Guiding Lights & Rising Stars: How Mentorship Shapes the Financial Industry with David Wood

Voice Over (00:01)

Welcome to the FAST Podcast, your go-to source for financial advisor strategy talks, hosted by me, Candace Byrnes, the Lead Creative Designer on the marketing team at White Glove, and with me, I have Dean Thurman, Cofounder of both White Glove and Invest Wise Financial. Join us as we dive into valuable insights from industry experts, providing actionable tips to accelerate your success. 

Candace Byrnes (01:03)

Thank you for joining another episode of the FAST Podcast with myself, Candice, and with me I have Dean as always, and we have a great guest for you today. We have David Wood, who founded Gateway Financial Partners in 1994 and is currently the Chief Visionary Officer.  

Over the decades, David has had many accomplishments as a leader and an entrepreneur that has set him up to be quite the influential figure in the financial industry.

So, David, thank you so much for joining us today. We are excited to have you.  

David Wood (01:33)

It is my pleasure; it is great to be here.

Dean Thurman (08:06)

David, I am so excited to have you on the podcast. Last time we met, you were on the outback’s of Mexico, dodging all kinds of cactuses and drug runners. It was a wild, wild time. So, you are high energy.

What is that?

David Wood (01:52)

A couple of cows.  

Dean Thurman (01:53)

Couple of cows?

Yes. It was a good time driving those Baja 1000 buggies with you, buddy.  

David Wood (01:59)

That was a good time.

Dean Thurman (02:01)

So, I really wanted David to join us on the podcast because I don't know anybody that has more experience and knowledge when it comes to the different ways that advisors set up their practices, merge with other companies, leverage their network as they grind through the career and eventually sunset it a little bit.

People start out as solo practitioners, then an ensemble, then they might go through a merger and acquisition or something. David is an expert in that space. We all want to face these types of questions sometimes in our career and David is an expert.  

So, David, what can you tell us a little bit about your experience, your knowledge around building a practice and eventually merging or selling it?

David Wood (02:50)

So, Dean, I think here is the big thing.

You know, we have been in the business for 35 years. We have been doing this for a long time. But when I look at where the industry is, there is more change happening today in financial services than ever before.  

That change really creates more opportunity today than has ever existed. If we think back to you know, when you and I started in this industry, we saw change between let us say the 1990s and 2000s and the 2000s and 2010s.

We saw changes, which was the advent of ETFs pricing changes. If we look at the last five years and we look at how the industry has changed, it is amazing.  

There are really, as I see it, three factors that are really driving the growth and opportunity for financial advisors.  

And that is one of the changes in how advisors can affiliate with firms.

We think back to 30 years ago as a typical, you know, broker -dealer model and we look today at how that model has really changed and evolved. So, we have a change in how advisors are affiliated.

50 % of the broker -dealers over the last 15 years, 50 % have disappeared through a type of merger or acquisition. So, there are less choices out there. Financial planning runs their top fifty broker -dealer.

List every year and this year they could not even put fifty firms on the list, So I think it goes to show how right there's this big consolidation of firms. We have got all of this advent of new RIA types of models or hybrid types of models that are coming about I think where we're very close to seeing over the next couple of years the first trillion-dollar RIA that's out there in asset.

Dean Thurman (04:32)

A trillion dollars?

Wow!

David Wood (04:36)

You know, and what you are going to see, Dean?

You are going to see some of this consolidation of a very, very fragmented industry right now. So, I will give you an example.  

If we look at the kind of high net-worth space, who's the dominant player in the high net worth space right now?

What firm?

Dean Thurman (04:52)

You tell me you are the expert.

David Wood (04:53)

Merrill Lynch.

Dean Thurman (04:54)

Merrill Lynch, okay, that makes sense.

David Wood (04:55)

but let us go through this.

Here is the amazing part. What market share do you think Merrill Lynch has?  

Dean Thurman (05:02)

Currently?

I think too much.

David Wood (04:04)

What is too much, what percent?

Dean Thurman (05:05)

I am independent, so we are trying to take their clients.

David Wood (05:09)

What percentage of the market share do you think they have?

Dean Thurman (05:11)

I would say seventeen and a half percent.

David Wood (05:13)

And Candace, what do you think?

Candace Byrnes (05:15)

my gosh, I have no Idea.

My sister works for Merrill Lynch.

