How four visionaries built their super branches from the ground up.
By offering enhanced local support and personalized service, super branches have become an increasingly popular option for advisors looking to keep their independence, grow their business and work with people who know them by name.
As a result, it’s never been a better time to be an OSJ or branch manager with a goal to build a firm that might one day achieve super-branch status.
There isn’t a hard-and-fast industry definition of a super branch, but, in general, an OSJ or branch office that supports 10 or more advisors who produce at least $3 million in combined GDC and operate in multiple geographic locations would fit into this category.
The following are the stories of four visionaries who took their firms to that lofty level. Their paths and methods may have differed, but each will tell you building a super branch takes a goal, a plan, persistence and the right mix of people.
A Goal to Build a Texas-Sized Super Branch
In 2002, Clyde Wyatt had a vision of what his firm could be. He recognized the potential to grow and eventually become a highly productive super branch. With that objective in mind, he and three other directors of Navigation Financial Group in Dallas, Texas, left their insurance-based
broker-dealer and joined Securities America.
“We came here with the idea to grow the firm,” said Wyatt, who serves as the firm’s managing director. “Soon after we had six advisors follow us. We had a dream to get to $10 million in GDC. So we hired a full-time compliance person and began our trek.”
In 2006, Wyatt took on the role of OSJ. The foundation for his vision was in place, but the growth they’d counted on wasn’t happening. The Navigation team modified its plans and adjusted its recruiting strategies, but it appeared the bar may have been set too high.
“We went through a six-year period from 2006 to 2012 where we tried everything,” Wyatt said. “We worked with Securities America. We brought in a third-party recruiter. We even hired an inside recruiter. We had some modest growth, but we were just treading water at that point. So we decided maybe this was just who we are; maybe we weren’t going to get any bigger.”
Despite the setbacks, Wyatt and his team persisted, and recruiting strategies that originally hadn’t produced results gained traction. By 2013, business had grown by about
“We kept pushing against the wall, and eventually the wall started moving,” Wyatt said.
Initially, the firm targeted advisors in the $200,000 to $400,000 GDC level, but its value proposition seemed to appeal to only higher producing advisors. Wyatt and the other directors persisted and eventually garnered the attention of advisors who matched their original profile. Today, Navigation Financial supports 32 advisors who finished 2015 with $7.2 million in GDC.
When developing his long-range plan, Wyatt anticipated increasing staff to keep pace with the extra business. As the envisioned growth became a reality, he added a second full-time acting principal, a part-time acting principal and an office manager.
In addition to filling critical support positions, the firm leveraged technology to streamline the workflow, provide advisors a flexible platform to grow their businesses and communicate with Navigation Financial offices spread out across Texas and the southern United States.
Wyatt said the secret for OSJs seeking growth is to believe in yourself and your program and to persevere.
“I would encourage them to keep pushing against that wall,” he said. “We came close to giving up on our growth potential. We knew we had a marketable program and continued to attract advisors. It was just about going up to them and saying, ‘This is who we are.’”
Staying the Course Pays Off
In 2009, when Queen City Financial Advisors of Cincinnati, Ohio, became an independent branch, its registered principal and president, Chuck Hais, knew the firm had potential to expand beyond its 21 advisors. Unfortunately, his growth plans were stymied almost immediately by an unforeseen circumstance. Securities America, Queen City’s new broker-dealer, was in the process of being purchased by Ladenburg Thalmann. Prospective advisors were wary of joining a broker-dealer undergoing a change in ownership, especially during a historic low point in the market.
Rather than take a step backward, Hais said he used that slow recruiting period to “turn a negative into a positive” by carefully evaluating what other broker-dealers were offering and adjusting his goals and growth plans. After the change of ownership was complete, Ladenburg Thalmann’s influence on prospects proved to have a positive effect on recruiting.
“The number kept increasing,” Hais said. “I thought if we could get to 30 advisors, that was a nice number. But once we passed that, I thought we could get to 40.”
Today, Queen City Financial Advisors maintains a dual-relationship model with 40 advisors. Seven work from its Cincinnati office and 33 others operate under their own DBAs in six states. Those practices range in size from a single advisor working from home to the Trendency Group in Columbus, Ohio, that supports 10 advisors. The entire firm has about $750 million in assets under management.
Having always kept direct involvement in the firm’s accounting and budgeting, Hais said he was prepared for the expenses associated with growth. He also maintained a close working relationship with his broker-dealer, continually assessing cost and profitability to ensure they stayed on track with his growth plans.
As more advisors from across the region came on board, improving the lines of communication became a higher priority. Consequently, Hais implemented a range of solutions to keep in touch and increase opportunities for collaboration, including regular on-site visits to advisors’ offices, a quarterly conference call and an annual two-day branch meeting that combines education and entertainment.
