Kurt Dupuis:
Welcome to The Whole Truth, where two wholesalers help financial professionals build great practices and thrive in a rapidly changing industry. We'll bring you the stories and voices from those on the front lines of this change, and we'll have some fun along the way.
Steve Seid:
We're building a community of financial professionals who are growing, forward-thinking and want to get better. Thanks for listening and contributing to the discussion.
Disclosure:
The views expressed herein are those of the participants and not those of Touchstone Investments.
Kurt Dupuis:
And welcome to The Whole Truth. From Atlanta, Georgia. I'm Kurt Dupuis.
Steve Seid:
And from the Bay Area California, I am Steve Seid.
Kurt Dupuis:
Dan, where are you coming from?
Dan Sullivan:
I'm calling in from Boston, Massachusetts.
Kurt Dupuis:
Boston.
Dan Sullivan:
Thank you for having me. It's great to be here.
Kurt Dupuis:
Dan, awesome to have you on here. This is going to be kind of a two-fer episode where we'll put it out there on both platforms. If you remember why we created this podcast, it really started as kind of a value add for our clientele, which is financial professionals. And so as that has evolved over the last several years, what are we, at almost 70 episodes, we continue to just explore ways to bring content and ideas that are actionable to the folks that listen. So Dan, for those that may not be familiar, can you give us a quick synopsis of your podcast?
Dan Sullivan:
Sure. I am the host and producer of the Internal Use Only podcast, a podcast that is for financial professionals by financial professionals. Our core audience is wholesalers, those that are involved in the sales or distribution community for your lovely fund companies, much like the Touchstone Group here. And it's also grown to now include a number of advisers and service providers who are all intertwined in this community that we call financial services. So we have many episodes that vary in topics, so we get to some fun stories and real unique perspectives on the show.
Kurt Dupuis:
Awesome. What we thought we would talk about today is something we'll call “This or That?”, which are kind of the choices, decisions that one must make when working in financial services. So Dan, I know you've had a few people on the show recently, for example, that have moved from wholesaling to financial advisers so we'll talk a little bit about that. Talk a little bit about your story from leaving the wholesaling world and going over to the FinTech side, which is probably another fork in the road a lot of people are confronted with. And then we'll talk about wires, independents, different things that we see in those two cohorts. And then can't wait to hear this, some perspectives from Seid talking about getting into management being just a total suit now versus an individual contributor like a wholesaler.
So the decisions that went into those, painting the picture of what both sides were like when those forks in the road come. So let's just jump in. Dan, I know you've had a few people on your show recently that have talked about the path going from wholesaler to financial adviser, and if any wholesaler is telling the truth, they've all thought about it.
Dan Sullivan:
Yeah, I would say there's probably been about six episodes that I've had of the 54 that have been launched where the individual that I'm interviewing is currently an adviser and began their career as a wholesaler or spent a significant amount of time as a wholesaler. And it's so interesting because any wholesaler amongst their teams, with people they've talked about, they're having what, thousands of meetings per year, compound that over however many calendar years. That is so much exposure to a specific role that it's a natural transition for a lot of people to go from a sales role at an asset management firm to going over the fence to be an adviser as a producer or joining a team for a group that they know fairly intimately for a role that they know pretty well and for a career path that's adjacent enough where you could use your skillset but move on to a fundamentally different role, which is going to be managing wealth on behalf of clients.
Steve Seid:
So talking to these people, did you find generally overall that they were happy with their decision? What are the pros and cons? What were the struggles? Did I make the right choice? 'Cause it is a leap. I mean, you take, what, in the wholesaling world, and I'm not speaking for every wholesaler position, but it's generally a pretty well compensated position, and you go over to the adviser side, you're probably giving something up depending on the situation. So what kinds of things did you hear?
Dan Sullivan:
I think the preparation or the thought process prior to exiting the wholesaling world was a common thread for all of the guests and all of the anecdotes, which was that those that seriously considered moving over and that did, they saved up for a while.
Steve Seid:
Yeah.
Dan Sullivan:
And I can reference one recent guest of mine who was phenomenal, she was great. She was a wholesaler in California for more than 10 years and then started at a new firm recently. And if I remember, I think she had almost a three-year runway saved up where it was an intentional... Obviously you're going to be losing that reliable income from the wholesaling route and you are more or less starting small. You're not inheriting a book of business…
Kurt Dupuis:
Sure.
Dan Sullivan:
…you don't have a client list. So the preparation for that grind, at least from a dollars and cents standpoint, was a very common theme. I know another individual I interviewed, I think she had a full year saved up, so there was some deliberate planning prior to making the switch.
Kurt Dupuis:
Where did most people land? So we're going to talk about wires and independents later. Do people tend to go to wires or independents? And I guess secondarily, are they doing it on their own? Or I'm assuming they're almost always joining a team, right?
Dan Sullivan:
Mostly with the team and mostly to wires, at least from the very small sample of individuals that I interviewed. Interestingly, I also think that the knowledge of some of the operational functions are more relevant for someone who's at an RIA1 or a group that's more of a, let's call it a small business, where you can do things that aren't just potentially garnering new assets or bringing new clients on board. You're really helping out with some of the nuts and bolts of running the practice day to day.
Steve Seid:
Hmm. Did you cover motivations like why people made it? What was it? Was it a simple career change? Was it tired of being a wholesaler and what that entails? What were the motivations?
