My guest on today’s podcast is Drew Stotler. Drew is the founder of Stotler Wealth Management, a hybrid advisory firm based in the suburbs of St. Louis serving 100 middle-income clients. What’s unique about Drew, though, is his path to building his own advisory firm. Having started his career in the employee advisor model at Edward Jones, deciding to break away to an independent broker-dealer only to get hit with a temporary restraining order after leaving despite having tried to do everything he could by the book, but ultimately overcoming the challenge as he can now build his advisory firm the way he always wanted to.
In this episode, we talk in-depth about how Drew built his career as a financial advisor from starting out in the Edward Jones’ operations division focused on anti-money laundering reviews before requesting an internal transfer to become an advisor, how Drew built his early client base, literally knocking from door to door in local neighborhoods, what he did to build early rapport and connections while cold-knocking, and the books that gave him the inspiration to keep powering forward despite the challenging early years.
We also talk about why and how Drew ultimately decided to make a change. Why the transition was less about the difference in payouts between employee and independent channels and more about the ability to control his own marketing and be able to actually own the business he was building to someday bring his children in. The independent broker-dealers he evaluated during this path to independence and why he chose LPL. And how Drew has been rebuilding his practice while navigating Edward Jones’ stringent non-solicit provisions.
And be certain to listen to the end where Drew shares what makes the advisory business such a unique and appealing career path, the pride of ownership that comes from being able to serve clients the way you think they should be served, and how the transition to independence has made it easier for him to tune out the industry pressures to grow, grow, grow and focus on what’s most important to him instead.
So whether you’re interested in learning about how Drew transitioned from Edward Jones’s Anti-Money Laundering department to an advisor role, how he evaluated his options around going independent, or how he built his firm after receiving a temporary restraining order, then we hope you enjoy this episode of the Financial Advisor Success podcast.
What You’ll Learn In This Podcast Episode
- How Drew Got Started With Edward Jones In Their Anti-Money Laundering Department [04:22]
- Drew’s Transition Into An Advisor Role And What His Background Looks Like [11:20]
- The Services That Drew Initially Provided His Clients And Books That Had a Big Impact On Him [23:16]
- What It Looked Like For Drew To Take Over An Existing Office And How Drew Found New Clients [31:34]
- Why Drew Decided To Leave Edward Jones And Go Independent [42:46]
- The Due Diligence Process That Drew Used To Evaluate Prospective Firms [51:03]
- Why Drew Decided To Join Cornerstone Wealth Management And How That Affiliation Is Structured [01:02:27]
- Drew’s Non-Compete Agreement And His Transition Process [01:09:22]
- The Temporary Restraining Order From Edward Jones And How Drew Responded [01:19:01]
- What Comes Next For Drew, What Surprised Him The Most About Building An Advisory Business, And The Low Point In His Journey [01:32:39]
- The Advice That Drew Would Have Given His Past Self, His Advice For New Advisors, And How He Defines Success For Himself [01:42:12]
Resources Featured In This Episode:
- Stotler Wealth Management
- Value Stack
- Cornerstone Wealth Services
- Winning The Inner Game Of Selling
- 212 The Extra Degree
- Advisor Playbook by Duncan MacPherson
- Raymond James
- Commonwealth Financial
- Kimberly Cronin at Messner Reeves
- Edward Jones sues LPL advisor after clients transfer $7M to his new firm
Michael: Welcome, Drew Stotler to the “Financial Advisor Success” podcast.
Drew: Thank you. Thank you very much. It’s great to be here.
Michael: I’m really looking forward to today’s discussion. And getting into one of the themes and challenges I feel like is very broadly out there in our world of financial advisors. And I don’t think we talk about it enough, which is just what happens when you start your career at some firm in the industry, often a large firm, just by numbers, the big national firms literally do the majority of the hiring, because they have the majority of the jobs and the volume. And you start your career at a large firm and decide at some point through that journey after some number of years that maybe this is not where you want to build your career in the long run.
And I know particularly because a lot of large firms have a wide range of practices to slow people down from breaking away and starting their own firms. Some get fairly aggressive with legal action sometimes to try to discourage advisors from leaving, and particularly leaving to bring their clients with them. I think for some, it creates kind of a paralysis fear of not wanting to ever make a change, even if they’re not entirely happy where they are because of the fear of what happens if they try to leave and the firm comes after them.
And so I know that Drew, you have lived this journey of breaking away and making a transition with a large firm and having them come after you and try to slow you down along the way. And you’re still here, and you’re still standing. You’re running an independent firm today. And so I’m looking forward to this discussion of what does this journey actually look like when you start out at a big firm and decide that’s not the future? And then have to make the transition and deal with some of the scary stuff that comes along the way?
How Drew Got Started With Edward Jones In Their Anti-Money Laundering Department [04:22]
Drew: Yeah, I probably didn’t have the most conventional entrance to the industry. But I started at Ed Jones back in 2011, actually with their anti-money laundering department. So I got a behind-the-scenes view of big money moving. Yeah.
Michael: Interesting. So just in the guts of investment operations and money movements and all the stuff that goes on on the back end of how do firms actually make sure that money laundering isn’t moving across their platform? Which I feel like most of us advisors, we don’t really see aside from the nuisance-y things where we’re trying to like move money for a client or do something and “you can’t do that.” But money laundering is a big thing out there. Most of us don’t see it with our clients, but the government has a lot of expectations of large financial institutions to keep an eye on that stuff and basically let the government know if they see questionable activity. So there are some pretty big departments in some large firms just focused on what money is moving around and how to try to spot money laundering.
Drew: Yeah, absolutely. Every month, we would get a report. And no joke, they would wheel it in on dollies with these big tubs that you would use for storage. And on average, it was 17,000, 18,000-page report. And we’d split it up. And the whole team would just take a stack each day and start combing through it. And like you said, there were a lot of just very innocent things that would trigger the report.
Michael: So, just curious. Literally, 17,000 pages of reports every month that a bunch of human beings have to then look at and try to find things on. What are you literally looking at and going through on these reports?
Drew: I would say 90% of it was just very innocent money moving, maybe there wasn’t a letter of authorization attached. So there was some education to the advisors, “Hey you really need to get that signed before moving that money.” And then occasionally, you’d see something a little questionable. A large wire transfers to third parties that the client maybe never moved money to that entity before. So that would cause some suspicion.
And I was on a division inside the team that was more so, I call it ‘internal affairs’. Money moving from advisor to advisor, advisor to client, advisor to assistant. And so those were more of the, “Hey, we really got to get involved here and see what’s going on and make sure everything is up to snuff.”
Michael: Okay, right. Because once you get advisor to assistant you got all sorts of, “Why is this moving outside of compensation and normal payroll, and what’s going on?” And we have a long list of rules limiting advisor-clients’ lending interactions, transactions, or mingling of assets, so that’s when all this starts to queue up.
Drew: Exactly, exactly. And I’d say about three or four months into it I was like, “Wow, okay, so this is what I’m going to do every day for the rest of the foreseeable future.” And it was around that time, I started looking around inside the firm Are there other areas where I might be more suited for my skill set? And that’s when I learned about the advisor role. Obviously, I’d been monitoring advisors, and I had peeks into their practice, seeing the millions of dollars they were managing, and just how they were doing that. And it piqued my interest.
And so I inquired, and my team later said, “Yeah I think you’d be great as an advisor, you’re very personable, you’re affable. But I need you here in this role for 12 months before you can transition anywhere else.” And so, I spent the next nine months basically, listening and talking to advisors across the nation. And I spoke to everybody…
Michael: So, just to be clear, then you were like three months in on the anti-money laundering stuff and was like, “This is not for me”?
Drew: Right. Right.
Drew: Yeah. And I wanted to get a wide range of opinions. So I would call advisors that were a month into the business. And I’d spoken to some advisors who had been out 20, 30 years, just asking them how they built their business. And especially on the newer advisors’ side, “Hey are you making it? Are you surviving?” Because traditionally, the advisor role, I guess has been seen as more of a sales role in the past. And my only experience in sales was selling Cutco knives one summer, door to door, just to make ends meet. And they were expensive knives. You’re talking 800, 1000 bucks a set. And that was my only experience with sales. And so, when I saw the parallels between advising and sales I was like, maybe this isn’t for me. And that’s really when I started calling these advisors, and they really were helpful in educating me on really it’s about relationships.
Edward Jones will train you, get you licensed, and all that. But really, the job is about relationship management, and really understanding what’s important to clients, and then using that specialized knowledge to really help them achieve their goals. And so I spent those nine months just really trying to scare myself out of it. But it didn’t work. And so when that 12-month hit, I resigned from that role and jumped into the training program to become a financial adviser.