“When you have advisors in six states and 25 locations, it’s important to make them feel like they’re part of the group,” Hais said. “We try to pick a place where we can keep the advisors together in the evening. That camaraderie is important; advisors in different offices don’t start to feel like they’re an island.”
For any OSJ or branch manager looking to take their firm to the next level, Hais recommends building strong relationships with recruiters and honing the sales presentation that will be used when pitching the firm to prospective advisors.
“You have to develop some message to recruits, have a good value proposition and have your elevator speech down,” he said.
Determination and Efficiency Fuel Nebraska Firm’s Growth
For Jack Connealy, president of Lincoln, Neb.-based JFC Financial Services, the road to super-branch status didn’t start with a specific vision for the firm he founded in 1992. Instead, he viewed continued growth as a natural by- product of running an efficient business and taking care of the people who work for him.
“It was more just keeping my head down and providing the service advisors expect,” Connealy said. “That’s when good things happen.”
In 2002, when JFC Financial Services joined Securities America, it already supported 30 to 35 advisors. By adhering to his simple plan for making “good things happen,” Connealy has built a super branch that today supports 151 advisors in 18 states from coast to coast. In 2015, JFC Financial Services total GDC was more than $27 million.
While changes in regulations and volatile market conditions over the past decade have reshaped many aspects of the industry, Connealy said the basic challenges of building a large, thriving branch from the ground up are the same today as they were when he started the process.
“The challenges don’t change in principle,” he said. “The details change, but you’re still constantly striving to create a business that will run itself in your absence.”
A self-described “efficiency nut,” Connealy said it’s vital for a rapidly growing firm to stay up to date with the latest technology to streamline compliance and supervisory responsibilities and provide a flexible advisory chassis that allows advisors to grow their business.
“We’ve leveraged technology as best as we could,” Connealy said. “I believe small businesses have to run as efficiently as possible and to be able to identify the things they’re doing that they shouldn’t be.”
Connealy offers simple, straightforward advice for anyone looking to embark on the journey of growing a firm to super-branch status.
“It all starts by planting a tree today and knowing your business,” he said. “In other words, getting one advisor, then two, then five. Keep them happy and over-deliver on your promises to them, then get them to have a long-term commitment and staying power. It’s about delivering on
Market Drop Leads to New Strategy, New Growth
Like many advisors, 2008 marked a turning point for Art Cooper, the managing director of Cooper McManus Wealth Management in Irvine, Calif. Up until that historic downturn in the market, the firm Cooper started in 1998 had grown “organically.” Most of the new advisors who joined him during those early years were recruited by word of mouth and through business connections he’d forged over the years.
But when the market dropped, Cooper knew he had to reevaluate his recruiting strategy. Rather than rely on his own contacts, he organized recruiting campaigns and hired a telemarketer to reach out to prospects.
“We started to bring in five or six a year,” Cooper said. “In our best year, we brought in 12 advisors with $12.5 million in GDC, and it just snowballed from there.”
While recruiting was finally taking off, Cooper realized to retain advisors, he needed to rethink the value he was offering. As a result, he added a quarterly informational meeting and an annual two-day wealth management marketing event in Laguna Beach, Calif., which has also proved to be a valuable recruiting tool.
“We put them in the sand on Laguna Beach,” he said. “We use it as a recruiting venue where advisors can see our culture and meet other advisors affiliated with us.”
Cooper has also designated a member of his team to help nurture leads and assist recruiters through every step of the recruiting and onboarding process. A second staff member is responsible for facilitating the paperwork for each transitioning advisor. This team approach has resulted in a faster and smoother transition for new advisors.
“We’ve raised efficiency and success of transitioning,” Cooper said. “We have more advisors up and running quicker than when we didn’t provide these services.”
Today, Cooper McManus supports 62 advisors in eight states who produced $11 million in combined GDC in 2015. In addition to the recruiting challenges it took to get the firm to that size, Cooper was initially challenged by the amount of time needed to address compliance-related issues. As a result, he hired a full-time and a part-time compliance officer.
With so many advisors spread out geographically, Cooper said it’s common for them to feel like “an island to themselves.” To help with that, acting principals annually travel to each office to provide educational opportunities, answer questions and ensure the office is set up to run efficiently. They also travel to advisors’ offices and remain on site to provide assistance during a compliance audit.
For anyone with a vision to build a super branch, Cooper recommends staying patient, learning from your mistakes and taking a hands-on approach to recruiting.
“You need to take personal responsibility for finding individuals,” he said. “If you just say to your broker-dealer, ‘Hey, have the recruiter send people to me,’ that’s a false expectation.”
Recruiting challenges, compliance and supervision issues, ever-changing technology and a volatile market — the list of obstacles that can slow your progress when building the super branch of your dreams can be daunting. But if you heed the advice of those who have found ways to overcome those obstacles and persevere when faced with setbacks, your vision of a super branch could one day become a successful reality.