[00:00:01] Speaker A: Hello and welcome, everyone. I'm Taylor Pankratz, and this is behind the breakaway. Together with my co host, Jason Barber, this show takes you behind the scenes of leaving your captive broker dealer firm and explores the world of RIa independence.
All opinions expressed on the podcast by the hosts and guests are solely their own opinions and do not reflect the opinion of uptick partners. This podcast is for educational purposes only and is not legal advice and should not be relied upon as a basis for any decisions.
All right, welcome back. This is episode nine of behind the Breakaway podcast.
Got Taylor here, Jason here in the studio.
Finally, somebody else on the ones and twos. So this should sound a little bit better, hopefully, to you guys. So today, what we're going to talk about is when you. When people talk about breaking away and going independent, there's so many. That word has such. It's a very vague word when you say, I'm going independent, because there's so many different flavors or iterations of going independent. And so today, we wanted to just shed some light, educate people that are maybe just starting to peel back the onion on leaving their captive broker dealer firm or wherever they might be in exploring the breakaway movement and the independent space, just get some color on all these different things, because that word gets thrown around a bunch. And so we're trying to, you know, save you from hours on Google, right, and exploring this stuff. And then. And every recruiter out there would love to bend your ear on all the ins and outs of all these things, reach out to somebody like that, if that is maybe easier for you to digest information like that. But. So, Jason, maybe what we should do is start with the high level. When you think breaking away from their current firm, what's the first fork in the road that they encounter?
[00:02:08] Speaker B: So I think that the first fork in the road needs to be, when you talk about breaking away is, am I going to be a w two employee, or am I going to be a 1099 independent contractor, for lack of a better term, right. Or self employed individual? And why would I want one instead of the other? But I think it's simplest if we start there and you just think like a funnel of different, like, first fork. Let's just focus right on w two employee. And why would somebody want that? Why would somebody not want that, et cetera?
[00:02:45] Speaker A: Right? So why would somebody want to leave where they're probably already a w two employee and go to another firm that's they're going to be an employee. Why would somebody do that?
[00:02:57] Speaker B: Maybe they get a big check, would be one for sure. Right. That's a very common in the wirehouse world. For sure. You go from a Merrill lynch to a UBS or I'm just making up names, but you go from one firm to another, whatever, wherever that may be. And you're going to take a really, a very nice paycheck from that other firm for doing that. So that would be one reason.
[00:03:20] Speaker A: Right. To go from into. Because some of these firms have multiple different channels, but to go to their prices. Employee channel, let's say, which they're going to get the.
[00:03:30] Speaker B: You're going to get the biggest check. If you wanted the biggest check and that was all you wanted, then you would go from w two employee at Edward Jones to w two employee at Raymond James Ameriprise, wherever it may be. Right. That's going to get you the biggest check. Why? Because they're going to give you the lowest payout.
[00:03:50] Speaker A: Right? Lowest payout. A little bit more handcuffs. Okay. So pretty much everybody just needs to. And that shouldn't be, at least, this is my opinion that most people know what they are wanting from that. Right. They're either gonna. They should know pretty quickly whether they want to be an employee or whether they don't want that, because that's where they're coming from. So they either know they like that or they don't.
[00:04:18] Speaker B: And I think, before we go too much further, Taylor, I think I should also say that this is just our perspective as people that have broken away. Our perspective. We don't know intimately every single one of these companies pitches and models and what they might do and might not do and all of that. So it's just important to understand, hey, you're, when you're listening to this, you're listening to two practitioners that have actually broken away that are pretty darn familiar with the industry and the landscape of this whole thing. But don't take it as the gospel truth, because we may not. There may be some. Or something might change, right. Or may have changed since the last time we were looking at some things. But I think it's also fair to say that when you do, if you do talk to that recruiter, for one, they're a salesperson. Okay. So they're going to tell you all the good and none of the bad. Okay. And so that you have to go into it with open mind. But anyways, didn't mean to go on a sidetrack there, but I just wanted to get that out there.
[00:05:19] Speaker A: So that's what I want, to get sued.
[00:05:20] Speaker B: Yeah. That's our disclaimer that's us not trying to get sued. Yeah.
[00:05:23] Speaker A: We're not going to say anything on the podcast that's going to, that should make any particular firm feel like we're picking on them.
[00:05:29] Speaker B: Yeah. Yeah.
[00:05:30] Speaker A: The reality is this is, this is, by and large, this is the business model that they picked. And if they didn't like, that's why they have multiple other exact models.
[00:05:38] Speaker B: Exactly.
[00:05:39] Speaker A: Because they know that this is a flavor some people like.