Dan Sullivan:
I found that for a few of the guests there was definitely some kind of life event or some kind of factor that made them feel more confident that the adviser career path and lifestyle would be a little bit more stable or fulfilling going forward.
Steve Seid:
Yeah.
Dan Sullivan:
So working directly with people. I appreciate that perspective because one of my favorite parts of the wholesaling world is you get to meet all these really incredible people and they're really impacting the lives of their clients. And I think if you ever experienced that from a wholesaler's point of view, you realize, wow, that would be pretty fulfilling and unique to be able to help someone achieve goals in their life…
Steve Seid:
Oh yeah.
Dan Sullivan:
…and to be there for their significant life moments. But on the other side of it, I think that there's some degree of burnout almost of the wholesaler role that makes just saying, hey, I don't want to do this forever, it makes it an easier pivot.
Arguably, I would say that was more applicable to some of the younger career folks that I interviewed where they were, let's say between the ages of 30 and 35, and they realized that by the time they're 55, their career path isn't going to be as an external.
Steve Seid:
Yeah, I'm always telling newer people, like if we hire someone off our sales desk, for example, to be a wholesaler or newer wholesalers, this is the long game. And I know everyone has sales goals to hit, but it is interesting how few people last a really long time as wholesalers in a job that should be a place that people want to hang out for a while. So that's really interesting to me. But when you meet the wholesalers that have done it, I mean, to me, they've taken just the long-term perspective. They're not going to live and die by every month. They're not going to get overly stressed out by what's happening in the markets or a product that's underperforming. So I guess I would say as a long-winded way of saying that some people just can't do it, and then that's a natural pivot to them would be to go over to that side.
Kurt Dupuis:
What I'm curious about though is probably some very real survivorship bias here, but I'm assuming you have people on your show, they're happy, they've been doing this a while. They are happy with the decision, looking and kind of doing a postmortem.
Dan Sullivan:
Yeah, oh, yeah. Yes. And those groups that came on, they were almost making the transition still early in their advisory careers so part of the reason why they made a great guest for the show was we were having a real time discussion about what'd you consider? What are you still kind of concerned about? What are you hopeful about? What do you regret about leaving that path?
Kurt Dupuis:
While it's still raw.
Dan Sullivan:
Still raw, still raw. And then now some of these decisions too, which we will get to this when we talk about my career path and where it's gone now, a lot of these decisions got made in a quite narrow window following a global pandemic, which changed a lot of people’s…
Kurt Dupuis:
Yeah.
Dan Sullivan:
…thoughts and perspectives. So I think there still could be history written on good decision versus bad, but that's where we're at now, just live evaluating all of this.
Steve Seid:
Wait until we get into my decision of management versus wholesaling. We will get to that part when I'm in that section.
Dan Sullivan:
Steve, I'll tell you what, the number of people that have asked for the podcast to cover that discussion of management versus external wholesaler, oh, I can't wait. I have so many questions for you and I can't wait to hear that experience.
Kurt Dupuis:
I talk with Seid all the time, but I can't wait to hear this.
Steve Seid:
Yeah, well-
Kurt Dupuis:
So I'm pumped.
Steve Seid:
I can only just say in my two sections, I'm going to cover the wires versus indies and the wholesaling versus management. These things are not straightforward. They're real decisions to be made, and so there are real cons and there are real pros. So anyways, I digress. We'll talk about that more later.
Dan Sullivan:
If I could maybe bullet point a couple of the themes too, that wholesalers shared as far as what the experience was like once they did cross over the fence to the adviser. I think these are interesting where from a prospecting and new business development standpoint, the ability to simply crush dials and look at the job as a 100% sales role-
Kurt Dupuis:
Sales job, yeah.
Dan Sullivan:
One of the guests, he shared that some of the advisers that as part of his new group, I think he went to a bank, if I remember correctly, they didn't have the habit of just being able to wake up and say, I'm making 80 phone calls today, or I'm making 100 phone calls today. He was surprised though that net new assets or wholesalers helping advisers raise new assets, he was assuming that that would be the only focus. And he realized as he became an adviser that no, there's a lot of time that's committed to client onboarding, to client service, to running operational functions that he as a wholesaler assumed that net new assets would be so much more, but as he got on the other side, he was realizing that there's things like lending that he's focusing on, other products, other services that are not just the investment management side of things. So his perspective there was pretty interesting.
Kurt Dupuis:
What's the saying, when you hammer, everything's a nail? When you come from a sales background, your job is mainly just sales. That makes sense that he would view the new role as only sales, not as much customer service and operational. Operationally, wholesalers don't deal with that much. As a financial professional, I'm sure there's meaningfully more operational stuff that you have to deal with.
Steve Seid:
That world to me, from not being an adviser, looks like it's getting ever more complex. To your point about the operations and doing things besides net new assets, it just seems like there's a lot going on there. It's like a more complex job than it was 10, 20 years ago at least. Do you agree? I mean, disagree if you don't think so, but that's the way I see it.
Kurt Dupuis:
And then the bigger the firm that you're at, the more other external factors and goals and campaigns you're hit with…
Steve Seid:
Yeah.
Kurt Dupuis:
…so on top of running your own business, for sure.
Dan Sullivan:
I feel like that almost might be a perfect transition into the independent versus wire breakdown just because I feel like the additional support and time committed largely has to do with what your broker dealer does provide or doesn't provide, and that varies pretty significantly. And are we viewing this from the salesperson's perspective or from the adviser's perspective?