Michael: So did you have any concerns, fears, hesitations? You are talking about what, for a lot of people, is the scary stuff of becoming an advisor, the pressure of sales, or just more generally, business development, getting clients. “You only get to eat what you kill,” as the saying sometimes goes, so you got to be able to hunt. Were you still having some hesitations around that, or were there just things you heard that made it not such a big deal? How did you actually process all this as you’re having these conversations with advisors and trying to decide, “Am I really taking this leap?”
Drew’s Transition Into An Advisor Role And What His Background Looks Like [11:20]
Drew: Maybe not hesitations, but I’m a very analytical person and so I analyzed every different angle. And our daughter was probably one at the time. And we were talking about having another kiddo. And so that was kind of a big concern. Are you going to make it enough to provide for your family? And fortunately, I had a bit of a salary. I think it was maybe 18 months or so while I got up and running, so there was a bit of that safety net while you’re building that initial few clients. So that was comforting. But I also knew I was one of those that was really too stubborn to fail and I was just going to make it work no matter what.
Michael: So to be clear though, you didn’t go to the original job at Edward Jones in the AML department, because this was your foot in the door pathway to financial advisor. You landed there unrelated and after getting there was like, “Oh, this firm does financial advising. That looks neat.”
Drew: Absolutely. Yeah. Yeah. That’s such a good description.
Michael: So what was your background leading up to it that you ended out landing in Edward Jones, in the AML department in the first place?
Drew: Yeah, that’s a good question. I guess in 2003, I got my first job with healthcare. My dad was like, “Hey it’s time you get a job with healthcare.” I wasn’t dating anyone at the time. But my dad, actually a little bit of a backstory there, he had been shot in the head about 25 years ago. He came home during a robbery in progress in his house. And at the time, he was working for Sprint, I think it was. And he lived through it. And he’s still alive to this day. But I watched the healthcare system just almost demolish him. Luckily, he had a good benefits package at the time. But when he finally got back up on his feet and went back to work, he would have seizures on the job. He sat in front of a computer all day. And they found a way to let him go without it being a medical reason. And after that, he basically spent down his 401(k) over that next decade or so because he just couldn’t do the same type of work. And that’s when he told me, he said, “You’ve got to get a job that has healthcare if nothing else, just so that you’re protected.”
So I took a job at a credit union, just as a teller, worked my way up to like a branch manager, I guess you could call it. And I really liked the client aspect of that. It was just simple things. Depositing money and withdrawals and such. But I got away from that and went to a transportation company, and they liked – I guess you could call it the numbers background I had. And that was right around 2008 when the housing crisis was really bad. And they started letting people go. And it was always around Thanksgiving and Christmas. And usually, it’s the last one in first to leave. But I made it three years without getting laid off. But it was just a bad environment.
And so that’s when I started poking around, I should probably have a plan B. And my team leader at the time left and went to Edward Jones in their operations department. And she started telling me all these good things. How during the great recession they didn’t lay a single person off. And that really spoke to me. And I thought, “Okay, maybe I should just apply and see where this goes.”
Michael: So the stability of Edward Jones through the financial crisis was appealing of just this is an employer with some stability. In a world that doesn’t always have stability, this is an appealing place to work and build a career?
Drew: Absolutely, absolutely. And that’s when I applied for the job. And they liked what they called my forensic accounting type background, being able to follow the money. All of my jobs involved following money or depositing money. So that’s where the AML position where I fell into that.
Michael: Okay. So you’re going through the AML position at Edward Jones, you decide you want to be on the financial advisor side of the business. You talked to a lot of advisors who managed to not convince you otherwise. So how did it work when you decided to make the transition? Because I know a lot of firms have different structures of you’re on your own from day one, you get a salary, you get a draw that’s technically in advance against your future commissions, but at least you get it upfront. How did it work when you transitioned into an advisor role at Edward Jones?
Drew: So, once I got licensed and went through KYC, Know Your Customer, and all that, they basically said, “Hey, there’s a guy, you can just kind of share an office with him.” And it was basically the size of my closet in the bedroom at home. And I was grateful for the opportunity, not only because I got to learn from a veteran firsthand, but I also had somewhere to meet clients with other than the local Starbucks.
And so we did that for about a year, and then an office came open in an area where I had grown up. And so that advisor actually wanted to leave the field as a financial advisor and go into auditing. And first of all, I don’t know why you’d go that way. Usually, it’s the other way around.
Michael: I was going to say, usually it’s the people who start in accounting and auditing and decide they like doing forward-looking planning more than backward-looking accounting who go from the accounting side into financial advising. I don’t see a lot of people going the other way. So that was a special guy.
Drew: Yeah, yeah. And I got the call from a regional leader saying, “Hey, this guy is leaving, and we have an opening. We’d like you to come fill in the gap, so to speak.” And so I did. And there was a handful of clients there, maybe 100 or so. And so it was a great start for me. Yeah, not a huge book, maybe 7, 8 million, but I was just transitioning off my salary. So the timing was great because I had some clients. I had a little more stability and some revenue coming in, and I thought, Okay, this is probably a good opportunity, and I need to take it. And so I backfill that office, and just basically, that’s where I spent the majority of my time at Edward Jones all the way up until I left in April of this year.
Michael: So how did it work for you the first year at Edward Jones? You’ve mentioned some kind of salary structure. Like, how does it actually work for you? Are you just on a straight salary, or is there some blending thing? How does it work in that first year? Or at least how did it work? They may have changed since then.
Drew: Yeah, yeah, they’ve changed it quite a bit. But you had your base salary, and then any of the revenues and commissions, you graduated up. The payouts started lower while you’re on salary. And then as you aged into the business, those revenues, the share of it increased, but the salary decreased. And I think a lot of advisors out there know Jones, and the recipe, at least at the time, was get out there in the neighborhoods that you live in and go face-to-face, go door-to-door with people, and build your business.
And so I did that for her about…oh man, probably six to eight months. Started in, I think it was in the heat of August. And I’m out there going door to door, trying to let people know I’m in business. And that was a hard start. It was not the easiest start, but they wanted to see that you would do the work before you were able to take a chance at taking over an office. So I actually got out there and met as many people as I could and started converting those prospects into clients. And that just kind of took off from there.
Michael: So can I ask, what was the salary level that you got to start with? And how did it compare to the AML role you had been in? Like, was this sort of a similar transition? Or was this a, we’re going to take a step back, but we’re hoping to get a couple steps forward? What was the level you got to start at as a safety net?
Drew: It was pretty much a lateral move. I think at the time, my salary was $35,000 to $38,000. And so that’s basically where I started with a salary as an advisor. Knowing full well that to raise a family, I’d have to get out there and hustle to really make it work. Thirty-five grand a year, it’s great for a single guy, but we wanted more kids and a different lifestyle. So I was very motivated to build a business just because the salary wasn’t what I had hoped.
Michael: And so it sounds like as time goes by, your salary goes down. The hope and presumption are that because you’re getting some business done with clients and you’re getting a growing percentage of the revenue that you’re generating, and you kind of wean yourself off the salary and supplant yourself with revenue you’re bringing in as an advisor, and that transition happens over 18 months?
Drew: Yeah, I want to say the salary was scheduled to end somewhere between 18 to 24 months. So they gave you that window to really get out there and bust your butt. And I did. And there were some bonus opportunities here and there. But yeah, it was predominantly salary in those early days. And calling friends and family and letting them know what I’m doing. And, “Do you think you could become a client and help me out?” I think my first client was my uncle-in-law, Dan, who took a chance on me, and he’s still a client to this day. So I didn’t blow it.
Michael: Interesting. But it was very heavy, “Friends and family, do think you could help me out and become a client?”
Drew: Right. Exactly. Calling as many people as I could per day. The recipe was to get on the phone and call as many people as you can and make as many contacts as you can. And don’t forget friends and family. Luckily, they all took a chance on me. And I’m very thankful for that.
Michael: And so what kind of, I guess, business and stuff were you implementing at the time? Was this insurance, annuities, stock and bond portfolios, mutual funds, managed model portfolios? What were you doing with clients? Or were you doing standalone plans and charging fees as well?
The Services That Drew Initially Provided His Clients And Books That Had a Big Impact On Him [23:16]
Drew: It started very basic. Find an idea, find a good stock idea or a mutual fund idea. Call your prospects, tell them about it. Try to get them to take an interest to buy, basically make them a customer first, then make them a client. And so yeah, stocks, bonds, mutual funds. That got them interested and in the door. But really where I saw the opportunity – not only opportunity – but where I wanted to live, so to speak, was in the planning world. I had a good buddy who was at Jones at the time who pulled me aside and he said, “Look, stocks and bonds are great. And you got to do that, create solutions for clients, but you really should get into financial planning.” And I respected him a lot. He was a very successful FA. And so I picked his brain and said, “Tell me more about planning, and how do you do it?” And that’s where I really fell in love with the industry, because you get to hear people’s stories and what was most important, and then as I said earlier, take the specialized knowledge that I had and really build the plan for them to achieve those goals. And I loved it. I loved the planning side of it. And anybody who would let me do a financial plan for them, that’s what I was doing.
