depending on how they’re structured. Maybe give us the closed notes from early 2011 to today in terms of how you’ve grown the business, what you’ve been able to accomplish, highlights, lessons learned. The floor is yours.


Brandon: Well. One of the things that I had in the back of my mind that one can be something that I planned on doing early on but I was serious when I look at the trends of the industry. The look at the various insurance-based broker dealers you could look at how many rents they had back in 1990, then 2000 and then 2010 you could see the trend line was very much in downward trajectory. You’re starting to see if some of that in the wirehouse as well is starting to see that trajectory. So the one trajectory that was up in our industry was the independent channel and the one that was really starting to point upward was the RIA or hybrid RIA. So that was something I’ve taken note of and I sure wanted the option to pursue my own RIA or hybrid RIA possibility. So with the first 2011 you’re going by my compliance person I went ahead and get serious at 24. We decide it was in our best interest that we continue to be a team and try to Start To grow that team and so we actually left our executive suite of a couple offices.. And took down a space with eight offices without anybody to fill them.. But the thought of if you personally guarantee it they will come, little bit of a leap of faith there but one thing in my transition I noticed in going through some interview process is that there weren’t a whole lot of, at that time options or advisors or independent advisors to be a part of firm like atmosphere but still have the complete time and independence they wanted. So we definitely noticed that there was an opportunity or niche available. So by 2012 we’ve taken out an office space and we’re becoming experts on things like phone systems and computer systems and everything else. And you wear multiple hats when you start to have a growth model like that. It was fun, it was busy, it was stressful but it was also a lot of new things and a lot of new decisions and it was fun.


Sean: And then you added some staff pretty much, right? Before you moved in, correct? You added some part time people at least.


Brandon: That is correct. We were already looking at space but before we made the move we’ve added a person to split from an administrative perspective. So she helped with my book business as well as my team members. And then she also covered some of the receptionist duties as well.


Sean: Very good.


Brandon: But if I could go back and redo things, really wish I would’ve hired somebody long before I actually was brave enough to do it. I think we all want to make sure that you have plenty of caution and make sure you can afford it no matter what. The reality is, reason why you’re having a hard time getting over a hump is because you’re spilling all of your time doing busy work. As soon as I had a part time assistant I noticed the business flow changed dramatically and my assets and revenue grew accordingly.


Sean: I would echo that and I think you and I had good conversations about we think a lot alike but you gotta be thoughtful about how you go about investing in the business. By far the too big is Expenses for most advisors is usually gonna be Staff and or office space and you know the more straightforward models you just get a lot of office space and you give them Full time assistant you’re off running and.. One of the things that excites me about independence is you can really kind of customize your practice the way you want to cause we’re a little bit of self serving and we could do that for advisors and Help them put that together but we do it on our own and other people can too if they spend the time investigating the options and I’ve always get some opinion and get some staff help before you worry about even the nice office but.. Both can be very very important and you can add on as you see fit.. I’m with you I remember when I moved a year in, someone helped me move but I didn’t really need her as much. I kind of use her to help grow the network and that I was paid off pretty well but, back to your story, sorry.


Brandon: So segway into early 2012 we’ve been in the new office space for few months we’re looking at the, we’ve had a handful advisors join us one of which is in the office, 2-3 others were in other remote office locations. We’re getting a little bit of gross and tryna get a little bit of, you know. We were looking at the hybrid RIA option and what AUM level would make it work and that’s when I reached out to another independent advisor being Sean, you.


Sean: Wow, sounds like a good decision.


Brandon: Well, I’ll take a full credit for the idea.


Sean: Of course.


Brandon: It seems it did work out now I’ll take full credit but reached out to the idea around your AUM members combine our AUM the numbers look a lot more attractive for everybody and what wasn’t there by June of 2012 we consummated the beginning of the murder. Is that right?


Sean: Pretty official by june 1 cause that was the start date of the RIA but Sometime.. BAsically I think the Spring we spent.. Put enough Pieces in place generally speaking or the big pieces at least and be able to establish the RIA.


Brandon: Exactly. Interesting through all that process. It was all these options were available.. There weren’t much in the way of talking to the broker dealer like “can we do this” or “can we do that.” As a matter of fact they were pushing the hybrid RIA idea and helping us entertain and understand it better. But it’s interesting if I think of the broker dealer I came from and most of the other broker dealers I know of for us to have the conversations we were having as freely as we were having them. I just don’t think that would’ve been an option in most of the places.