Steve Seid:
So here's how I tackled this 'cause I did a bunch of research, I talked to a lot of advisers over the past couple.... When I say a lot, probably the survey here is about 15, 20 people. And I didn't want to just go up to people that were in a wirehouse and say, hey, why are you in a wirehouse, and what do you think about independents? I wanted to get to people who had the decision to do one or the other, and I didn't want them to be new. So where did that lead me? It led to people that have actually left their firm, were in a firm and then had a decision to make, am I going to go wire house or go independent? Because nowadays, right or wrong, recruiting is the name of the game for all these managers and branch managers and COIs. Their job is to recruit. So if you're an adviser, you're getting these calls all the time about, hey, come to my firm.
And so what I wanted to know from these people is, which firm did you go to and why? What did you see as the pros or the cons? Does that make sense?
Kurt Dupuis:
Yeah.
Steve Seid:
Okay. Let me start with a couple of caveats right here. I know this could be a sensitive topic to people that are in the position of recruiting. First off, I'm not suggesting that anyone should move firms, that's something that anyone listening should do, right? If you want to do that, great. This was a small sample size. I'm in San Francisco, just north of San Francisco, so understand that the types of advisers that I work with in here tend to be sort of big city oriented, which is probably different than some other areas. And so anyways, I'm going to share their perspectives. If you disagree, shoot me a note. I'm sure we won't get everything perfect, okay?
So the first thing that I want to say upfront is sometimes you get the narrative in the industry like, oh, 10 years in the future, the industry is going to all look like this. It's going to be a 100% RIA, for example. That's just one example.
Kurt Dupuis:
I love those spicy takes.
Dan Sullivan:
We should all be robo-advisers by this point if that logic…
Kurt Dupuis:
Yeah.
Dan Sullivan:
…stays true.
Steve Seid:
In no way, shape, or form did I get that from the discussions that I had that it was like there was a dominant place to go. Quite the contrary, I actually found it was split pretty evenly from independents and wirehouses and things like that. And so when I say indies, I'm kind of lumping in regionals with that. So just think wirehouses versus everybody else. All right, disclosure is over. So let's get into independents and what drove people to go towards independents. The people that went there, they wanted to truly own something and they wanted freedom. They really wanted to be an owner versus an employee because at its very basic nature, when you work at a large wirehouse, you're an employee. I mean, you still own, but it's not the same as owning your own business as in an independent shop. That's just by definition the case. There's a lot of pros and cons that come with that, but that was a big driver.
Some of that is the flexibility to work when you want, where you want, how you want. They're much more of an entrepreneurial mindset, but not just as a business owner but what they wanted from their firm. So if you're at a wirehouse, you want their ideas, their suggestions, their practice management, all these things, you want those resources. Independents, it's not to say they don't want suggestions or whatever, but they're not really interested in what a firm has to say. You know what I mean?
Kurt Dupuis:
The other side of that is how many times have you talked to folks at bigger shops that were still fighting for resources?
Steve Seid:
Yes.
Kurt Dupuis:
You know, or they thought they were going to get a CSA or something and it's been six months and they're split between three different people. So that could be a double-edged sword. That's kind of included in payout, but also you have less say in that, how and when that gets executed.
Steve Seid:
Yeah, I agree with you. This stuff I'm making these comments about, it's generally this, but of course, when you get under the hood, it's not always so black and white, but certainly that was part of it. I mean, you'll hear payout as well. That's an another thing. I mean, you go independent, you're generally looking to get a higher payout, higher compensation. And the last thing that I would say, there's a few more, but I'll keep it relatively simple, is selling implications. I think that wirehouses are doing a good job to find the next adviser for you and sell your book. But when you actually go into a true independent space and be able to sell your book on the open market, that's a different type of thing.
Kurt Dupuis:
And they make it easy, right?
Steve Seid:
Yeah.
Kurt Dupuis:
So it's like the level of entrepreneurialship and the level of risk and potentially reward you're willing to accept. That's kind of the breakdown. The wires are fantastic. It's all plug and play, ready to go, but there's caveats to that. The cons are less control, probably smaller figure when you're looking to sell, challenges like that, hiring and firing, you have less say. That's what you give up.
Dan Sullivan:
I would be interested in discussing if the big payouts that were associated with a lot of groups going independent in the last years, how sustainable that is
Steve Seid:
Yeah.
Dan Sullivan:
And if people who make the jump then kind of realize, well, I don't know if was the grass greener or is the grass greener? So definitely can banter on that as this conversation moves forward.
Steve Seid:
Yeah, and it is really interesting you say that because it was a “This or That?” between indies and wires, and I actually came up with a whole other one based on this conversation, which is to move or not move. And I don't know if we want to go there, but I asked these people to reflect back on their decisions and they're going to tell you at indie or wire. They're also going to tell you about what the move was like. So maybe we save that for an end if there's time. I know we got a lot of material to get through, but wires... These are in no particular order, I'm just reading bullets. Brand. So that's a big one. These institutions have brand and it still matters to a lot of people.
Kurt Dupuis:
It's not a zero for sure.
Steve Seid:
This came up and I guess I didn't think I was going to hear this, but reflecting back on it, I'm like, well, duh, why wouldn't this be part of the equation? People who went to wires wanted to be in rock solid large institutions. They've been through periods where the financial system was teetering and they didn't feel necessarily comfortable going to something that wasn't a large institution. Look, we just dealt with this with the small regional banks. You're an adviser working at one of these smaller institutions and all you're doing is reading about your firm every single day, we're going to exist or not to exist. That's kind of a big deal.