And at the time, not a lot of fee-based business, it was mostly just commission-based business. And the industry had been changing already. But then the DOL and all that, that’s when I really said, “Okay, we should really look at the fee-based world and what that means.” And I’m grateful for my time at Edward Jones because they taught me how to be a business owner. That was something that was new to me. And we had a lot of planning tools inside the firm that I took every advantage of. And that’s really where I found my niche was on the planning side. Because there were still a lot of advisors I knew that they kind of balked at financial planning. Like, “Well, whatever. Just get out there and sell.” But I didn’t necessarily prescribe to that.
Michael: If you can get the business done without doing a financial plan and doing a financial plan, it’s just a whole lot of extra work to get to the exact same sale you were trying to get to, anyway.
Drew: Sure, sure.
Michael: For a lot of folks I know that are on the sales end of the business, that still often is the mentality. And ironically, I think a lot of firms have trouble getting – even the firms that are trying to become more planning-centric have trouble getting their advisor sometimes to adopt planning software and use it more. It’s like, “Well, you spent a long time training them how to get the sale without doing a plan. So why would they want to do it now? You already trained them on how to get the sale without it.” And that’s what they built their business on?
Drew: Exactly. Old dog new tricks.
Michael: Yeah. So how did this go for you over the first year or two in terms of trying to get clients or assets or revenue going?
Drew: I was not a super fast starter. I spent more time with individuals than maybe some of my peers were because relationship building was important to me. And I got my first client a month later. She’s still with me to this day. But it was tough because I saw some of my peers that were just making, just lots of money. And I was doing okay, but I was really just focused on being who I was. Just really being true to myself and having those deep conversations with people. And that’s kind of, to this day, I think, what helped me create some sticky clients and really just kind of evolve into where I’m at today.
Michael: So did you have any second thoughts as you were going through the first year and going home looking at, I guess, a one-year-old coming up on two-year-old and saying, “Is this going to work? Am I going to be able to pay for college in another 16 odd years or so?”
Drew: Yeah, there were definitely some of those long drives home. But I read a lot of Matt Oechsli at the time because, again, having never come from sales, I think his book was called “Winning the Inner Game of Selling.” And I convinced myself if I can just brainwash myself into believing that I’m going to make it, just tricking my brain, then those ups will be great, but those downs won’t be so hard. And so there was a lot of reading, honestly. And again, talking to a lot of advisors, from brand new to all the way out I knew if I just followed the recipe and talked to enough people, and let them see who I was, that I would eventually make it. But yes, there were definitely some hard nights around the dinner table trying to figure out how we were going to save for retirement, pay for the kids. Oh, and by the way, we still have to pay our bills. So yes, there were some of those nights for sure.
Michael: So were there other big books or things that had an impact on you besides Matt Oechsli’s “Winning the Inner Game of Selling”?
Drew: Yeah, that was a big one for me. And then Edward Jones had a book available on their system. I think it was called “212 Degrees.” It was maybe a 30-page book. But the idea was at 211 degrees, water is hot, but at 212 degrees, it turns to steam, and steam can power a locomotive. And that just resonated with me. Just that difference between 211 and 212 degrees. And that was kind of an internal mantra I had. Like, make one more call, go see one more person, work one more hour. And I carried that a lot with me, not only in the car but in my head to continue to push myself to just continue to get out of your comfort zone. Because typically that’s where success lies.
Michael: Oh, interesting. So it’s all about like the difference of that one extra degree, the difference of taking one more step that can suddenly put you over the edge where, as you put it, you go from hot water to the steam that powers the locomotive. So if I can just keep doing one more step, trying one more thing, doing one more call, getting one more out there, that could be the one for me that suddenly turned it from hot water into a locomotive?
Drew: Right. Right. So a lot of that, a lot of self-talk, positive reinforcement, and just trying to maintain that positive mental attitude as long as I could, and knowing that, eventually, I would get there.
So yeah, there were some of those books. Duncan MacPherson was another guy that I still follow. And he was more on refining the practice rather than the sale. And so I took a lot from him in “The Advisor Playbook.”
Michael: Is that “The Advisor Playbook” series?
Drew: Yep, yep, absolutely. Yep.
Michael: Okay. So you got through the first year or two surviving, and then as you were getting to the surviving stage, then you also got the opportunity to take over this office and get another step forward?
Drew: Right. Right.
Michael: So how does that work at Edward Jones, if you’re going to come in and take over an office instead of clients? Do you buy your way in? Do you buy out the clients? Is it just, “Well, clients are actually clients of the firm anyway,” so you just drop in as the servicing advisor? How does that actually work?
What It Looked Like For Drew To Take Over An Existing Office And How Drew Found New Clients [31:34]
Drew: Yeah, yeah, the latter there. So basically, I just got plugged into that office. And there were some clients there. And so I started calling them and introducing myself and just trying to get them to come in to meet me. So luckily, there was a bit of a base of clients there to start cultivating those relationships while I was out doing my other prospecting activities.
Michael: And I think you’ve said before, something like 100 clients and $7 million or $8 million of AUM.
Michael: So just good for context. Like doing the math, that’s an average client of $70,000 or $80,000. Which reemphasizes Edward Jones’ middle market, middle America approach. A lot of advisory firms have average client sizes that are larger than that, but this is heavily where Edward Jones lives.
Drew: Right. And I was in their backyard, basically. Jones started in St. Louis and really grew from there. So luckily, there was a lot of brand recognition, but there were also advisors everywhere. On every corner. It’s funny in this one town that I still live next to, a literal stone’s throw on some of the corners.
Michael: So it’s like Edward Jones in St. Louis is like the equivalent of Starbucks in some metropolitan areas where like you literally have multiple on the same block?
Drew: Right. Absolutely.
Michael: So what worked for you in prospecting and just trying to get going and find clients? I know that’s a huge challenge for so many advisors getting started is just literally prospecting and finding people. Where did you go? What did you find that worked?
Drew: For me, it was mostly residential. I just got out in the neighborhoods that were nearby and knocked on as many doors as I could. And I used my sense of humor to… Because nobody likes somebody coming to their door thinking that they’re going to be sold something. And there were different advisors – “Hey, you should say this,” “Hey, you should say that.” But honestly, depending on the time of year – around Halloween, I’d knock on the door, say, “Hey, I’m not out trick-or-treating. I’m a business owner from down the street. I’m just passing out my card.” Or for the environment that we’re in now, I would knock and say, “Hey, I’m not out here to ask for your vote.” And usually, they’d crack a smile. And that bought me at least two minutes to get out why I was there. So I had a lot of success on the doorstep.
Michael: All right, so how does that work? So I feel like, for so many of us, people are very jaded about prospecting in general, but door-to-door I think sounds pretty brutal for most people. Like, how did that actually work? Just literally, what do you say as you were knocking door to door to try to get someone to actually do business with you?
Drew: Yeah, that’s the tough part. I was very situationally aware so if I saw a bike in the driveway, I’d eventually touch on A, one of the things we help people do is plan for education savings. What have you done for that? A lot of times, I’d catch people at home in the middle of the day and say, “Oh, how to happen to catch you at home?” “Oh, I work from home, I’m a business owner.” “Oh, me too. Me too.” So I try to find as many commonalities as I could before I went into my spiel about, “Hey, this is why I’m here. I’m building a business here in town. And I help people with various things. Let me leave you my card. And if it’s okay with you, I’d like to follow up in a couple of weeks and just see if you’re still interested in saving for education.” And a lot of times, they’d give you the phone number, but a lot of times they wouldn’t.
I never got ran off the doorstep or anything like that. I did have the police called on me once. There just happened to be some break-ins in the neighborhood. And the cop pulls up, and he looks at me, and he’s like, “Are you the guy that they’re calling about?” And I was in a full suit and tie. And he’s chuckling. And I said, “Yeah, I probably am. But I’m not the guy breaking in.” And I hit him up. I said, “Hey, I appreciate the job you do. I know some police. I know you guys aren’t compensated as much as you should be. But here’s my card, if I can ever help you grow your money, let me know.” And he got a chuckle out of that. But it was definitely challenging.
Michael: I got to ask, did he become a client?
Drew: He didn’t. No, no. He did not. No, I didn’t have the cojones.
Michael: It’s like the whole creative marketing strategy there. Like, how to get your inroads in working with the fraternal order.
Drew: Yeah, I didn’t have the nerve to ask him for his phone number. So I was never able to follow up with him. But if he’s listening, maybe he still has my card, but my number has changed. But yeah, it was definitely challenging.