Dean Thurman (05:18)

Well, we will stay away from her clients then.

Candace Byrnes (05:21)

You would think maybe I would know something.

David Wood (05:23)

It is 2 %, right?

So, we have an incredibly fragmented industry, so we have a fragmented industry number one. The second factor is that more people than ever need financial advice. We all know the statistics 10,000 baby boomers turn 65 every day so we've got this big need for advice we've got big changes in how advisors can affiliate and then we throw in what I really think makes the perfect storm and that's a third of our industry is going to retire in the next 10 years so we put all this together.

Dean Thurman (05:50)

Well, say that again.  

Sorry to interrupt, David, say that again.

David Wood (05:55)

A third of our industry is going to retire in the next 10 years.

Dean Thurman (05:58)

That is a huge statement. And that is at the crux of this whole podcast episode. What do these people that are thinking about retiring, and they might be 15 years away from retiring, but I hear is a lot of them are adjusting their practice now to prepare for that, but a third retiring and that is accelerating.

David Wood (06:21)

The next challenge with all those people retiring is we have a bigger need and then we do not have enough financial advisors to get into the industry. So, when we started, I thought the barrier to entries was still low, but it is hard to build a book of business. When you and I started in this industry, we could sell a mutual fund and make an e8.5 % commission and that was the normal front-end load on a mutual fund. If we did that today, we would go to jail. So, I think part of it is right, we look at that pricing compression in a fee -based advisory type of environment, without some type of kickstart for new financial advisors, it is difficult for folks to get in.

I think part of what we are seeing is to get that next generation in, one of the big keys is I think to find older advisors. I was at a conference in Philadelphia a couple of weeks ago and someone asked me, how are we having the success of getting next generation advisors in and how do you do it?  

I said, you find the old advisors, right? if you find those old advisors. I think one of the things that I have really seen in this industry, there is this big segment of these older advisors that, you know, retired five years ago, they just did not tell anybody, right? So, they have slowed down, they are not keeping up with technology. And when I look at how AI and I think really two things, one, how AI is going to affect this industry, but also, the clients have a much higher expectation for the client experience.  

That is becoming extremely hard for those solo advisors to really accomplish. When I look at financial services, I think one of the tipping points that we are in. This is similar to what happened with doctors. If you go back to 2002, 75 % of doctors owned their own practice and 25 % worked for a hospital and aggregator.

When you look at that doctor in 2002, what did that doctor practice look like?  

It looked very much like a small financial advisor or a small ensemble financial advisor practice. It was an advisor, or a physician's assistant, right?  

So, we had a power planner, and then we had some type of administrative help, similar to the doctors. If you go to nine years later, 2011, those numbers flip -flopped. 75 % of the physicians were working for some type of aggregator, and 25 % were still owning their practice.  

Today, I think very, very few doctors own their practice. I think part of that transformation, I see so many similarities in financial services where the solo advisors and the small ensemble practices are under so much pressure to do more. It is very hard to scale that.

So, I think partnering with firms and partnering with organizations that bring more scale. I look at, you know, your success with White Glove is a way for advisors to outsource part of their marketing activities. A firm like ours; we are helping advisors outsource, really, we call it the front and middle office resources and advisor needs. I think one of the trends that we are really seeing is advisors really need to keep up. I think now is an environment where a segment of this industry has its head in the sand and is not keen to how quickly things are changing.

I flew in this morning, I landed at three o 'clock this morning and got back from a three-day conference in Florida, where the talk is all about technology, AI, and M&A, and how all these factors are really disrupting the whole industry right now.

Dean Thurman (09:57)

Well, David, that is a lot of information there.  

I mean, it just goes to show how complex and how much things are changing for just a regular guy or woman who just wanted to be a financial advisor. You know? Let us talk about numbers, some dollars, and cents a little bit.  

Let us say that there is an advisor out there and he is 50 years old, He's been an advisor for 25 years, and he has a son or daughter that is getting into the business, He does not really want to do it so much anymore. He has, let us say, $75 million assets under advisory. What are the challenges that he is looking at when he starts thinking about what his practice could look like moving into the future so he can best serve his clients and still be true to the next generation that he wants to bring in?  

Then I would ask you the same example but for somebody that does not have a succession plan already in place with a relative or an employee that is working there.  

What are their challenges and what are their opportunities and what kind of dollars are we talking about that they could look at?