Dan Sullivan:
At a minimum, it's going to be a huge headache for people reaching out to you, and at worst, you're going to find yourself at square one again if there's a serious crisis. So I think that that brand stability, it's so easy to just say, oh, you don't need the brand anymore. But then probably the further you are away from working at that brand, you might realize, man, there's a reason that it was so successful.
Kurt Dupuis:
So we have portfolio managers that talk about brands and actually put numbers to what brands are worth. Can we have that done at the financial professional level? What do you actually receive in benefit from the brand that's on the door? Because I honestly don't know. Is it 2%? Is it 25%? I have no idea.
Dan Sullivan:
I feel like that would also be a spicy question to lay out to the adviser community because if you ask the question, what percentage of your new clients in the last 10 years do you think had a significant impact because of your brand? That one is very interesting 'cause-
Steve Seid:
Yeah, that is good.
Dan Sullivan:
Who is more important, the adviser or the brand?
Kurt Dupuis:
Well, yeah, you'd get a wide array of answers. We know the adviser is the most important. Hands down, that's the most important. It's hard to over exaggerate the amount of effort that goes into changing firms.
Steve Seid:
Oh yeah.
Kurt Dupuis:
Those first six months are brutal, I've heard time and time again. So whatever 10-year number you're looking like... Because there are also growth numbers. It's not like you just take business A, plug it into business B and you're good to go. There's hurdles to hit along the way. You hear people working like they've never worked before just to transition firms. So that's a sticking point for a lot of people that it's a non-starter because I don't even want to go through that.
Steve Seid:
I've got a lot to comment on what you just said. Maybe we'll get to it on this episode, maybe we won't, but what you said is exactly 100% correct. So I'll just run through three more bullets I have just on the wires and then we can move on to another subject. So actually four more bullet points. It seemed to me that the people that went to the wires, they described as going after a specific clientele and in this case, sophisticated ultra-high net worth. Think about the people in San Francisco that are going after the executives, they're going after the tech CEOs. They're like, I'm not going after the "average Joe." I have an upscale market. These platforms are going to provide more for that market, therefore I wouldn't consider going to a different platform.
Kurt Dupuis:
And I think that's a legitimate argument. I mean, in the Alt2 space, I don't think every firm is created equally.
Steve Seid:
No.
Kurt Dupuis:
So if you do a lot of Alts, it makes sense that you'd gravitate towards a certain firm and you might want to be like a “boutiquey” RIA. That makes sense to me.
Steve Seid:
Yeah, and on the subject of things that I think the wirehouses do pretty well or at least was the perception, is that they seem to have overall better tech. It almost goes without saying that in any firm you go to now or the pitch for a firm, what they're going to say is, well, we've invested a ton of money in technology, they're all going to say it. And this particular person who I spoke to that the conversation stuck out to me on this subject, she was like, it was interesting to me how all the pitches or the overview of the technology when I was going through it with them looked almost identical. So firm A and firm B, that tech demo looked almost the same, but once she got under the hood, she's like, "The one thing I can recommend for people that are leaving is go under the hood and really ask specific things about the technology." To her, it was clear that some of the wirehouses had an advantage on that front. So I'm sure there's people out there that would disagree, but that was the perception.
Kurt Dupuis:
Figuring out the tech stack is a meaningful effort. So just Google Kitces tech stack. It shows you all the CRMs, all of the AI tools, all the financial planning tools. There's literally hundreds of them.
Dan Sullivan:
Tax management software, anything, onboarding.
Kurt Dupuis:
Tax management.
Dan Sullivan:
Yeah, you name it.
Kurt Dupuis:
And then how they all talk to each other. I mean, yeah, if you're building that from scratch, again, if you're entrepreneurial, you like that, cool. There's a whole swath of people that don't want to mess with that. And yes, the wires particularly spend a lot of money on technology. It's not all ever perfect, but it is plug and play.
Steve Seid:
Okay. I'll run through the last two quickly. Just so we talk about with entrepreneurship on the independent side, these people were not interested in picking office spaces, leases, personnel decisions, those kinds of things. I know there are resources on the independent side that could help, but that was one thing that was clear. I don't want to do that. And the last thing I thought it was interesting... This only came up once, but I thought this was worth mentioning. This person actually said, "I actually like the big brother element. I want somebody preventing me from doing something dumb." And I thought was worth mentioning.
Dan Sullivan:
That's a very, very good perspective because one thing that I've learned now that I'm at a startup versus a big firm is that the environment can dictate how successful someone might be. In an unstructured environment, you need to really have structure. And for someone who is like, yeah, just be there looking over my shoulder, prevent me from being an idiot on my own, I love to hear that because it just means that that system works for that person.
Steve Seid:
Absolutely. Okay, what's the next “This or That?”
Dan Sullivan:
I think we got to talk about you, Steve, and management versus external. It's that time.
Steve Seid:
I want to hear you though first. So you were on our side of the world.
Dan Sullivan:
I was on the wholesaling side for just shy of seven years. The last two of those, I was an external. And about two years into that, I made a career pivot to working at a Series A financial technology company. It was probably the only job that I looked at where if I saw who I was selling to and what I was selling, it would've been a pretty significant overlap of skills and experiences as opposed to abandoning all the work that I did, all the things that I learned in those six years as a wholesaler. But wow, is it a different world and a different structure and it's definitely been fun. But as far as the “This or That” theme goes, after two years of doing the FinTech job there's a lot of reflections on what was gained, what were opportunity costs, and I think that will be interesting to cover here in this discussion.