But before I jumped in the advisor field when I was still in AML, I called the local advisor and I told him, “Hey, I’m considering being an advisor, and I know how you guys do it door-to-door a lot of the time, will you take me out just so I can witness it?” And so we went out on a cold January Saturday morning, and we knocked on doors for about an hour. And I just watched him in amazement. And I’m like, “He’s getting people to open the door in January,” but he’s getting people to talk to him, and they’re telling him intimate things about their finances. And I looked back on that a lot of times, and that’s when I’d say, “One more door.” If I found somebody who wasn’t very receptive, one more door because I remember there are people out there that will talk to you. It’s just a numbers game.
Michael: And so what was the process…? Like, the goal of knocking on the door at the end of the day is just to earn the right to do a follow-up call with them with some inkling of where the opportunity may be? Or this is an education thing, so I saw the bike. This is a small business retirement plan because they’re a business owner from home. And then you’re trying to do a follow up with them to say, “Hey, I’d love to come out and meet again and just talk a little bit more about your financial situation and understand what I can do to help?”
Drew: Exactly. I tried to uncover a need with every conversation so that when I went back, or when I followed up with a call, I could refer back to that, which not only showed them that I was paying attention, but that I was serious. A lot of people told me, “Wow you’ve got some moxie being out here in this neighborhood, doing what you’re doing.” And a lot of people respected that, even though they maybe didn’t give me the business. There were still some of those nice people that at least appreciated what it took to be doing that.
Michael: And what kinds of opportunities would you get from this? is this like opening $5,000 IRAs, opening a 529 plan with some ongoing contributions of a couple of hundred dollars a month, like those sorts of opportunities?
Drew: Yeah, there were some of those. But the very first client that I earned just so happened to be considering retirement. And I said, “Hey, let me just get some information from you, I’ll follow back up with you, and just really kind of highlight how I can help.” And she agreed. She gave me her phone number. I followed up with a call about two weeks later. And we sat in her living room, and it was probably two hours. And some of my advisor peers were probably like, that’s way too long. But she ended up becoming a client. And I think she had $700,000 at the time. And that was the first account I had opened, aside from uncle Dan. And so I had that one early success. And that’s when I knew, “Okay, this is going to work. I just have to meet enough people that are like her – willing to just let me do that repeat visit to kind of highlight the firm I work with and who I am.”
Michael: And did it help that at the end of the day, you were from Edward Jones, you had Edward Jones on your card? That’s a familiar name in general, and particularly in the St. Louis area. Was that a factor? Or was that not even really relevant? Because you’re, “I’m Drew, I’m a local business owner, and I just would love to talk to you understand if I can help.”
Drew: Yeah, I think it did help more than it dissuaded people. The name recognition was a good thing. And a lot of times, I’d knock on a door, “Hey…” I’d get out my first 30 seconds, and they’d say, “Oh, I’m already with Edward Jones.” So there were a lot of people I met who said, “Oh, yeah, I’m with you guys.” So I’ll say, “Good. You’re with a great firm. I’ll get out of your hair.”
Michael: Yeah, we’ve got to get our central database fixed. Sorry about that.
Drew: Right. Right.
Michael: So I do think it’s fascinating though, that – just that journey, to me, so makes the point around how much of the advisor business at the end of the day is still, as you noted at one point, it’s that game of numbers in Nick Murray’s terms, if you talk to enough people you will come across a person that is having a problem, in need, at basically the exact moment that you happen to talk to them and knock on their door, and you get an opportunity to do business. You just have to talk to enough people and get through them fast enough to get to the ones that are ready to have that conversation and be able to capitalize on it when you actually make that connection.
Drew: Absolutely. And there was a phrase early on, you’ll take anyone who can fog a mirror. So literally, like you said, a lot of people started out, “Well, I don’t have a lot of money to give you, but a Roth IRA, yeah, I heard my dad talking about that. Let’s set up 250 a month into that.” But then that blossomed into other things. Maybe I met the parents, or maybe they changed jobs. So I was not too proud to just help those people that didn’t have a giant nest egg to start out. And like I said, a lot of times that led elsewhere.
Michael: So, you’re building your career at Edward Jones. You’re not there anymore.
Drew: No, I’m not.
Why Drew Decided To Leave Edward Jones And Go Independent [42:46]
Drew: Yeah, that’s a good question. It was more so things that I couldn’t do, both on the investment side, and on the planning side, but as much on the resources side. How I can grow, and what I can offer, and how I can brand myself. And for a while, I was content. I knew there was not a lot of creativity I could put into the business. And that nagged at me for years, but it wasn’t enough to make me want to go elsewhere. But over the years, I had had a couple of friends who left Jones and went to Wells, or Merrill, or wherever. And just telling me about other opportunities. And probably, I don’t know, right after I took over that office, the recruiting calls started coming in. And “Hey, we want you to come to our firm,” because most firms out there know that Edward Jones is, probably to this day, the best at training new advisors. And so they knew the recipe. They knew that the Jones advisors are out there. Some of them going door-to-door. And so I think that appealed to them.
So the recruiting calls come. And I blew them off for years. But it was the two of those things coming together. And then, my mom is a creative writer and a poet. And so that’s in my DNA. And that always kind of nagged at me that you couldn’t really go off the marketing radar, so to speak. You can use the pre-approved white papers that we have, but you really can’t come up with your own stuff. And eventually, that got to me enough to where I said, “You know what? Let’s just see what else is out there.” And I was a fan of yours – still am – and I’ve read a lot of your stuff. And just everything else that was out there that I couldn’t necessarily do at Jones the way I wanted to, those feelings just eventually nagged at me long enough until I just decided to take a peek.
Michael: So can you describe a little more – just what was it you wanted to do that you just felt like you couldn’t do there?
Drew: For me, I like to do a lot of customized stuff. Jones has just tons of great resources. But a lot of that, clients – at least my clients – they’d start to read something and probably just never finish it. But I wanted to inject my own personality, my own take on things, and do it in a way that engaged people. And we really didn’t have that.
Michael: Just in terms of like the marketing material where you wanted to write more customized market commentary or letters or discussion with your clients and things like that and Jones was requiring you to use the templates?
Drew: Yeah, yeah, absolutely. And there were some things that we could go to compliance for and try to get exceptions with. But that was kind of a cumbersome process. They really wanted you to use what they provided.
But yeah, that nagged at me long enough. Like I said, I like to inject humor, where appropriate, and yeah, it just didn’t feel like I had that option. I got told “no” a lot of times. “No, you can’t do that. No, you can’t send that out.”
So we did what we could. For example, we put together a client cookbook. We asked all our clients to submit recipes leading up to Thanksgiving, and we bound it and got those out to clients. Newsletter, we got approved. But I really felt like it was a lot harder to do those things than it should be. I saw some of my peers and what they were doing, and it’s like, “I want some of that freedom to do those things.”
Michael: And you said that the planning and investments and resources side were limitations as well. Edward Jones is just so huge with the amount of resources they do have. So what were the planning and resources limitations that were still grating on you?
Drew: So they had a really great retirement tool to see if you’ve done enough to save for retirement, and it was the only tool I ever had known. And so I loved it, and I used it all the time. But the further I got into the business, the more I learned what other types of tech are out there, and planning tools and ways that you can work with clients and engage with them. And different ways you can charge for your services. It’s not just commission or fee. And I’m proud to say now that I am set up for AdvicePay. So that was not an option I had. I knew about eMoney and MoneyGuidePro and the different CRMs. And we just couldn’t go get those. It was the in-house stuff is what you could use, and you…
Michael: Everything must be you you use what Mother Jones says you’ll use. That’s part of the deal.
Drew: Right. Right. And like I said, for the first few years, that was really all I knew. But the more I learned, the more I wanted to go out and grab these different providers to build an experience that I thought was beneficial for my clients. And it’s just kind of the coalescing of all of that led me to start looking around elsewhere.
Michael: So was there a particular moment or impetus or transition point that said I got to make this move? Or was this just, in the spirit of the earlier conversation, just one degree too many? At some point, there was a straw that broke the camel’s back and you say, “I think I’m going to start looking.”
Drew: Yeah, it’s hard to pinpoint an exact moment. But I forget where I was at. It was a due diligence meeting at one of the mutual fund companies. And it just kind of clicked with me somehow that I wasn’t actually a business owner. I was a W2 employee. And the clients, although they probably saw me as their clients, they were really clients of Edward Jones. And that hit me coming back from that meeting. And then you add in all the things I was wanting to do that couldn’t do. That’s kind of when it clicked and said, “Okay, you can stay here for the next 30 years and build a great business and make a great living and be fine.” But I somewhat blame my mom for that creative itch that I was not scratching. And so the combination of all those things. And again, with the realization that really, they said you’re a business owner, but at the end of the day, the clients belong to the firm. And that was finally the final thing because my hope someday is that my son or daughter will take over this business, and I wanted more control in how that played out. I’m the guy that thinks 30 years down the road. And I wanted to have the succession plan that I wanted rather than what a large firm wanted.