Sean: Yeah that’s a great point. I don’t think I’d consider that. I’ve been at LPL. I’ve been independent for a year or so earlier but you’re right. That was just a given. I guess that’s a great way to find if you’re independent, right?


Brandon: If you’re truly independent then you can make business decisions freely. So long as they’re within guidelines of course but from that point on, you should be able to run a business like a business owner because if you’re independent, that’s what you are.


Sean: Yeah, that’s a great point. That s a really great point.


Brandon: So here we are, 2012, and seeing that things are gonna actually work out and fast forward a little bit. We’ve certainly had a lot of good fortune and I think we found the right niche at the right time. And having good timing is something I’m not ashamed to say that we had maybe a little bit of luck on our side too. But I guess where we are today, 60 advisors and closing in on by not too far away from 1.5 billion AUM, not too bad over the course of four years.


Sean: Yeah, agreed. Especially we still continue to maintain our own practices as things change and stuff comes up, we have employees come and go in the four year period. That’s probably a whole separate episode of three of us could talk about, how to deal with at least one difficult partner, that being me. And you know, all the things you go through when you have partners and the good things that can come from it.


Brandon: Yeah one thing, it always hits my mind when I gave my resignation leaving to my branch manager general agent from the firm I came from, He had some disparaging remarks, didn’t think it would work out, that sort of thing. He’d then had his firm for 25 years and at that point in time they weren’t even at a billion of assets and maybe nine advisors. And four  years worth 50+ and 1.5 so it’s just the difference as far as what you can do, the freedom you have and how you can realize the business plan is simply there's no comparison between trying to launch an idea like that in the independent channel versus the insurance BD channel that I came from. What we’ve done simply wouldn’t have been possible where I came from.


Sean: I guess you can’t really back on them. You and I are a lot like were gonna build the plan for, if not the worst case, what can go wrong scenarios. I remember as I thought about the career way back when, sometimes the path that you have no idea where that might go.. If you have those open to you, it’s a hard concept really for some people to grasp but you have to .. get the swings to be able to hit the ball. You don’t know what might come up if you don’t have the opportunity even consider them. So I think that concept has been huge in both of our cases.


Brandon: I’d rather have the tool not needed than the other way around. And that’s kind of the whole point of independence is you’ve got this much broader playing field, much broader latitude. You might not use all the tools but as industry changes, as regulations changes, as everything changes, you have maximum flexibility to be able to adapt.


Sean: And on that firm why don’t you just, you know, that’s a pretty good summary as far as I know how you got here. But talk about a little bit some of the tools you’ve used and/or helped build to free yourself for other advisors that kind of demonstrate the capabilities from a trading standpoint, marketing end or financial planning. Some of the things you find are most valuable compared to what you could do at the last place or most of our peers or how they use them.


Brandon: I think our most valuable asset is advisors and for most professionals is time. There’s only one of us so there’s only so many hours. And that became very apparent to me at my last firm. I remember after 2008 I started a little experiment, got a note pad and was doing a lot of rebouncing of a couple things and into something else.  I was actually logging in call to clients, get off the phone, get the notes for their supposed to be, get into their account, make the trade, confirm trade, next call. And then I was keeping a sensible time clock and I went for every single client as doing the sampling of maybe about 20-25 of my book just to understand how much time am I talking, how much time am I wasting, talking about things might decline doesn’t really wanna talk about but I’m required to do cause I only have discretion. And how much time am I wasting feeding button after button after button. That sort of approach also encourages. So segway into bullet trading there’s current platform at this broker dealer, it has a nice bullet trading functionality for advisory with discretion, which is Having discretion is no problem at all. It’s actually pretty standard in our situation. But being able to manage from a model perspective and having a handful models for every situation, assigning those models to various accounts, certainly some clients might have multiple types of models for different objectives but being able to hit one button to rebounce across literally hundreds of accounts and be done in five minutes is great. I think the last time I did rebouncing from start to finish making some adjustments to the models and rebounce button and then send email to all my advisory clients was thirty minutes so I did over four thousand trades and sent an email to every single client using another bullet functionality but got all that done in less than an hour. If I remember half an hour. In my old broker dealer, that same exact task would’ve taken a minimum of two weeks. Assuming I don’t have meetings.