Steve Seid:
Why did you decide to leave in the first place?
Dan Sullivan:
I mentioned this earlier, the impact of COVID I think had a large influence on that. I started that external role on February 21st 2020, and my very first…
Kurt Dupuis:
Ouch.
Dan Sullivan:
…full week of calendar. Yeah. So as a wholesaler, your golden goose is to have a full calendar, right? You want just Monday through Friday, meetings with clients and prospects. That first calendar that was completely full and booked that I was the most pumped for was March 9th, 2020.
Steve Seid:
That's so brutal.
Dan Sullivan:
Which in the northeast, that was when New York City and everything else officially closed down. So I was mostly working out of my apartment as an external. We did let go of our internals and that experience, it was two years of being pandemic. No one in office. I could barely see clients. That I think absolutely had an impact on it.
Steve Seid:
Yeah, of course.
Dan Sullivan:
But at its core, while we spent so much time working remotely I started to just realize that I was more interested in potentially having more impact on a growing team and a business that was still developing and that's what led me more towards that earlier stage startup. And I was very fortunate that I found that role and it was the right fit and that it has worked out. I know peers of mine that similarly left external that it didn't work out when they went to join a growing company. So I have been very, very fortunate, but a lot of it had to do I think with just matching like being involved with more. The sales that I'm making are having a pretty significant impact to our company's ARR which is effectively our growth metrics, and so I found that to be a nice change of pace.
Kurt Dupuis:
And so COVID and really being able to connect more with a mission, not just a job, those were two big aspects for you?
Dan Sullivan:
Yeah, it's interesting with a mission because it's not like we're a nonprofit where we wake up every day and it's like this is what fuels me, but maybe I can describe some of the things that I'm doing today that I don't believe I would've had as an opportunity as an external role, at least in the capacity that I did at my prior role. And that is leading and training a group of individuals that are starting their career as SDRs3, which in our world, would be the equivalent of an internal. So I get to be more of a player coach right now, which is fantastic. And the new clients that we're bringing on, a lot of them are completely new to this kind of technology, and it's a lot of the groups that I had worked with in the past, which is a really unique lens. So getting them to understand how the software can be used, training them on it. A lot of the coaching aspects and working with people element, I really get to be involved with and I'm seeing the direct result of that effort, whereas sometimes as a wholesaler I would always just be a third party to a decision that was ultimately being made by somebody else.
Kurt Dupuis:
And it makes a ton of sense.
Dan Sullivan:
This past year was a big stress test for a number of groups, and I almost feel like there was this allure and maybe a false sense of grandeur with going onto a tech company because of what happened in the last 15 years with low rates and all these crazy high exits.
Steve Seid:
Yeah.
Dan Sullivan:
It was like, if I can make a parallel, it could be like joining as a wholesaler 25 years ago at a company that was just booming and everybody made a ton of money early in their career.
Kurt Dupuis:
Steak dinners and slicks baby.
Dan Sullivan:
Exactly. All of these big now publicly traded FinTech companies were kind of like that. So if there was any caution I would throw to the wind is realizing that it's a much longer time horizon than people think and your equity options might not amount to anything. So that's a huge risk that you don't deal with when you're at a stable well-respected firm that's been around for multiple, multiple years.
Kurt Dupuis:
Well, let's move over to Mr. Seid and talk about staying at asset management, but deciding to move from an individual contributor to being a suit.
Steve Seid:
I feel like this is so built up now. I didn't realize anyone actually wanted to hear about this. I think if you talk to managers in organizations like Divisionals that were wholesalers prior, I think they will all say the same thing, that there are things that are great about both jobs. So I think the first thing that I would say for people that are thinking this through is how much do you really like being a wholesaler? And I say that because even successful wholesalers, even ones that are consistently top at the firm, you've met some that just really don't seem to like their day to day, right?
Dan Sullivan:
Oh, yeah.
Kurt Dupuis:
And some that absolutely love it. They can't imagine anything else.
Steve Seid:
Right. And that is so clear. Dan, you saw that in your firm as well?
Dan Sullivan:
I'd offer a parallel, great athletes. Not all great athletes, the best in their sport when they're done and they've retired they're like, I don't love it.
Steve Seid:
You got it.
Dan Sullivan:
I'm never picking up my cleats or my gloves. Insert your equipment there. They did it. It served them well. They were talented-
Kurt Dupuis:
Means to an end.
Dan Sullivan:
But it's a means to an end. It's not like - they don't love it. Yeah.
Steve Seid:
That's a great analogy because if you're someone that does the job, you're doing well, but you don't really love it, then considering management becomes a whole lot easier. Relatively easy decision. I loved being a wholesaler. Loved it. Not everything's perfect, no job is, but I think that's the one thing that complicated it for me a little bit was how much I actually liked that job. So that's the first thing I'd say. So let me get into, if I can, I think the pros and cons of a wholesaler, and obviously you guys can both contribute to this part of the equation as well.
Kurt Dupuis:
I got you.
Steve Seid:
From a pro, now I'll say if you're at a good firm with a good boss and a good territory, this is mostly true what I'm about to say. It's pure freedom. When I was a wholesaler and I was running the Bay Area, I got calls from my boss, of course, the usual, but it was just like, how can I help you? Outside of that, no one really messed with me too much. I am sure, Kurt, you probably feel the same way at our firm, right?