Michael: So how does that journey work? Like, you’ve had the moment of realization like, “Okay, I think I’m going to journey and see what’s on the other side of the mountain and figure out if the pasture is greener there. What actually happens next? How did you actually proceed to figure out what comes next?
The Due Diligence Process That Drew Used To Evaluate Prospective Firms [51:03]
Drew: So, I was a student of the industry and so I knew who some of the bigger players were at least. And so I started a list of some firms that I wanted to interview. And I talked to some peers that had left and gone to those firms. And I asked them a lot of questions. “What’s better? What’s worse?” And I came down to a list of firms that I was really going to invest my time doing some due diligence on based on would this be the place – not only for me but a good place for my clients? And then what some of the advisors were saying at those firms, especially the advisors that had left Jones and gone to those other firms.
Michael: So, when you asked questions like what’s better and what’s worse, what were the trigger points or the deal-breakers that you were looking for of like what would make a firm a good firm or what would make a firm a bad firm?
Drew: For me, it was more about do they empower you to build the business the way you want or do they really just get in the way with either, “Hey, this is how you can do this,” or, “This is the platform we use for this,” and you really can’t do anything else. But then also on the investment side. I think I was probably seven years into the industry when I really started looking around. And by then, I had learned about just all these different products. And some of them we just could not get. And there were products that in my mind were suitable, but for whatever reason, they didn’t make it onto the platform. And so…
Michael: Like what? What sorts of things were you trying to get to that just weren’t available on the platform?
Drew: So, one of the things that jumps out is on the annuity side. We had some good annuities on the books, but I learned about some other types of products and features in the annuity world that, Oh, I’ve got a client that would like that. And I remember talking to a lot of vendors over the years, a lot of wholesalers. And sometimes, I don’t know if they forgot where they were, but they’d started to, “Oh, and this is our fund… Oh, wait, I can’t show you that one.” And I’m like, “Well, why not?” And, “Well, for whatever reason, it’s not on the platform.” That and then there were some clients that had some investments that were held outside of Jones, that once I uncovered that I wanted to bring that in. And there were some times that I was told, “No, you can’t hold that here.” And there wasn’t really a good reason. I don’t know the behind the scenes stuff with selling agreements and all that, but there were some times I had to tell “no” to clients that, “You can’t bring that in or you couldn’t buy that.” So having a wide menu on the investment side was important to me as well.
Michael: Okay. Right. Gets into all those challenges of the guts of what happens inside of a brokerage firm is how they might make money and selling agreements, 12b-1 fee, Sub-TA fees, all these revenue sharing pieces that happen on the back end, where if a company won’t pay the rev shares, they often don’t get on to the platform. Which means you can’t move the assets in if that’s what clients are holding, because the firm, at the end of the day, isn’t getting paid on it and doesn’t want to hold stuff they can’t get paid on.
Drew: Right. Right.
Michael: So the frustration is building, you start looking at other firms. Was there a shortlist of the firms that you said, here are the ones that I think I want to check out?
Drew: Yeah, there was. And it was three of them. After I did enough homework and talking to enough people it came down to LPL – which is where I’m at now – and Raymond James and CommonWealth. Those were the three that I really had a lot of phone calls and due diligence meetings with.
Michael: So why those three? What were the factors that were making them appealing or interesting that drew you in?
Drew: One of them was I knew people at each firm. Probably a couple of people, at least, at each firm. And the other thing, at least with LPL and Raymond James, I had done enough prospecting and heard those names enough. And some of those doors, I’d knock on that they’d say, “Oh, no, no, I’m with a private wealth advisor at Raymond James.” or, “My guy over at LPL, he’s independent.” And I remembered those prospects talking like that, like it was like a symbol, like a sign of status. And so those things jumped out at me.
But then I asked a lot of questions around branding and marketing because again, that was one of my biggest frustrations at Jones. And it seemed like those firms were willing to let me – to some extent – build how I want and market how I want. And that’s kind of why it came down to those three, it seemed like they had the greatest freedoms, so to speak.
Michael: Okay. So your freedom to let you market the way you wanted and then freedom on the product shelf to get pretty much whatever you want for your clients?
Michael: Okay. So, and how did you ultimately make a decision between the three?
Drew: That was tough. Oh, man. So this was about a year in planning. And I had done enough homework to take it to the next step. And the next step was an in-person due diligence meeting. And so I called up a buddy of mine who was at LPL. And I said, “Hey, I’d really like to come pop the hood. Who’s the recruiter?” And so I reached out to the recruiter, and he said, “Oh, yeah, absolutely, we would love to invite you out.” So I flew out to San Diego, where LPL – one of their headquarters is – and we did their due diligence meeting. My wife and I. They flew us both out. And we spent a whole day just learning from the different departments. The resources they had. And this was right around the time COVID was just starting. Maybe a little bit after, but yeah, because I remember flying back and hearing on the news COVID had, I don’t know where it started in the US at least, but California had just had a case or two. And we got…
Michael: This is like January, February timeframe?
Drew: Yeah, it was February.
Drew: And we got back. And I was not expecting to be as impressed with LPL as I was. And so we got back, my wife and I just looked at each other, and she wasn’t expecting much either, because she had only known Jones, and Jones has a very strong brotherhood, and why would you ever leave? And she said, “Wow this seems like a really good opportunity for what you’ve expressed your frustrations are.” And so I was getting ready to go do a due diligence meeting at Raymond James, and I think they started imposing travel restrictions. So I did a lot of over the phone due diligence with them, as well as with CommonWealth as well.
Michael: Interesting. But you never got to do the trip because suddenly travel started getting shut down.
Drew: Exactly. And I didn’t jump on the chance at LPL. I came back and just let it marinate for several weeks. And I had talked enough with Raymond James to know that they felt more like Edward Jones than I wanted. I can’t put my finger on exactly what that was to this day, but I just got…
Michael: They are a firm similar to Edward Jones that has an employee channel, they also have an independent channel, but they do live a little bit more of the centralized Raymond James brand, which depending on your preferences is a plus or a minus. Whereas, always, the interesting effect for LPL as large as it is in the industry and so on in the industry, and I think literally, the largest headcount of independent advisors, no one knows that brand in the consumer world at all. Like they haven’t really put themselves out there. They don’t live as a consumer brand. They live as an advisor brand and then the advisors brand however they’re going to brand themselves out into the marketplace. So I can imagine that it feels a little different as someone that was really focused on building their own brands that not that Ray J. doesn’t allow a lot of flexibility on the independent channel, but there is a different style to the Raymond James brand than the LPL brand.
Drew: Right. Yeah. And you hit the nail on the head. It just felt more like I could really be who I wanted at LPL. They said, “Hey, you if you want to do this, we’ll help. If you want to that, we’ll help.” That, and they had a really good department for M&A, which was never even on my radar at Jones. It never had even crossed my mind really. But that was one of the teams that we met during the due diligence meeting. And that resonated with me because as I’m sure you know, the average advisor out there is probably 55 to 60 years old toying with the idea of retirement. And LPL really highlighted that as a benefit that I had never even thought of. The ability to go buy a book of business someday if I want to do that. That really spoke to me. Who knows if I’ll do it. But it was nice to have that resource baked into LPL.
Michael: Interesting. As you went and did your due diligence, were there other resources or things that were resonating with you that made you come back? And even the wife is like, “Yeah, I’m really impressed. It seemed like they’re really good for you.”
Drew: Yeah, I had some buddies that had recently left Jones and went LPL and so I spoke with them a lot. But then the other thing was just the amount of resources that LPL had. And I asked a lot of questions around, “What can I do? What needs to be approved?” And they really said, “We’re not here to get in your way. We’re here to support you.” And that was a very loud message, they were the loudest at that message. And I kept coming back to that. They take care of their advisors so that the advisors can take care of their clients, not them in between.
Michael: Whereas the world of Edward Jones, Edward Jones is very much in between, because it’s literally Edward Jones’s clients, and you’re a W2 employee?
Drew: Right, right.
Michael: Interesting. So you get to the point where you decide you want to make this decision, and now you’re at..? Well, how did you ultimately get to the final decision of LPL and deciding what comes next?
Why Drew Decided To Join Cornerstone Wealth Management And How That Affiliation Is Structured [01:02:27]
Drew: So I spoke with the recruiter after the due diligence meeting, and I said, “Hey, I really like LPL. I really like what they had talked to me about. I just don’t know.” And he told me about this RIA inside of LPL called Cornerstone Wealth Management. And he said, “You should really call these guys.” Because there were a lot of former Ed Jones advisors that had tagged up with Cornerstone. And so I went and met with Cornerstone. And it was very much like Jones. Yeah, there was kind of that brotherhood feel. Some of the guys I had already known previously, but by tagging up with Cornerstone inside of LPL, it afforded me a lot of the luxuries that I was used to at Edward Jones that I didn’t want to necessarily go out and get myself. They had a full have a full-time marketing director, the compliance, they have a coaching team, they provided 90 days of a full-time dedicated assistant.