David Wood (11:13)

Sure, so I think when we look at valuations you know we read about the valuations in the industry press of these large firms that are merging and being sold many cases to private equity. If we look so far this year in the industry and we are here in May, there have been about one hundred and fifty deals and about seventy-five percent of those were made by private equity backed aggregators. So, part of this is what does that practice look like? And what does the firm look like? because there is a big valuation difference between the solo advisor who has seventy-five million and the well -scaled firm that has seven hundred and fifty million or seven point five billion. So, the valuation differentials here as those practices get bigger, evaluations go up. There are a few reasons for that. One is that those larger firms typically have way more infrastructure in place, better client experience, and the ability to scale better processes. These are things that in most cases the smaller practice advisors are lacking.

I would say to that advisor who is contemplating the future, one, I think the sooner you can get next generation talent into the practice, I think often the easier it is to survive. And when I say survive, one of the shocking things to me is there's little organic growth in our industry. So, if you look at the last 10 years, organic growth has only been about 3%. Now advisors get deceived into growth and I will tell you how they get deceived into growth.

They get deceived into it because they have an environment where the market goes up 25 % like it did last year and their revenues grow 10 % and they think that business is good but so much of their growth is due to market performance.

When we look at this there is not a lot of organic growth. So one, I think there's a lot of risk for older advisors who don't have some type of succession plan and we have got next gen advisors that are using their young age, their youth and inexperience to compete against older advisors and here's one of the ways that they're doing it. If I am a 60-year-old advisor, I think I would have an increasingly challenging time attracting the 40- or 50-year-old client.

And one of the things that we are seeing with our next -gen advisors is their comment is, “well, I am going to be here. I am going to be here in five or 10 years when you retire.” “I am going to be here for you. And I am going to be 40 or 50 years old when you need me the most, which is in your early retirement years.” So, I think this aging generation of advisors, those advisors are not attracting one, I think all the clients’ assets, but two, not attracting those next gen clients because there is not a perceived succession plan. So, I think the sooner that there is a succession plan in place or younger talent within those firms, there is more success.  

Dean Thurman (14:24)

Let me ask you something about that, David, if I could. It is so funny you say that. Obviously, I still do a lot of seminars as co -founder of White Glove and a practicing financial advisor.  

We have four advisors in our practice under the age of thirty. What I am finding is their closing ratios are higher than the closing ratios of those of us that are in their fifties. I am shocked by it.

I just noticed that over the last year. I was saying the same things that you just said internally in our office. And I was shocked by it.

You are the first person that I have heard actually address that. you could not be more spot on with that. The adage of “you want an old attorney and a young doctor.” People also want young advisors is what it sounds like. So could not agree with you more on that.

David Wood (15:19)

That is, it. So, I mean, I sit and look, you know, number one, there's 60-year-old advisors that look like they are eighty and there's 60-year-old advisors that look like they are forty, right? So, I think that these older advisors are struggling, and I have met your young team, and it doesn't surprise me that they are successful in closing because the clients, look at that and they know that those advisors are going to be here for a long time and they also know they are part of a larger organization. All those things bring comfort to that relationship. You know, we have helped about thirty advisors make acquisitions in the last three years and I will share a couple of real-life examples of what we have seen.  

We have an advisor that acquired two practices last October in the Chicago area. One of those practices, he is going to three times the revenue in the first year that he has owned the practice.

Dean Thurman (16:11)

Wow.

How did he do that?

David Wood (15:19)

It is really simple. So, part of this is if you look at the makeup of the seller.

It was a 70 -year -old seller who was not using technology, did not have a very good client experience, did not have a great service model, and had very weak processes internally. When we fixed all of that overnight by having a big marketing team, big operations team, technology, we came on day one and completely changed the client experience.

Here is what that led to. That advisor got a $7 million check this week from an $80 ,000 client.

So, it was an $80 ,000 client that he purchased, and he got a seven-million-dollar check when the client sold his business.  

Dean Thurman (16:58)

Wow.  

Candace Byrnes (16:59)

That is amazing.  

David Wood (16:59)

He has another client that had nine hundred thousand with the advisor and after two or three meetings brought over another 2.8 from another firm.

So, what we see is this, the client experience is important. I think the older advisors, especially the solo or the small ensemble practices, are struggling to provide that experience the way that the scaled organizations can. When it happens, we see a big attraction of those new assets.

