The first hurdle for any wirehouse rep hoping to join Steward Partners Global Advisory is the “no-jerk policy,” which company founders say is more important than experience or assets under management.
“We want great people, first, who happen to run a great business, second,” said Jim Gold, founding partner and chief executive of Steward Partners.
What might sound initially like a cheesy marketing slogan has been backed up by a short but robust record of attracting reps and assets.
In just over three years, Steward Partners has recruited 90 partners in eight locations, and has grown to nearly $5 billion in assets under advisement, including $2.75 billion in 2016.
The goal from the start was to create a model that was somehow between the big firms, small firms and independent adviser structures. But it wasn't expected to grow at quite this pace, according to Danny Sarch, owner of recruiting firm Leitner Sarch Consultants. He was instrumental in the creation of Steward Partners, essentially introducing Mr. Gold and another co-founder, Michael Maurer, to the folks at Raymond James.
“It was originally envisioned as a single branch office near [Mr. Maurer's] home in D.C.,” Mr. Sarch said. “There's a cleverness about the story of Steward Partners.”
As so-called strategic acquirers continue to evolve, providing more innovative structures and platforms for financial advisers to apply their skills, Mr. Sarch contends that the “labels can't keep up with the models.”
The Steward Partners model that has gained such appeal, and might not yet fit into one of the half-dozen subcategories of strategic acquirers, is primarily aimed at veteran wirehouse reps looking to break the chains of corporate bureaucracy.
In the most basic sense, Steward Partners is an employee-owned, independent partnership associated with Raymond James Financial Services.
In partnering with Raymond James, Mr. Gold, Mr. Maurer, and a fellow co-founder, Hy Saporta, are appealing to reps who prefer working with clients over all the daily minutiae that comes with going fully independent.
“We wanted to do something that hadn't been done before,” Mr. Gold said. “We saw the flight by wirehouse reps to the independents, and we wanted to give wirehouse advisers the best-of-both-worlds experience, including a brand name and full-service support, but with autonomy, ownership and better economics for the advisers.”
Alois Pirker, research director at Aite Group, said a key element of the Steward Partners' model is that it is built on top of the Raymond James platform.
“The industry is keenly watching this, because it represents a model emerging that could be replicated,” he said. “The pressure on advisers, particularly those with a couple-hundred million dollars, is growing, so having support from a big firm is getting more attractive.”
Mr. Pirker said there is a unique appeal to the affiliation to Raymond James because of its policy that the end clients belong to the adviser, and not to Raymond James.
“If you move, your clients are yours,” he said. “That makes the setup that Steward Partners has at Raymond James one where interests are quite aligned.”
Raymond James has about 7,000 advisers, including about 4,000 in the independent channel.
“Everyone here is an employee of Steward, but everything is Raymond James, including the custody, the platform and the technology,” Mr. Gold said.
Constance Miner joined Steward Partners as a managing director a year ago, based largely on an article she read about the firm.
After 35 years in the financial services industry, including the most recent 10 years at UBS, Ms. Miner said she was ready to either retire or leave UBS.
“I'm trying to develop my business on a legacy basis, and there's not a lot of resources at most brokerage firms to help you with that,” she said. “I don't want to retire and just tell my clients to have a nice life. I think I owe my clients more than that.”
When Ms. Miner joined in January 2016, she was the third adviser in the Bethesda, Md., office. There are now 10 advisers in the office, creating an environment she describes as collegial and collaborative.
“At the wirehouses, the relentless ranking of brokers doesn't lead to a collegial environment. But here the atmosphere is from management, and the message is very clear about partnerships,” Ms. Miner said. “Steward offered the potential of scalable size, which I liked because I didn't want to be Connie Miner, RIA.”
In addition to Bethesda, Steward Partners has offices in Washington; New York; Albany, N.Y.; Andover, Mass.; and three in New Hampshire.
So far, every person who has joined Steward Partners has come from a wirehouse or broker-dealer, and Mr. Gold doesn't see any reason to alter that mode of growth.
However, even though he acknowledges the “leverage in sticking to the Northeast, we plan to expand beyond this area beginning in 2017.
“Our plan is we want to be a $15 billion-$20 billion firm in the next five years,” he said. “We see the opportunity to continue to grow the way we are by hiring one good adviser or team at a time.”