Kurt Dupuis:
Keep your numbers good and people lay off of you. As a general rule, that's definitely the case here.
Steve Seid:
Yes. It may not be the case at other firms, Dan, I'd welcome your perspective on that, but for us it's like, yeah.
Dan Sullivan:
If I can give a shout, Greg Murphy who hired me at my external role, unbelievable individual, appreciate everything he did for my career. He was a very hands-off manager and that was the first I ever had in my entire career. So I was almost spooked because of how little I needed to make updates, and even sometimes I'd put time on the calendar to chat and he's like, "I feel like we're good. Did we need to have an update?" I'm like, this is just past programming, but no, yeah, I completely agree. Completely agree.
Kurt Dupuis:
But some don't do well with that. I mean, some people like a lot of feedback. They really want to chew the cud on how you're doing things and I mean you described it as pure freedom, but some people don't work well with that.
Steve Seid:
The pro is that freedom and the firm can suggest all kinds of things, but it's really like your call to make. It's your business, make no mistakes about it. It may be Touchstone and Steve Seid covering Touchstone in the Bay Area, but it's Steve Seid's business. That franchise is with you. So there's that ownership element and that freedom element that I think is really, really amazing about wholesaling.
Kurt Dupuis:
My previous shop when I was moving to external, I remember traveling with a guy in Florida who had been down there two decades, knew everybody, and it just seemed like the greatest job in the world. And the story that really crystallized it for me, he had grown up in that territory down there and was legitimately friends with a lot of the advisers in his dirt. He would vacation with them, go skiing together. So it's like, oh wait, okay, so you have the autonomy, you're making good money, you actually like these people and are spending your own time with them. What else could you ask for?
Steve Seid:
100% agree.
Dan Sullivan:
If I were to do a regret column or a what if column, it would be exactly that. Look at it as the equivalent of being a rookie wholesaler, it was still my first two years as an external. There were so many people that I met that were awesome, and I have in the back of my mind, well, what if I did that for five, 10, 15 years? What was the opportunity cost of all those awesome people that I don't interact with day to day now?
Steve Seid:
Listen, I don't want to make you feel regret, but that is real what you experience. The first few years of wholesaling is unequivocally the hardest and that is a real thing and you had to do it during the worst time. I can't imagine how difficult that was, but you're right, the longer that you do it becomes a very, very different type of job. So anyways, in terms of cons, of course there are cons. There's pressure to sell. There is a grinding it out mentality of getting up out the door. You better make sure your calendar's full. I'm not somebody who randomly knocked on doors when I was doing a walkthrough. That's not me, but you still got to figure out interesting ways to meet people and connect with new people and all that stuff. There can be challenging priorities with management. There could be territory cuts. There could be unreasonable goals.
I've even heard the story, which I found fascinating, and again, I hope I don't offend anybody, but I was talking to a friend of mine who went to a different firm and they were like, we have this algorithm. We've built this algorithm, I laugh just saying it, that tells us exactly the people in your territory that you should be speaking with and you could only speak to those people. I laugh because you can't do that. Sometimes management thinks that they can solve for what wholesaling is and you can't.
Kurt Dupuis:
I would get burnt out of that because you're right, there's plenty of science to wholesaling, but there's a ton of art as well. So being told... And I know those firms, you've all heard of those firms, they tell you literally you wake up in the morning, they tell you where to go, who to see, what time to see em’. No, thanks. That's the opposite of that freedom that we discussed.
Dan Sullivan:
I do want to make a nod to just all corporate initiatives out there, whether you're an adviser or a wholesaler, just when you get to the all sales meeting or whatever and it's presented of here's what you're going to do and then here's what the impact is, then you have an audience of externals or advisers just rolling their eyes wondering whether or not it's going to be effective. Everyone's experienced that and I hope we've all had some good examples where the tools have surprised us and what they can deliver. But also I hope that everybody has had that one where it's just a complete flop and just wasn't going to work just based on what the reality of the job is.
Kurt Dupuis:
Shout out to firm initiatives.
Steve Seid:
And the other thing I could say is just support staff for your role as an external can be a little bit of a challenge. If you have a good internal, they don't tend to last. You can have changing and that becomes a problem because it's like who do you actually allow to speak with your advisers because are they going to be there? And so all these things I think are challenges.
Kurt Dupuis:
It's a big challenge.
Steve Seid:
All right, you guys ready for pros and cons with management because I think that's what everyone's most interested in?
Kurt Dupuis:
All right, let's go.
Steve Seid:
All right. So the pro is if you really do like leadership, you get going from taking a wholesaler and making them better because you have some vision of how they can do things a little bit better. If that's the thing that drives you, then management is a very, very cool thing to do. It's like, so if you're a former wholesaler you go in there and you could say, okay, I did these things. I learned these things. Now I can take these things and help people avoid some of the mistakes that I had or do things just a little bit better. So for me, a lot of that is the practice consulting work, the practice management work that I did. So if I could take that and then make our folks better at being able to do that, that is something that generally gets me going.
Dan Sullivan:
It probably is an awesome thing for you in your role now if you were to work with an internal help with some coaching and planning and then see them through to their external role, that'd be a very satisfying career experience or career nod for that year for you.
Steve Seid:
Yeah, the internals is an interesting perspective because they're newer in the industry by definition. And then we just say, okay, now you have an external job. Go get it. Work with somebody who's been in the industry for 30 years and sell to them. And it's just like there are talented, wonderful people that can do it, but it's a big leap.