So, part of it, one, is really change the client experience. Technology is a big part of that. When you look at what marketing is, marketing is really providing a client experience at scale. When you do that, these advisors are attracting substantially more assets.  

When we start to look at those acquisitions, the money is really made when you can make an inorganic acquisition and then grow it organically. That is where the money is really made.  

Dean Thurman (18:01)

My guess is if somebody is like, know, getting to pivot out of the business at 70, they are, and with all due respect, sleepwalking through their practice for the last ten or fifteen years. They get that recurring revenue. We all do it to a degree. But, then if you stop really looking at your practice as something that you want to grow and invest in, Not real ambitious about it, you still want to do a good job, but that looks a little bit different in your sixties than it did in your Thirties. When you really are looking for, you know, a great reputation and going above and beyond.

Once you have already established your practice and you have that good relationship with your clients, it is easy to take your foot off the accelerator a little bit and like I said, sleepwalk through it, so somebody coming in and buying that practice or merging or some form of that.  

I would like you to go through a couple of the different options that maybe that 70-year-old was looking at.  

There is the sell and stay, there is the partnering up with another group, sometimes you switch broker dealers or FMOs, sometimes you don't or RIA.
What do some of those options look like and could you go through some of the pros and cons? Certainly, somebody that has a $75 million practice that is getting up late in their career has more than one option.

So, I would be curious as to your opinion on just an outright sale versus a sell and stay. Most people do not have that next generation succession plan. So, what are their options? I hate to be crass, but they could die any day. I mean, any of us could, but it is more likely when you are older. You could die any day or just get fed up with it. And quite frankly these older folks and I will not put myself in that category, but I will be fifty-seven this year.  

You alluded to it earlier, our regulation environment looks a lot different now than it did back in the day. You really have more continuing education, a much more and rightfully so compliance department and overly aggressive regulators, which also in many cases, rightfully so.

People are just sick of it, they sleepwalk through their practice, and now it is time to go into the final stages. What are the pros and cons of people's options?

David Wood (20:35)

You touched upon those regulatory things. Here is the difference that I really see, Dean. The ability for an advisor ten, fifteen, or twenty years ago to coast into retirement, I heard this so many times, “why sell?” “I'll just continue to collect my trails, why sell it?”

And those factors that you mentioned, the regulatory environment, the need to keep up with technology, these are all things that put pressure on that advisor. But there is a whole other piece of pressure. I am going use White Glove as an example, and the pressure is what White Glove does.

So, what White Glove does is find those retirees and pluck them away from that seventy-year-old advisor who has not talked about social security, or planning, and those clients feel that they are looking for more and they want other options. So, they attend the seminar and marketing is attracting these people away. And when they see the thirty-, forty- or fifty-year-old advisor or team, like you have, it is the best of both worlds.

I have a fifty- to fifty-seven-year-old advisor and I have a thirty-year-old advisor working together as a team to collaboratively help me and help my family long term.  

You are not only preparing the money for the kids, but you are also preparing the kids for the money. You are here now as a generational tool to keep those assets long term. If I am the next gen, we look at the statistics, very few of those next gen clients, whether it is the wife of a husband that had passed away or the children’s parents that passed away, very few of those relationships keep their financial advisor.

I think one of the things that you are doing now by having a co -advisor working with you is that you are helping preserve the value of your practice by making it intergenerational and then keeping those assets for that next generation. So, this is one of the challenges that these older advisors have is they are under pressure because their practice as clients is getting older and passing away taking RMDs, they have a declining asset, right?

As those clients get older, they are spending that money, there is no longer an accumulation phase. We are really in an environment where it is either grow, or there is going to be continued pressure on these financial advisors and the pressure is one regulatory, but then the second thing becomes the marketing side.  

What does an advisor do? I think one of the one of the key things if you are not ready to outright sell, is a sell and stay. It is one of the best and often overlooked options that advisors have. And a sell and stay, an advisor would sell part of their practice today, 65 or 75 % of the practice they would sell today, but they would bring in a co -advisor, also known as a younger advisor, to buy that business and help them preserve and grow.  

I have an 83-year-old advisor with our organization. He has been here for 30 years, did a sell and stay five or six years ago. He continues to tell me it was the best move he ever made because he can still be active in the business. He wants to be here, wants to continue to add value.  