And so, oftentimes I hear ‘independent’ or ‘independent light’, and I guess you could say I went independent light because I plugged in with Cornerstone, but I wanted to spend my time with clients. And they really said, “You could plugin with us. We’ve got a turnkey system. By the way, we’ve got a lot of former Edward Jones advisors that know exactly what you’re going to go through.” And that was very warm and comforting to me to know that I could plug in with Cornerstone and still come to LPL
Michael: And so, is Cornerstone local to the area, or are they just like a bigger roll-up of lots of different LPL advisors that they support?
Drew: They’re actually about half a mile down the street from the Edward Jones home office, coincidentally.
Michael: Oh, man, okay.
Drew: Yeah. Yeah, yeah, one or maybe two of the founding members there, the partners were Edward Jones guys as well.
And so I’ve really liked that. And then again, just the turnkey system they had, but yeah, they’re starting to grow all over though. I think there are offices in several different states that wrap up under cornerstone.
Michael: Okay. And so as it works, they’re your local supervisor, they’re your broker-dealer OSJ, and the RIA that you affiliate with as a hybrid then?
Michael: Okay. And how does that work from the business perspective? Like they get a percentage of your revenue the way that Jones got a percentage of your revenue? Do you play like a flat fee for the platform? How does that actually work?
Drew: Yeah, yeah, it’s a percentage. Not nearly as big of a haircut as I was taking. And then as your business grows, that percentage gets smaller.
Michael: So for those who aren’t familiar, what do those percentages look like? Like, what was the ‘haircut’, as you put it? What’s the haircut that Jones typically takes? And then what kind of haircut do you face when you’re at Cornerstone?
Drew: I think it’s probably similar in some other big broker-dealers, but basically like a 60-40 split. But then, like I said, when you’re in that salary…
Michael: Which means you get the 60, or the firm gets the 60?
Drew: The firm gets the 60.
Michael: Okay, and you got the 40?
Michael: Okay. And then how does it work at Cornerstone?
Drew: So for me, where I’m at now, 3% is what they take.
Michael: So it’s 97% to you and 3% to them.
Drew: Yeah. And then LPL, they have their 10%. So all in between LPL and Cornerstone basically 13% goes to them. This is, of course, before any expenses, of course, but yeah. And that was not a motivator for me, the payouts, it was such a backburner issue. I was so frustrated with branding and marketing and all that that was my primary motivator, but it also doesn’t hurt when the paycheck shows up now.
Michael: So you decided you’re going to make the shift, you’re going to do it with Cornerstone. So at this point, you’re ready to. Is that the point that you were geared up once Cornerstone dropped into the picture?
Drew: Yeah, I did due diligence with them. And I said, “Okay, this makes the most sense. It feels like the positive parts of Jones.” And I said, “Okay if I’m going to do it, this is the way I’m going to do it.” And, of course, right in the midst of COVID. And so I sat for a couple of weeks. And I think at that time, we got a mandate at Jones, you’ve got to close your offices, you can’t be seeing people face-to-face, but we still expect you to be in the office. And so I was office-ing, usually in the office, but I’d work from home from time-to-time. And I remember calling a buddy of mine who had left Jones and went to LPL and I said, “Hey, am I crazy for doing this at this time?” And he’s like, “What do you mean?” I’m like, “Well, COVID.” He’s like, “Oh, my gosh, I didn’t even think about that.” And said, “Yeah, it’s kind of a big deal.” He said, “Yeah, you might want to wait until this is over.” And as I hung up the phone with him, I was thinking, “If I wait, maybe there will never be the right time or a perfect time to leave.” And so I said, “You know what? I’ve done enough homework to know that there’s something more that I want out there. And there’s no better time than the present.” And so I took the leap.
Michael: Well, and so one was that?
Drew: I resigned on April 20th.
Michael: Okay, so get your taxes filed first. It’s good timing.
Drew: Yeah, exactly.
Michael: We’re going to, in a week. That’s the tax deadline. So how does it work when you’re resigning from Edward Jones and looking to make this shift, but you’ve got this environment where technically you’re a W2, technically the clients are the clients of the firm, not yours. How does this work now?
Drew’s Non-Compete Agreement And His Transition Process [01:09:22]
Drew: Yeah, that was the scary part. Kim referenced a non-compete or non-solicit, but I’d signed a contract, basically saying when you leave you can’t take anything with you. And so that was the scary part was not knowing are people going to actually come with me. But ultimately, I came back to those relationships and I said, “You know what? The payout is higher. So even if everybody doesn’t come, maybe I won’t take as big a hit as I thought.” But the hard part was just having to keep that quiet after I’d made up my decision. I had a lot of good client relationships that really became more like friends. And I was bound to my contract. I couldn’t tell them that I was contemplating this until I actually left.
Michael: Yeah, it’s one of the hardest things for advisors when you make the shift, your employment contracts – employer – even as an independent or a broker-dealer, you are a representative of your broker-dealer until you are not, right? So soliciting your client – nevermind, non-solicitation agreements about soliciting them after you leave – soliciting them while you still work there, for the new firm you’re going to, is pretty much strictly forbidden anywhere at any time. But what that means in practice is you can have clients you’ve incredibly close relationships with that you spent all this time with over years and years and years, and you can’t tell them what’s going on until after the fact. Which for most advisors that breakaway, there are usually at least a few clients that don’t come because they feel offended that you didn’t tell them. Like, “I thought we were so close. How could you not tell me this?” Yeah, “I was legally prevented,” still doesn’t overcome it for some clients.
Drew: Yeah, there were a couple of folks that maybe were offended, maybe that’s the right word. But yeah, like you said, they really wanted to know that I was even thinking that. And I’d explain I just could not tell you. I wasn’t going to violate that. It was kind of hard.
Michael: So as you’re looking at this transition, what was the expectation? Just, “I’m going to make the switch and I hope my clients liked me enough that they’re going to look me up on the other side”? Did you have some strategy about how to message them to let them know that you had left or made a change without otherwise violating the employment agreement? Or were you just like, “Built my business once door-to-door. I can do it again. At least I’ll have a higher payout this time,” and just saying, “I’m going to build from scratch”? What was your expectation as you were making this shift?
Drew: It was all of the above. I had read enough and listened to enough podcasts, I listened to Mindy Diamond, to know that a lot of those relationships were with the adviser and not the name of the broker-dealer. And I put a lot of faith in that. And then my ability, not only those relationships but even if all else failed, my ability to go out and just do it from scratch again. I knew that I wasn’t afraid to go door-to-door if it came to that. But yeah, there was a lot of hoping that they would come. And then you basically resign and send out what’s called a tombstone letter saying, “Hey, this is where I’m at now. Look me up.”
And I spoke with an attorney and they gave me some tips on how to leave the right way. Even social media. After I left, I put a post on Facebook, just very generic. Just saying, “I’m so excited to open the new chapter of my life at Stotler Wealth Management.” And a lot of people saw the post, I think I put it on Facebook and LinkedIn, and a lot of people called me and they’re like, “Hey, what’s going on? What do you mean? Did you leave Edward Jones?” So there was some confusion. A lot of people hit like on the post, but then they sent a comment saying, “Well, are you still at Edward Jones?”
Michael: Oh, interesting. So because some of these folks were connected to you on social media or followed you on social media, you didn’t have to go out to solicit them per se, but you could at least announced you were doing a new thing. And if they see that in your public notice, that was their discovery.
It’s like the digital equivalent of, “If I put a billboard up in town, and my former clients drive by, I’m not soliciting them, I just put a billboard up for everyone.” Which, I actually know one advisor that did at one point. So you did the digital version of the billboard, which is announced on social media, “Hey, I’ve got this new firm,” and some former clients started reaching out to say, “Hey, what’s going on? I want to know more”?
Drew: Yeah, exactly. Exactly. A lot of them called in and were confused. Some of them instantly understood and they’re like, “Hey, this is awesome, this is going to be so good for you.” Especially the business owners. I had a close friend who was a client in a totally different field. But he did the same thing about a year prior. And I watched him go through that. And I watched his business clients said, “Hey, well, we want to come with you.” And so there was a lot of that. A lot of that, “Well, what does this mean for me”? and “What’s that look like on the other side?” So a lot of education as to why I left and what that meant for them.
Michael: And so how do you explain that of just why did you leave? And what does it mean for them?