Dan Sullivan:
It's a tough job.
Steve Seid:
It's not an easy thing to do, especially because what we talked about where wholesalers don't always stay in the same roles forever. So you're the 80 millionth wholesaler that they've seen over their careers. So anyways, you get the point. And so to be able to help someone through that Dan, I agree with you.
Kurt Dupuis:
I still meet people in territory that knew wholesalers from 15, 20 years ago at Touchstone. It's hilarious.
Steve Seid:
I know they'll be like-
Kurt Dupuis:
They could not tell you who I am, but they know someone from 15 years ago.
Steve Seid:
The second thing I'd say pro is you really are still driving revenue. I think that there's multiple kinds of managers and multiple ways that you can approach this job as a Divisional. As a Divisional you could really take a step back and just say, hey, I'm going to manage wholesalers, so what does that mean? Well, I'm going to do the human resources stuff and I'm going to run the calls and I'm going to run my sales meetings and do that. Or you could say, listen, I'm going to be really involved in the nitty gritty. I'm going to help pave the way for wholesalers. I'm going to be talking to COIs. I'm going to be in certain meetings where I could add value to those FAs. There's nothing right or wrong with either approach, but for me I think you could probably guess which side I am. I want to be close to set and closer... Think about of a continuum. Closer to the home office meeting or closest to sales, if that's the continuum, I want to be closer to sales. That's just my perspective, but that's a choice you have to make.
Kurt Dupuis:
The word you always talked about was strategy. What's the strategy? I want to build strategy. I want to be able to think strategically. And I think that's probably a big reason you were drawn to it is having a seat at that table.
Steve Seid:
Yeah, and that's the other thing, okay, I talk about the revenue side, but it's exactly what you just said. Well, you can shape things at the firm level and have a voice, and I found myself a lot wanting to give voice in particular areas as a wholesaler. And they would listen, but I mean, to really sit in the rooms where decisions are being made and being able to influence those decisions to some degree. Listen, I'm not the CEO. I'm not the Head of Distribution. There's a lot of players that make these decisions, but it's nice to be able to have a voice, but that requires that you want the voice, you have a vision, you have opinions on what that should look like. I happen to be, Kurt will giggle when I say this, I happen to be an opinionated person. So it's hard for me not to just be like, okay, this is how things run. Okay, fair enough.
Kurt Dupuis:
Take the boy out of Jersey.
Dan Sullivan:
There is more value in that filling in the gaps between what's happening in the home office and what the externals are out there experiencing. I mean, it can be a little bit of an island and lack of-
Kurt Dupuis:
Or filtering in some cases.
Dan Sullivan:
Yeah, and filtering in some cases. So that was probably lost on me as an internal, but then as an external you realize that to have somebody who does care about that like Steve is describing, to be able to help connect the dots on what are these strategic initiatives? Why are these things that you're hearing impacting you? And then together, let's go make this a good way to incorporate these out in the field. I think that is really, really helpful. I mean, that's incredibly valuable. When I was an internal, our team was mostly in San Francisco and I remember on day one, my external, who awesome guy we're still friends today, he was like, I really appreciate knowing what's going on at the office, at the home office. So every other Friday I would just send him a blurb that was from the home office and it was snippets of conversations I had or topics we covered in our all sales meetings that maybe he wouldn't have seen. And he randomly enough always... He'll still mention that, he was like, that was just all I needed to feel connected to the team.
Steve Seid:
Yeah.
Kurt Dupuis:
Yeah.
Steve Seid:
That's huge. But just the comment on being able to shape things, it's also being able to bring things to the table and changing it at the firm level. And I put my bullet on this, the podcast, well, I started a podcast as a wholesaler, so it's not just as a Divisional, but now as a Divisional, what I'm able to do is to take some of the things that we've done with the show and make them available at the firm. So now to give you two examples, we have guests that have been on the show that are now going to be consultants with us and working with us. We have things like Kolbe analysis, we brought that in. So anyways, there's things like that. So let me get to the cons. An easy con is just a lot more travel. I mean, you think you travel a lot as a wholesaler, try traveling with all of your people, going to your home office meetings, speaking at conferences. All of a sudden, I'm on airplanes a lot more these days.
Dan Sullivan:
We could laugh at that. It's a con, it's not a con, right? I hope anyone that's in these roles, travel is exhausting, you get bits of energy from it, but objectively when you look at a schedule that has so many travel gaps, it can be like, oh boy, this will be a grind.
Steve Seid:
Oh, no.
Dan Sullivan:
Because I mean, you don't love it, but it's a grind.
Steve Seid:
There's 100% of balance there. I don't want to be home 100% of the time. My wife certainly doesn't want me home 100% of the time, right?
Kurt Dupuis:
We can all agree with that.
Steve Seid:
But my giggling was this next one, and I just wrote, some home office meetings drive me crazy. This is another one that I think is real, and I think this is something again, the further you get away from the sales, this happens. The politics, this is my territory stuff. We're lucky at Touchstone that we're not like some other firms, but I guess what I would say is as a salesperson, so this is wholesalers are considering going to management, you're going to have very low sensitivity for that because the truth is when you're a wholesaler, there's nowhere to hide. Your sales are your sales, your territory, your territory, right or wrong it's yours. And so when you get into management, those kinds of things I think have the potential, at least to me, to be a little bit, I think rub you the wrong way.