Advisors love what they do, and they do not want to retire. They have a servant mentality, they want to provide financial advice to clients, they are not ready to walk away and go off into the sunset, but they also know that they need younger talent.

I think a sell and stay for both the buyer and the seller is an attractive way to have that succession plan.  

Most importantly, so many advisors do not have that succession plan. To anybody that does not, I would encourage them to immediately put something in place because this is something where very often the largest asset a financial advisor has built is the value of their practice. They want to make sure that they have an insurance plan, which I often think a sell and stay does, but they have a plan in place. One if something should happen and that is for every advisor, even that 40- or 30-year-old advisor should have a type of contingency plan in place if they get hit by the proverbial bus. Certainly, as age goes on, it becomes more important.  

Again, I think the competitive pressures of the industry, if you want to preserve that asset that you have, one is you got to look at the growth. When you look at these firms that are getting these higher valuations, they are getting the higher valuations because they have had higher growth. That becomes part of what these buyers are asking.

They are asking questions about, you know, not only the assets, but they are also asking questions about your internal processes, the client experience, and then also the growth that you have had. If there is no growth there and you have a bunch of older clients, those are practices that that really are not worth much, if there is strong technology and integrative processes and a great client experience those are the practices that are getting those higher dollar values. One of the things and I do not think that this is just for the older advisors, but I think advisors in general are going to see continued mass consolidation among one, these big national aggregators, your Allsworth, Beacon Point, Creative Planning, Mariner, we are going to see more consolidation into those aggregating firms.  

And we are also going to see aggregation among the aggregators to create that trillion-dollar RIA. We are also going to see more of the solo advisors going back to the solo doctors, you know, joining firms like yours, joining firms like ours, we really provide a full range.

I think in general we are not looking for a doctor or a Financial Advisor to sell to us. We do have an equity alignment program, but we are not looking for them to sell. We want to support independent advisors, give them the scale to outsource all of those non -revenue producing activities.  

Similar to what White Glove is doing. White Glove provides the ability for an advisor to outsource a specific piece of marketing. They are not outsourcing everything to White Glove, but I think the success, when you look at the doctors, and my neighbor is a doctor, he is a very successful doctor. All he does is see patients. He is not dealing with all of these other complexities of the business, the technology, the HR, the marketing. He is not dealing with all this. All he is doing is seeing the patients, and that is one of the changes that we are going to see in financial services is the financial advisor needs to spend more time in front of a client and less time doing all of those other administrative tasks. I think part of what is happening is that is forcing those solo and small ensemble practices.

Even now, some of the larger practices, we merged with a $3 billion RAA two years ago because again, there is a $3 billion RAA that was struggling to get enough scale. This fragmentation is going to really start to consolidate up the same way that the broker dealers.

Dean Thurman (27:54)

Now how does an advisor take advantage of that, David? as all this is happening? A 60 -year -old advisor, how would he or she take advantage of all this opportunity that you are talking about? What would you do if you were them?

David Wood (28:07)

It is about finding the right partner. There was a great question asked yesterday at a panel on mergers and acquisitions at this conference in Florida. It was, how do you make the firm not grow into the wire house? And I think some of these large RIAs are going to grow back into the kind of the wire house mentality as they get bigger.

Here is one of the interesting things about independence. You mentioned, boy, I do not want to be at Merrill Lynch. I do not want that employee model. The wire houses are losing a substantial amount of their financial advisors to independent models. One of the challenges with independent models is that there is often too much independence. We go from having all of these services provided to us with a good process, all of our technologies provided, our administrative support marketing, all of this stuff is provided, then we go to independence where now they have to figure all of that stuff out on their own. There definitely is a happy medium there. The happy medium is firms like ours. There are a number of other organizations within the industry that are allowing advisors to remain independent, but then outsource all of those non -revenue producing activities with a lot more scale, which leads to a lot more growth. When I look at the advisors that we have had made these acquisitions on, they have really relied on our marketing team, and our operations team to help them get through all of those processes of those acquisitions and then ultimately grow. I think advisors in all stages of their career right now really need to focus on scale.  

I am shocked at the number of state registered RAAs that are popping up every year. There are thousands of states registered RAAs. I think the last number I saw, there are 15 ,000 RAAs that have less than $100 million. That is a trend that is going to go away. It is going to be like the doctor that tried to maintain independence and do everything out on his own, I just do not think that is going to be the way of the future.  