Sean: Yeah, I don’t remember hearing about that process before that. But I could see how quickly you realize there’s gotta be a better way. That’s pretty time intensive.


Brandon: Sure. It’s kind of the same concept of, you know, when maybe you have a long commute and you shoot down start doing some math on how much you’re in the car to and from sitting in traffic and you go, “wow, that’s a lot of my life that’s wasted not doing anything positive.


Sean: Yeah it has to be done but let’s at least look for other ways to do it.


Brandon: Right. So that’s one of the initial keys I know I’ve certainly made it a point of emphasis to explain and help educate and train advisors that have joined our network. And certainly I have given the same bullet points to a lot of people outside the network, I just think it’s a really smart business. You’re putting a tremendous amount of time back into your budget, back into your calendar, to be able to do other more important revenue generating functions.


Sean: What about for the person that says, “Yeah Brandon that’s great but I don’t want to just outsource. I don’t want to build a model. I don’t want to learn the trading system. Why don’t I just use a third party manager type of arrangement.” How would you answer that or end or how did you go about considering those options and kind of passing on them.


Brandon: That’s certainly one way to leverage your time is outsource it to a sort of typical third party manager. My first response would be let’s do the math first off and if you outsource all or the majority of your advisory assets to third party management you’re looking at stratus fee to the manager, you’re gonna look at some sort of administrative or platform fee by the broker dealer. And that’s for your charge. So first off, it’s an expensive option to the client and also the net revenue to your bottom line is also significantly less. So the clients paying high fees and you’re getting a low net. That’s not, to me, an ideal option. Actually I’m trying to train a couple advisors that made that statement of “Brandon, this is great. This makes a lot of sense but I’m just never gonna take the time to learn it the way you are, can you do it for me?” Actually, yeah. One of the things we were able to allow was some success a very very low cost third party manager to some respects but also just handling execution for some advisors. They can pick and choose their investments but we can handle the execution and the mastery of the actual software.

Sean: That takes months and months to get approved and a lot of committees that have to sign up on that to get that done, right?

Brandon: It takes maybe 10-15 minutes. It is extremely simple. There’s no approval process other than the advisor making decision to tap us on the shoulder to have it done.

Sean: I love that. I know some of the wire houses I’m aware where advisors could manage portfolios for each other but I don’t think that’s widespread. My understanding is it’s not, but here it’s just another option of collaboration and we get to choose who we partner with in what fashion.

Brandon: And the broker dealer involved in that decision process whatsoever.

Sean: Yeah and the implementations. They’re following instructions, taking order on who to give what access to what ref IDs but they’re just the order-taker. They don’t have any influence.

Sean: They’re just, you know, the advisor wants to give this permission. That’s pretty much the only thing the broker dealer is facilitating.

Sean: Right. And you and I are both smart guys, obviously. And good looking as well, great hair. But I don’t think we have any particularly head start at other firms like we were handpicked by anybody to manage big network and we’ve created some of what appears to have values of advisors that keep signing up and to me so that’s just the American way, if you ask me.

Brandon: Yeah there was no falling into, “hey, here’s something that’s already working. You just need to buy and to order or take over the steering wheel.” Nothing special about my entry into the business at all. just stick with it, work hard, continue to develop a vision and a plan And then next step is making sure you’re on a place where you can actually execute an that vision. It’s amazing how much you can accomplish in a short timeframe.

Sean: What challenge did you say, maybe not much in your case but the average advisor that comes over to an independent firm somewhere, what challenges do you think they should look out for, some things to consider without being too self serving, joining a network of some sort, how should they think about that? What should they ask if they’re talking to an OSJ or an RIA or some other acronym to get support? What would you be asking if you were on the same spot six years ago?

Brandon: Without trying to be too self serving, the first question is is there a way to make my life easier without either living that much revenue or could I actually possibly net me more revenue than I could on my own? Sometimes and oftentimes it’s actually the case. With a hybrid RIA situation there’s certainly strength and numbers from a negotiating point and trickle down effect is impassive to all those involved. So there are certainly. Coming back to our most valuable asset is our time. If there’s some way so I can get some value when needed and some ways to leverage other resources in either at a very reasonable cost or possibly no cost at all. Why wouldn’t you consider that? There’s a lot of tremendous upside there. The other thing I would tie into that is if there is that option available then the next step is what happens if it doesn’t work out. Not every marriage works out. Make sure that this firm has both the reputation of doing the right thing as well as the willingness to put it into writing, meaning if this situation is not working, there’s no poaching of clients. The advisor can leave whenever they want for any reason, no questions asked. Their clients are their clients. Period.