Drew: Basically told everybody that I was very grateful for my time at Jones, but the way the world is going and rapidly evolving, I wanted to be able to offer more to my clients, but also build the business, I wanted the way I wanted. And a lot of them understood that. And one of the big things for me was being able to do digital, to do video. And at least at the time, at Jones, you couldn’t really do Facebook videos or YouTube videos and stuff like that. And of course, it was right in the midst of COVID, too. And that was a big driver for me, of, “Hey, if I could snap like a quick 30 to 60-second market update, push it out there, I can calm a lot of fears pretty quickly.” Whereas, the old way it was, call everybody. And don’t get me wrong, I’m still calling clients. But there was a lot more efficiency that spoke to me. And they kind of understood that.
Michael: So how did this transition work? Is this literally turn in my resignation letter on Friday, show up with Cornerstone on Monday?
Drew: It was on a Monday when I left. I called my assistant and I said, “Hey, are you in the office yet?” And she was not. And I said, “Well, I’m not going to be there when you get there.” And there was this long pause.
Michael: So your assistant didn’t even know?
Drew: No, no. And that’s for two reasons. One, because I didn’t want to jeopardize her. Because if I had told her I was going to leave, and she didn’t turn me in, I didn’t want her to be on the line for not reporting me. And conversely, say we didn’t have the relationship I thought, I also didn’t want her to turn me in.
Drew: Yes. Yes.
Michael: Actually find out that she is going to turn you in would also be an unfortunate discovery.
Drew: Right. Right. But I told her, “I’m doing this, it’s nothing against you, but I have to take this new opportunity. And I wish you all the best.” And that was the last time I had spoken with her, actually.
Michael: So then, when do you get switched over and start actually trying to get going with Cornerstone?
Drew: So it was on that same day. Basically, I had a couple of clients call early that I could not even take their call until my licenses had transferred over to LPL.
Michael: So they’re like scrambling to activate your licenses at the new firm in real-time as you’re making this transition? LPL is doing that in the background.
Drew: Right. Yeah, I called my regional leader and area leader. I got to the office early. I didn’t reach either one of them, so I sent an email and I copied each other just so that I would officially resign. And then the phone calls started coming in from the regional leader and the area leader, and just a bunch of advisors that were friends and on the leadership team. A lot of like, “Where’d you go? What’s going on? Come back, we can fix it.” So it was a very nerve-wracking several hours waiting for those licenses to transfer. But it did happen the same day. So, fortunately, I was able to speak with some clients that first day to start explaining where I had gone.
The Temporary Restraining Order From Edward Jones And How Drew Responded [01:19:01]
Drew: Well, basically, we were taking those calls the first few days, and just going through the script and letting people know why. And a lot of people thankfully said, “Hey, we want to come with you.” So it was scrambling quickly to meet with them.
Michael: And they’re calling just based on the social media announcements? So they’re also calling from the tombstone letter?
Drew: Yeah. And the way the attorney explained it was if their information is in the public domain, you can call them. And so I subscribed to, I think, intelius.com, and I tried to find some phone numbers. And I was very specific in my wording. I was not solicitous if that’s a word. I was just, “Hey Michael, it’s Drew. I just wanted to let you know that I’ve started a new chapter in my life. I’ve opened up Stotler Wealth Management over at LPL. And you have some options, and I just wanted to see what questions you have.” And then I would just shut up. And they’d be like, “Well, why’d you leave?” or, “How do I come with you?” And then I could go into explaining the process after that of gathering a statement and submitting the ACATS and all that.
Michael: Okay. And so I guess you get a combination. Like you post to social media, you send the tombstone letter, which for those who aren’t familiar, is basically just a blanket letter that says you’re no longer with Edward Jones, and here’s your new contact information. As far as like, you can’t say basically anything else but that. So at least if they’re curious they can find you.
Drew: Exactly. Yeah, that was my hope was that they would find me. And I’m very active in the community. I’m an alderman in my town, I’m on several boards. And so the word got out quick, thankfully. So there was a lot of inbound calls, just for that reason, just people checking on me. Like, “What’s going on?” But yes, yeah, to your point, very just factual, at no point did I say, “Hey, please come with me.” It’s just saying, “Hey, this is where I’m at now; what questions do you have about that?”
Michael: So you’re looking former client information up publicly, for just the people you remember because you can’t actually take a list. But work with them for a long time, you can remember their names. You get to send the tombstone letter, you get to announce on your social media for anybody who happens to see it, and then just start having phone calls and see who would like to continue the relationship with you at your new firm?
Drew: Exactly, exactly.
Michael: And so how did that go? Were most clients reacting well? Where did you get to connect with most? Were you only getting a few? How was it going as those conversations got underway?
Drew: I felt like it was going pretty well. What complicated it was COVID. A lot of people were like, “Hey, this sound sounds really good. Yeah, maybe let’s talk after things calm down.” But then those other clients were like, “Hey we want to come with you.” And so I felt more positive than I did worried. But then I got a letter saying, “You can’t be contacting your clients,” and this and that.
Michael: So this is Jones now like, “We’ve noticed you’ve left, and you’re talking to former clients, we’d speak with you”?
Drew: Yeah. Yeah. And that was that lump in the throat. I’m like, “Oh, wow. Okay.” I thought I did everything right. I didn’t take anything with me. “Oh, crap.”
Michael: You had mentioned counsel a few times, were you working with a lawyer throughout this transition already?
Drew: Very early in the process, LPL offered you like an hour or two phone call with an attorney that you could talk through that with them.
Michael: Just to walk you through, “You’re allowed to do this. You’re not allowed to do that.” Like, “Let’s just get really clear on the rules.”
Drew: Yep. Yep.
Michael: Okay. So, but you didn’t necessarily have ongoing legal counsel at this point or anything?
Drew: No, no, not at that point.
Michael: Okay. So what happens? Like, what does the Jones’ letter, say? And then, what do you do at that point?
Drew: Well, they had sent me my contract that I’d signed and said, “As a reminder, you’re bound to this.” And I didn’t feel like I was violating it. I wasn’t asking anyone to come with me. And like I said, I didn’t take any information with me when I left. And so I called that attorney and I said, “Hey, this is what that letter says, what do I do?” And he said, “As long as you didn’t take anything, and you’re not actively asking people to come with you, you’re fine.” You don’t need to engage with outside counsel. And so I said, “Okay.” So I just kept taking the calls and trying to get the word out.
Michael: So it’s not like they filed a restraining order or anything against you. This was just sort of the, “We’d just like to remind you about your contract.”
Drew: Right. Right. And so that was scary enough. But like the attorney said, he said, “Don’t do the things we told you not to do, and you’re fine to proceed.” And about a week later, it was a Saturday morning, I was just leaving a client’s house who had said they wanted to come with me. And by the time I got back to the car after the appointment, my wife had called like, 15 times, no joke. And I’m like, “Okay, well, I better call her back.” And so I called her and she said, “Hey, where are you? You need to get home.” And I said, “What’s wrong? What’s wrong? Are the kids, okay?” And she said, “Yeah, there’s a guy here. And he has this big pack of paper. And he needs to talk to you.” And I said, “Oh, God.”
Michael: That’s not good.
Drew: No. And the guy had to go somewhere else that day or that hour. I guess he had more papers to deliver. But he left the phone number with my wife. And he told her to tell me to call him on the way home. And I called him, and he said, “Hey, I’m really sorry to ruin your weekend. But I have some legal documents I need to deliver to you.”
Michael: You’re being served.
Drew: Right. Right. And I got home, and I called him, I said, “Hey, let’s get this done.” And he was a very nice guy. A very nice guy. He’s like, “I do this all the time. I’m sorry. But here it is.” And I don’t know, it felt like it was two or three hundred pages long. I don’t know how long it actually was. But yeah, it was a TRO.
Michael: Okay, so at that point, Jones has actually hit you with a temporary restraining order. And, what did it say in practice? What exactly was it supposed to prevent you from doing?
Drew: From reaching out to anybody.
Michael: So now we’re at the, “You can’t talk to them at all. You can’t even call them off Intelius,” kind of thing?
Drew: Right. And so that’s when I called that attorney that I had my onboarding call with. And I said, “Hey I know it’s only five days later, but now I have this.” And he said, “Okay, now you need to hire outside counsel.” And so, as they say, I had to ‘lawyer up’. It was a firm out of I think Denver that I partnered with to…
Michael: And so who did you work with? Or how do you even find the law firm? Is it just like a Google on a Saturday morning, lawyers for advisors with TROs?
Drew: No, I called the guys at Cornerstone because they were with me throughout the whole process, checking in and seeing how it’s going. And I called them, and I said, “Hey, this is what just showed up.” And they said, “Okay, call this person at this law firm. We’ve used her before.” And so I called her, and we started…
Michael: So can I ask who is the lawyer? Who was the lawyer of the firm you ended up working with?
Drew: Kimberley Cronin. I think it’s Cronin, Messner, Reeves, or something. I can’t remember the name of the firm. But yeah, that was…
Michael: This is what they do is dealing with situations like this?