The way of the future is to find a partner you can align with that gives you the independence you want without being completely alone and having to do everything by yourself. That is what I think is going to be one of the challenges that advisors are going to face moving forward.

Candace Byrnes (30:33)

David, I have a question then, you know, a lot of this, I sit as a fly on the wall. It is interesting; I can learn a ton from both of you. I feel like we are talking a lot about advice or answers, you know, that you would give to these higher, like older advisors. But if we can focus a little bit more on the next gen advisors, which I feel like is what you were just touching on is, what advice would you give a next gen or a younger advisor that is getting in? It sounds like the perfect plan would be to partner up with somebody who already has that book of business, but where would you push somebody to start that journey to find someone?

David Wood (31:18)

Right, so that is an awesome question. One, when we start to look at some of the demographics of the industry, we are going to see a lot more financial advisors who are women. I think women financial advisors in the next 10 years are going to be one of the fastest growing segments of new advisors. And I say that because Dean and I grew up in this business selling products to people. That is how we grew up, now today we are in a relationship business, and women are much better at that.

one, we are going to see a lot more women get into the financial services space. And that diversity is really awesome for the industry and something that I am very active at supporting and something I am very passionate about.  

As far as younger advisors, again, it goes back to what I said before about if you want to be a younger advisor, there is so much opportunity. There are more opportunities today for young advisors than ever before, but the key is then to partner up with somebody. I think one of the challenges, though, in doing that is about 90 % of the transactions, the mergers and acquisitions last year.  

Let us just take acquisitions. 90 % of the acquisitions made last year were made by repeat buyers. So, one of the challenges is that 30 -year -old advisor that wants to make an acquisition, in a lot of cases they have limited experience in doing that, or they have limited financials to be able to do that. How do they get in to make that acquisition? They really need to partner with someone like us or another organization that has access to those older advisors' experience in helping them through that transaction and then three access to capital to help them do it.  

When I look at our advisors one thing you know is if you want to find a younger advisor how do you do it? You find the older advisor to create that opportunity first. Our firm is active in finding those older opportunities. Part of this is just being in the business for 30 years we have advisors that we've retained over that entire period of time that creates an opportunity for us number one but then number two we've got a number of different methods that we are going out to find these acquisition opportunities, either through partners that we partner with or other recruiting or direct solicitation methods that we do to find these older advisors are also just experience in the industry. So, I think if we find these older advisors, it creates the opportunity for the younger advisor to get in. That is a way to come in and jumpstart your career. The other thing that we really see with next gen advisors is in some cases they think that sales are bad. Dean and I grew up with sales and I think some of the second and third generation advisors think that sales is bad and I think they need to kind of reframe that. Sales are not bad, and I use the analogy that If I were to buy a Rolls Royce or a Hyundai tomorrow, there is going to be a salesperson involved in both of those transactions. The way that that transaction transpires though is going to be very, very different. When I go in to buy the Rolls Royce, I doubt the salesperson is going to say, you know, am I looking to lease or finance or how much can I afford a month or, if we come to a deal today, would you take delivery today? It is the end of the month; I can give you a good deal.  

Those things are not going to happen with a Rolls Royce. So, I think when I look at these next gen advisors, they need to be able to sell and communicate with the clients in a fiduciary world in a very sophisticated way. Part of it is one of the big keys is just to partner with an organization that can help them through that. And then I think for the organization, for us, we need to be keenly aware that next -gen advisors are going to operate differently than Dean and I did when we started in this industry. The firms that are succeeding in this space are succeeding by listening to what those next gen advisors want. And what they want is they want less complexity, they want an amazing tech stack, and they want to use the tech stack. They want to be paperless; they want efficiency, they want to do all of that and grow in a way different than the way those older advisors are.

We still have some older advisors that print out every email. A younger advisor is not going to do that. They want those efficiencies. They also want the information twenty-four -seven. When we think about how, when Dean and I started, the clients would get their monthly statement, and that is how they would get updates today using technology. People want that technology twenty-four -seven.

So, those next -gen advisors need to find an opportunity, and a lot of those opportunities are going to come from a more scaled firm. And then the second thing is, is the firm needs to really listen to those next -gen advisors keenly, and I think engage them differently than ever before, because if they're not going to provide what that next -gen advisor wants, then the firm and the advisor are not going to succeed, and that advisor is going to leave.