Sean: Yeah very good.

Brandon: If you put that into writing I would be concerned.

Sean: Gotcha what about in terms of the larger entity like the broker dealer or I guess the custody might come to play if you’re not gonna have a BD affiliation but what kind of tools and characteristics would you look for?

Brandon: Tools and characteristics of a BD or a firm?

Sean: Well, both. But in particular, in this case, the broker dealer or I guess the custody and if there isn’t that. I’m thinking you know. To me, I think you’d consider the size these days, the DOL…

Brandon: Sure. DOL, it seems that there are some other things going on. Maybe even more changes to come but we see the trend line that there is inevitable change in our industry and consolidation is gonna be a hard process. You’re gonna see a lot of small and mid-sized broker dealers go away. If you’re not gonna have the scale to keep up with all these new compliance and things. And those that do stick around you can only, there’s only so many opinions. More than likely you’ll see a lot more of those cost cast down to the advisors the smaller the firm is. So I would certainly think I would certainly take scale into perspective. And the current passive effect on things like technology cost and other things but the ability to absorb future compliance, regulation changes, without affecting or having any significant effect on advisors is certainly something to think forward about.

Sean: Yeah I agree. And I like the idea of smaller community. Again that’s one benefit people seem to find in our network or other groups like ours. I think at the broker dealer or the back office firm people often think back to the good old days when everybody knew my name when I call the back office. But I think the business to those firms now is really technology. I mean the one we’re with was the technology, I believe, right? At least we’ve heard that.

Brandon: I have that statement made before.

Sean: Yeah the sense of somebody that knows your name somehow at the back office. Certainly you wanna be treated properly but I’m not that sure that some small cozy firm is, you know, I think we need to be smart business people how we evaluate these choices and balance that somebody cares about me with, can I do the job?

Brandon: And I came from that firm where they boasted about how little turnover they had at the home office. And it was true that when you called in you usually got the same one of three people, that sort of thing. But the question I think you really have to ask yourself is what is that worth? Because when I sat down and did the math between what I was truly nodding after everything where I was versus what I would here, I was paying a huge amount just to be able to know the person picking up the phone sometimes. Well, that’s nice, it’s not worth an extra twenty, thirty percent. It’s just not.

Sean: Right. And if you’ll excuse them then great but make sure you’re going in that cautious decision making. I guess it’s the idea.

Brandon: Maybe why not take that the twenty, thirty percent and invest it into the good assistants that your assistants can do far more for you than anybody on the other side of the phone.

Sean: Agreed. The other life changing tools or capabilities that you find that we have that you might have had as more towards the employee side of the world?

Brandon: As far as the ability to find and hire and grow the type of firm and culture that we’re trying to create, again I think there’s no interference from the broker dealer against the experience. The reality of the experience is very much your business so when it comes to your personal, there were no doing the background checks and things like that as they should with other maths. There’s no interference.

Sean: One little kind of goofy example I like is when we move off to see if any advisor affiliate with this broker dealer changes and addresses/decides to move. If you wanna move in the employee wirehouse channel, oh my goodness. That’s like, especially with this producer, it’s like you’re property, you’re being traded. But here the process is Step A: move; Step 2: tell them where you move. And that’s about it.

Brandon: Yeah absolutely. That seems like, you’ve certainly heard your ability to simply work where you want to if other places is not entirely your decision.

Sean: Brandon I appreciate your time and the insight and your experience. And you’ve done a lot of this background from talking to you over the years but today I kind of heard it in a different perspective and definitely heard some things that I wasn’t aware of. So it’s been a good conversation. If someone wants to reach out to you and quiz you or pick your brain, what are the best ways to get ahold of you?

Brandon: Prolly the best way is the email at or my cell at 214 394 9347. I certainly remember that I was able to get in touch with some people who were independent prior to me making a change and they had no vested interest whether I made the decision or not but those people were very helpful in helping me confirm my understanding of what I was looking at and some things to make sure I was aware of, and make sure I was ready for. And so I certainly like to be able to to pay it forward so to speak and help those other advisors out there looking and making that sort of change.

Sean: Great. That’s a great place to leave it. Thanks again for joining us!Brandon: Very good, thank you!