Kurt Dupuis:
I think you and I are very similar in how we think about that role. So I can only imagine how I would do in some of those circumstances, which is I'm not good wasting time.
Dan Sullivan:
I thought I avoided some of that by going to a startup, a small group. I think I was the 29th employee, now we have like 65, and for a while we avoided those exact meetings. But now that we have a larger team, I'm like, oh no, I have become what I said I would never become.
Kurt Dupuis:
So you're a suit now, Dan?
Steve Seid:
Look at him.
Kurt Dupuis:
Dan's a suit too?
Dan Sullivan:
Hey, hard to say suit because now I'm at a FinTech company, the attire is much different.
Kurt Dupuis:
I know.
Steve Seid:
So you’re in a hoodie?
Dan Sullivan:
Yeah. Hoodie like in the show on HBO, what's that one? Silicon Valley, right?
Kurt Dupuis:
Yeah.
Dan Sullivan:
But no, I have those standing meetings and I'm like, oh no, even I hate myself for having to facilitate this right now.
Steve Seid:
Yeah, one way you could look at a decision to go to Divisional is Divisional is higher than a wholesaler. It's a period where the wholesalers report up to the divisional. I think that's the wrong way to look at it. And I actually think as a firm, the wrong way to look at it is anything of that your salespeople, your wholesalers, the people that have the relationships that are in the field that are driving the revenue are the top of the pyramid, period. And that's not to say we don't have to manage them, not to say that we can't give em’ initiatives that make them better. Of course that's our job, but if you start to look at them lower than you or hey, that mentality-
Kurt Dupuis:
Nobody wants that.
Steve Seid:
Yeah, I just think for me, that's the wrong way to look at it. And so anybody considering this job, that would be my suggestion is to look at it that way.
Kurt Dupuis:
I used to work for a guy that said, there's two jobs at this company. It's those that run the money and those that sell the running of the money. Those are the two jobs. Everything else is insularly.
Steve Seid:
So anyways, those are a few. I could go on these for a while, so if you guys have any other questions let me know, but yeah, those are the pros and cons. The Divisional though, it really is a wonderful role. It's a way you can be close to driving sales to revenue, but also have the impact on the firm level and things like that. So I think it is a great role, but I think wholesaling is a great role too. So my conclusion is there's no wrong decision. To me, it's like, are you at the right firm? Do you have a good product to sell? Is there a good culture? Once you get those things taken care of, whether you're a wholesaler or Divisional, I think there's not a bad choice is what I would say.
Dan Sullivan:
Yeah, all ebbs and flows of individual's careers, which is why we thought this would be a fun discussion.
Steve Seid;
Yeah.
Dan Sullivan:
Because most of our audience has probably had some of these belaboring pros and cons conversations about each of these situations, right?
Steve Seid:
Yeah.
Dan Sullivan:
And we're so fortunate to be in this career path and in this industry where not only do you have those opportunities, but by making one of them it's not like you're permanently going to be at a different status or something like that. Even with my job hop, more of a lateral compensation switch. I do have a FOMO, if you will, of that massive career year that externals have, but I still have my seven licenses.
Steve Seid:
Yeah.
Dan Sullivan:
I'm able to have that updated through FINRA, and I get to interact with so many awesome people through the podcast that I don't feel like I'm fully detached from it.
Steve Seid:
No.
Dan Sullivan:
And that's a wonderful blessing of this industry. So even if we vent and I say fill up the hate tank about certain roles and stuff every now and then, this is part of our lives and our community, and it's totally okay that we were able to. Hopefully it's fun that we documented some of that today.
Steve Seid:
Yeah.
Kurt Dupuis:
That's what I love the most about it, is a generation before this couldn't have existed because of technology, because of culture, because everyone was so siloed. I mean, who knows at any point in their educational career, they want to get into wholesaling? No, no one. Zero.
Dan Sullivan:
No one.
Kurt Dupuis:
Nobody. If you're saying that, you're lying. But we've all found it one way or the other. And so to be able to kind of shine a light on the different paths to different decisions, the pros and cons and different ways to think about it, I think is great because the industry needs more illumination.
Steve Seid:
Dan, I got to tell you, and I know Kurt feels the same way, we are huge, huge fans of your show. Love listening to it. Love what you do. This is our second cross promotional episode, and we were excited to do it because your show's great and so are you so thanks for doing it with us.
Dan Sullivan:
Thank you so much. Anyone that's listening can find us on Instagram @internaluseonlypodcast, and the feeling is mutual. I love your show. I love the episodes. It keeps me sharp, and I look forward to a future where maybe we're collaborating on some kind of in-person event that will serve the needs of our mutual audiences.
Steve Seid:
I love it. The Whole Truth meets Internal Use Only.
Kurt Dupuis:
Love it.
Steve Seid:
Anyways, thanks everyone for listening. We'll see you.
Kurt Dupuis:
You can find The Whole Truth and subscribe for free on Apple Podcasts, Spotify, or your favorite podcast app. We'd love it if you took the time to rate and review the show on Apple Podcasts, it helps others find the show. And for more episodes of The Whole Truth, go to www.touchstoneinvestments.com/thewholetruth. That's touchstoneinvestments.com/thewholetruth, all one word.
1 RIA is an acronym for Registered Investment Advisor
2 Alt is short for Alternatives also known as Alternative Mutual Funds, which hold non-traditional investments or use complex investment and trading strategies.
3 SDRs is an acronym for Sales Desk Representatives
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