So, I think the firms that are succeeding are listening to those next generation advisors and giving them the tools and resources that they need to run the business the way that they want to run it, which is different than the way, you know, Dean and I grew up.  

COVID was one of the best things that happened to our industry was horrible for the economy, horrible for a lot of people. But it was great for financial services, for advisors that embraced, you know, the new norm. I think part of what the new norm is, especially on the M&A side, is the ability to service clients in a very, very different way than ever before. We have done a number of out-of-state acquisitions, which I think ten or fifteen years ago, if Dean were looking to sell his practice, he would find the advisors in his town who could potentially buy it. Today, we are finding acquisition opportunities across the country, because in a lot of cases, the clients have moved all over.

Using technology, we can create a client experience and support people everywhere. I do not think we are going to lose human touch. But so much of this can be done remotely. I think that transition for advisors that did that during COVID saying, “hey, since we cannot meet, let's meet virtually.” And the clients started to enjoy that environment. That is, again, something that the next -gen advisors really embraced. And the folks that did it saw a growth in their practices over time.

Candace Byrnes (37:43)

That is really interesting. I actually never even thought about that.

Dean Thurman (37:45)

Yeah, I could not even spell zoom five years ago, so David is spot on with that.  

I think we are getting to the end of our podcast here.

David, this has been such a wealth of information. Certainly, learned a lot.  

Candace Byrnes (37:59)

Obviously same.  

Dean Thurman (37:45)

It is so complicated. There are so many different directions to go. There is so much to think about.  

Man, when we got into the business, we just wanted to help people invest their money, put in an IRA, and just watch it grow, do a little financial planning software, and make a friend along the way.

Nowadays it is a real business. You really have to look at it like a business. You have to prepare for all the different variables in your business. And as you get later on in your career, you know, working with a company like Gateway or similar you definitely should keep them on the short list to talk to. You will certainly be smarter for it. Whatever direction somebody decides to go.  

David, before you go, Candice is going to have a question for you in a second, but before she asks her question, is there anything else that you wanted to cover today that you could tell somebody out there that doesn't really know what way to go, but know they are kind of done with the industry and they don't even know where to start? Do you have a short little tidbit for them?

David Wood (31:18)

The biggest thing is about embracing change. I think given how fast this industry is moving, the divergence between good and great is happening so quickly. The big in this industry are growing incredibly quickly, and the smaller and mediocre are not. So, I would really encourage people, one, embrace change and do not wait because I think that this industry is going to look completely different in 10 years than it does today.

Dean Thurman (39:44)

Yeah, back in the day when a young advisor like myself wanted to find somebody to kind of hook up with and maybe take over their practice, we would just go to a conference, look for the oldest people at the conference, eating breakfast before it starts and plop down right next to them.

That was the only way we used to do outreach.  

Candace Byrnes (40:01)

I feel like that is not far off still.  

I feel like a lot of that still happens.  

David Wood (40:04)

It is not. The only difference now is that everybody's 20 years older than they were before.

Candace Byrnes (40:08)

Well, David, I do have a question for you. I actually am so excited for your answer just because I love that today's episode had so much focus on people from all different sides of the scale of life within the financial industry. We are talking about people who are trying to exit, sleepwalking through the last 10, 15 years. Then we are talking about the people who are just trying to get their feet wet and figuring out where to go. So, I really love this, and I really enjoyed getting to hear all of your advice towards either side of it. But I hope this does not hit you out of left field, but if you could go back to any part in your career, whether it be the very beginning or maybe it be five years ago, What is something that you would do differently knowing the knowledge that you have now through everything that you've learned, you know, watching these new young advisors, watching these old advisors, what's something that you would have changed or done differently back when, anytime?

David Wood (41:13)

I think there's always things we would have done differently, part of it is to readjust the mindset. I think I have always tried to have a mindset of, “hey, let the past be the past. We have to focus on what is going to happen in the future.” I will give a good example of this. I have my pilot's license. I have been a pilot for 20 years. Often when things go wrong, how people react to what goes wrong and adjust to it, that is the key to the outcome, right?