Drew: Right. Right. And so I called her and told her what had just happened, and she was very helpful. And she basically said, “You’ve got some options. You can try to fight it, or we can try to squash this.”
Michael: ‘Squash’ meaning just ‘settle, come to some agreement, and walk away’ as opposed to fight?
Drew: Right. Yeah. She told me “I’ve helped dozens of advisors,” probably even more than that, over her 20 years. And she said, “If you didn’t do what they’re saying, you can fight it. But we could be here 18 months later still fighting it. Jones has big pockets, and they can afford to drag it out in court.” And I said, “Well, what’s plan B?” And she said, “Well, we try to reach some type of agreement with them.” Out of principle. I wanted to fight it. I hadn’t done anything that I thought was wrong. Apparently, they thought otherwise. But I said “You know what? I really want to focus on my clients. So let’s not do Plan A. I don’t want to be in court for 18 months, or however long it would take.”
And that’s around the time, because, of course, all of this is googleable, this is information in the public domain. So I’m not revealing anything here. But I think it hit Investment News. It hit a couple of different advisor publications. And I had people, people I’ve never met, from all across different firms reaching out to me saying, “Fight them, fight them.” Other people just being supportive saying, “Hey, this is still going to be the best decision you ever made.” And, oh, man, that was such a punch in the gut.
Michael: And so did you ultimately choose Plan B? Like come to some settling resolution and move forward?
Drew: Yeah, basically, all I’m allowed to say now is the matter has been resolved. We reached an agreement.
Michael: And you are an LPL advisor now?
Drew: Yeah. I’m still here. I’m alive and breathing.
Michael: So, how do you think about looking forward from here? Does it still feel like Jones and the settling resolution with them is a burden away to carry, or is this so like, “Okay, I’m done, that phase is behind me now, I’m just looking forward?” How do you think about this moment?
Drew: Yeah, that’s a tough question. It’s a little of both. I really only want to look forward, but I think there were some clients that didn’t come because they got wind of that, and it maybe scared them. And there were some of those that were just more loyal to Edward Jones than they were to me. But yeah, it definitely slowed me down for a minute. I had to deal with all that for, it felt like two weeks. I don’t remember how long it actually was. It’s kind of a blur now. But yeah, the matter is behind me, and we’re looking forward.
Michael: And I guess that’s part of the dynamic and the reality as you noted, just for large firms, like they do have deep pockets, for a lot of advisors breaking away, this is my livelihood and my career, for a lot of large firms, this is just part of the cost of doing business. We slow people down when they’re leaving so we can try to retain more clients, and maybe that will dissuade some others who don’t want to take that same risk and so the lawsuits and the TROs persist.
Drew: Right. Yeah. And I took it personally because I bled green, as they say. I was a trainer; I was on the leadership team. For three years in a row, I gave up two weeks out of my life to go to the KYC trainings just as what they call a ‘visiting vet’ to mentor those new advisors. And I was offended that they did that.
Michael: Because it felt like, yes I left, but I gave a lot to this company while I was there, but they still took a swing the moment I left, even though I really did follow the book? So what comes next?
What Comes Next For Drew, What Surprised Him The Most About Building An Advisory Business, And The Low Point In His Journey [01:32:39]
Drew: Oh, man, it’s been a whirlwind. Just looking at all the different options I didn’t have. But the dust has pretty much settled with my transition. And so now we’re looking forward to implementing some of the things we didn’t have access to before. And really just continuing to serve the client base that did come, but also getting the word out. Because at least in the town I’m in and the next town over, it’s 100%, Edward Jones. And so I’m really just out there trying to let people know there’s another option and what that looks like. And then just taking advantage of some of the business-building techniques that I didn’t have before. So we’re doing things on YouTube, with videos, and we’re blogging. I just got approval to start a podcast. Someday down the road, I’ll write a book, about what I don’t know. But that’s my mom and me and that creative writer coming out. But yeah, we’re very grateful for the opportunity that we have. And even looking back, if I knew going into this, that this was going to happen, I still would have made the same choice.
Michael: Meaning even if you knew Edward Jones was going to come after you, and it was going to get bumpy?
Drew: Right. Right. I’m much happier. I was happy as an advisor, but I wasn’t all the way fulfilled before. And now I have that feeling.
Michael: So what surprised you the most about trying to build your advisory businesses as you’ve done this over the past eight years or so?
Drew: What surprised me the most is how quickly I could build trust with people. I think I had heard, I don’t know if this was at Jones or just in the industry, but I’d heard it takes about five to seven meetings – or maybe not meetings, but conversations with someone to move them from prospect to client. And I was surprised that I was able to shorten that gap. I don’t know, maybe I have very trusting eyes. I’m not sure. But that was one of the big surprises was once I get people into the office, I think I do a good job of letting them know who I am and that I’m really there for them, rather than to serve some large firm. So I was surprised at my conversion ratio, how quick people would sign up.
Michael: So, as you look back over this whole journey, what was the low point for you?
Drew: The low point was the TRO. That was definitely the low point. Just having never gone through something like that in my life. No lawsuit or anything like that. That was a very scary moment. So I guess I would say that would be the low point for that transition.
Michael: And that didn’t resolve until you came to your agreement about how you were going to resolve and get to the point where the matter is now settled?
Drew: Right, right.
Michael: So as you look back over the whole journey, I guess even back to the beginning and starting your career with Jones, what do you know now that you wish you could go back and tell you eight years ago when you were in the AML department trying to ask people for advice about becoming an advisor?
The Advice That Drew Would Have Given His Past Self, His Advice For New Advisors, And How He Defines Success For Himself [01:42:12]
Drew: And I’ve said this a lot. And this is true of other advisors that I know. I wish I would have gotten into the industry five years earlier. I wish I would have put more faith in myself early on too, not only taking the leap to independence but just to become an advisor. Because it’s such a great job. It’s knowledge for profit. We don’t make widgets or anything like that. There’s no product per se. It lives in the relationship, at least that I’ve found. So yeah, I would go back and tell myself to start even earlier.
Michael: So, what advice would you give to other younger or newer advisors coming into the industry today?
Drew: I would say, “Spend the time with the people that matter.” Growth, at some firms, is such a heavy message, whether it’s, ‘take on as many clients as you can get’, or whether it’s, ‘recruit advisors’. Turn off that noise and really do a deep-dive in what you want, not only out of the business, but out of life, and what you want it to look like 30 years from now. A lot of people can’t think that far ahead, but I really spent a lot of time asking myself where I wanted to be in 30 years, and what I wanted that to look like, so I would encourage people to really do some soul searching. And look around, I think there’s a big – or it’s probably been going on for years, I just never knew it – but a big shift in the industry to more of that holistic wealth management model. Not just, ‘sell a stock-bond mutual fund’, but how can you really help people tackle problems that they don’t even know that they have, or uncover goals that they didn’t even know were important to them, until you had that deep conversation with a good financial adviser that was really just there to ask them the questions rather than spew a bunch of information at them?
Michael: So as we wrap up, this is a podcast about success. And one of the things that always comes up is just even the word ‘success’ means different things to different people. And so you build a successful path at Edward Jones, you’re now in a little bit of the rebuilding phase two going forward. But I’m wondering, how do you define success for yourself at this point?
Drew: For me, success is about, specifically, with my practice at least, having the clients get that feeling. Seeing that you’re actually changing someone’s life. It’s such a powerful thing. And sometimes people don’t appreciate that enough, but we’ve watched clients pass away, and get married, and have babies. And those are the most important things in their life, and we get to be there, not only to witness it but to help them take on that next phase.
So, ‘success’ to me is, the clients that I serve, are they better off after having signed up with us? And not only that, but work-life balance gets thrown around a lot, but luckily, at Jones too, I had the work-life balance. But being able to now truly be a business owner, to build it the way I want. My name is on the door. And someday, if my kids want to take this over, it’s still Stotler Wealth Management. And that to me was a big deal. And right now, my 10-year-old daughter, she’s going to be a TikTok dancer or something. She’s big into TikTok. And my son is going to be either a football player or a firefighter. But they’re both really smart kids, and they’re good with numbers, and I don’t want to indoctrinate them too young. But success to me down the road would be I’d be able to hand this business off to them with these people who, not only know them but also see them as kind of like little grandkids and in a way.
Michael: I love it. I love the very long play on next-generation succession planning so far with a 10-year-old and younger.
Drew: The kids love the videos. We’re trying to figure out a way we can do a video with them. We do our own little videos around the house. And my daughter is always drawing the Stotler Wealth Management logo and stuff like that. So they’re going to be interested in the business whether they know it or not. And if nothing else, if I raise two little entrepreneurs, then I’ve done well.
Michael: I love it. I love it.
Well, thank you so much for joining us on the “Financial Advisor Success” podcast.
Drew: Thank you. It’s been an honor.