We cannot fix what went wrong. So, when we talk about flying an airplane and when something goes wrong, they talk about “aviate, navigate, and communicate.” So, the first thing is fly the plane. The second is navigate, find a place to potentially land if there is a bad situation or figure out where we are going to go next and then three, communicate. When we look at problems, if we take that mindset and look at that as when things go wrong, put a process in place to address it, that is the most important thing.

When we look at what happens with flying when something goes wrong, if we are not focused on flying the plane and we are focused on a potential problem, then that can lead to other bad things. So, we have to focus on the basics first.  

When I look back, it is more about “what would you have done differently?” There are always things we would have done differently. But I think to have a good mindset as to how to address the outcome, that is what is going to lead to the most success.

Candace Byrnes (42:36)

Actually, I lied, I have one more because I feel like you have a lot of good advice. So, let us say what would your elevator pitch answer be if a young advisor came up to you? You know, they, they are one year in, they are six months in. What would you tell them? Where would you tell them to start?

David Wood (43:00)

Let us start in what respect?

Candace Byrnes (42:36)

Just like where and how should they start their path into their journey into the business. What advice would you give them? Going into the field head on?

David Wood (43:00)

Getting into the industry, I dropped out of college. It is all I have ever done. I am incredibly passionate about the industry. I love it more today than ever before.  

The next gen advisor, you know, one is to partner up, find older advisors to get experience and advice from, but also look at a lot of the industry trends. I think there is so much value in attending some of the big industry conferences to really see what is going on in the industry. And when you look at the people that are there. Those are the people that are growing fast. So, I think I would really encourage a younger advisor one to find a bigger firm that the I think the ability to do this business alone is quickly coming to an end because I think that the talent and sophistication is getting way better. It is going to be very hard to get up.

one you have to accept that and find a good partner to partner with and then look for, acquisition opportunities. For a younger advisor today, given those dynamics of a third of our industry retiring, that creates I think more opportunity than ever for an advisor. So, when we started, Dean and I needed to find those clients one at a time because the average age of the financial advisor was our age today. It is old, right? So, Dean and I are still close but not really at that average age. The average age of the advisors is older than us and I see so many advisors in their seventies, even eighties.

Those younger advisors look for those opportunities because that is going to be I think rocket fuel to grow I do not think an acquisition is right for everybody we have advisors that are using white glove and very successfully building a practice using seminar marketing they have become very good at closing and getting the people in the door right but that takes a lot of time and experience. Those advisors have some type of organic niche. If there is not that organic niche which very often with the younger advisor there is not, I think one of the best ways to jumpstart their career is through that acquisition or sell and stay process.

Dean Thurman (35:29)

Well, thank you very much, David.

My answer would have been to do seminars. Tell the young folks to do seminars. But seriously, yes, it is all great information.

David Wood (45:35)

Absolutely.

Let me give a shameless plug from White glove.

I got a message from one of our advisors who we did a workshop on two nights ago and Got appointments back from everybody who attended except for one. He has had tremendous success with White Glove, and I specifically asked them the question last week I said on your investment what type of return are you getting? and he said, “I'm Four-exing my return on the investment.”

So, I will say a pretty good investment to me.

Dean Thurman (45:11)

Yes, like you said, there are a lot of folks out there that feel orphaned by their financial advisor who's just kind of sleepwalking through the last part of their career. And a great way to find those folks and hook up with them is through seminars. That is certainly how we grew our financial planning practice.

So, David, thank you so, so much. Great information. And if anybody wants to reach out to you, they know how to, how would they get ahold of you?

David Wood (45:31)

They can just email me at “D Wood”, “DWood@joingateway.com” or “joingateway.com” is our website. Awesome.

Dean Thurman (46:37)

Thank you, David, and Candice, thank you so much for letting us, you know, financial industry folks really go on and on about our very complicated industry, but we appreciate you.  

David Wood (45:31)

It was fun.

It was great spending some time with the both of you.

I will see you soon.  

Candace Byrnes (46:55)

Thanks, David!

Goodbye.

Voice Over  

Thanks for tuning in to the FAST Podcast. We'd love to hear from you. Have any questions or comments about the show? You can submit them on our website at WhiteGlove.com slash FAST podcast. The views and opinions expressed by our guests do not necessarily reflect those of White Glove or Invest Wise Financial. The content is provided for informational and educational purposes only and should not be considered as a substitute for professional investing advice. Once again, thank you for joining us on the FAST Podcast. 

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