[00:05:41] Speaker B: Yeah. So our objective here is to say, look, we know what we did and why we did it, and we're going to point out those reasons for why we did that, and we're going to talk about the good and the bad of all the different options as we see it. So. So on the w two side, you basically say, hey, you can go from one place to another, but you have to understand if you're going to be a w two employee of any particular firm that what are you, what's the trade off there? I think the trade off is that you're gaining. There's a lot of things that firm is probably going to do for you that you don't have to do. Your tax return is going to be simpler. You're going to just have a w two. It's going to make life a little bit easier. From that standpoint, I think there's a big question mark about whether or not you own your clients in that scenario, if you're a w two employee, I know there are certainly some options that exist that are that way. Lens. Go LpL lens company model, for example. I went to their website the other day and that's how theirs is a w two model. But they go out of their way to make it very clear that you do own your clients. So I think that there are some aspects of that. I think you're giving up a lot of tax efficiency aspects by being a w two employee. You're going to be paying, if you're a large producer, you're going to be paying a ton of Medicare and Social Security, and you're going to be very limited in what you can write off and things like that. I also think there's a lot of questions on control over a variety of things. I think you're going to be giving up, inevitably, you're going to be giving up some control.
So things like who my employees, my staff, my administrative staff. Do they work for me or do they work for the people that my w two employer.
[00:07:21] Speaker A: We know the answer to that. Yeah, we're. You don't have employees, if you're an employee.
[00:07:25] Speaker B: Yeah, exactly right. So that's a problem because, I mean, we can talk about the story of another advisor that we know that had a bad employee, except for it wasn't his employee, it was somebody else's employee. But he had a bad employee. Took him a year and a half to have that person terminated, a year and a half of bad service for his people because he had to document for a year and a half all the things that that person was doing wrong. And that's just, that's insane. But so that doesn't get any better though, right? If you go from, hey, I'm a w two employee here to I'm now a w two employee over here, that doesn't get any better. You still have those same issues. I'm sure it's obvious just by our tone, but we think that going from being a w two employee to break away to be a w two employee is just pointless.
[00:08:18] Speaker A: It makes very little sense to us. Some people, it might make perfect sense and it might be exactly what they want to do. And that's fine. That's the beauty of it. They have that option, and that's a very popular option, that the warehouses, people trade between warehouses all the time.
[00:08:36] Speaker B: Should we talk a little bit about private equity and kind of that movement in the space and the pros and cons of that?
[00:08:44] Speaker A: Sure.
[00:08:44] Speaker B: I think that if you are a student of what's going on in the financial services industry, there is a large amount of private equity money that is flooding in and buying up interest in whether it be Rias or whether it be roll up ras or broker dealers or whatever it may be.
Trying to remember the name of the firm that, the most recent one that I saw, but there's a variety. Certainly most, some folks that are listening to this may be familiar with ampersand partners or, and partners, I don't know what to call them, but they've raised a lot of money. Number one, why? Why is private equity coming into the space, in your estimation? And what's the good and bad of that?
[00:09:31] Speaker A: I think the whole point of why private equity would be doing it is to make a return on an investment. You're going to have a pile of investors looking to get return on their cash. And I think what's really interesting is because you're seeing private equity enter into on the independent side, too, with buying ra roll ups. They're buying them out or taking them public or all these different things. And I think what's particular particularly interesting, though, when the PE firm is on the employee side. When you're joining as an employee of a PE backed company, is this uncertainty or question mark around what happens at the liquidation event, that inevitably these PE companies are wanting to have a liquidation event. And anybody that's been around PE for long enough, they know what PE companies come in and do.
[00:10:24] Speaker B: That's what they do. It's part of the plan. The plan is we are going to invest this money. I'm going to invest $45 million and how fast can I sell it for 100 million?
[00:10:33] Speaker A: And so I think the question that everybody needs to be, or at least we are asking ourselves, is, what's the end game there?
[00:10:40] Speaker B: Yeah. If I'm a w two employee of this organization and this organization sells the company to Merrill lynch, whatever it may be. I don't want to work for Merrill lynch, let's say. How does that work?
[00:10:58] Speaker A: Yeah, it'd be interesting because Merrill lynch, you would think that they'd be buying your employment and your clients, or else what's the value?
What's the value of the deal? What is the, where is the actual value? And why would I buy it for $100 million, let's say, or any multiple of revenue, if you own the clients and can just slip out and go do something else. And now there's no strings attached to that. So it's.
[00:11:27] Speaker B: And then you have to move your book twice, which is what we, which is what the whole theory of.
[00:11:32] Speaker A: Yeah. It's a very interesting, it's. Nobody say the quiet part, and hopefully we skate down the highway a little bit farther before anybody starts asking some of these questions that I don't think anybody really has the answer to because they, they don't have a good answer.
[00:11:47] Speaker B: Yeah.
[00:11:47] Speaker A: So it's. Anyways, on that topic, though, the fork that everybody should be that's thinking about breaking away, you should think if I'm w two or want to be an employee, more power to you that there's homes that exist for you. And probably the best step for them is talk to a recruiter because that recruiter is going to be able to get you a really good.
[00:12:10] Speaker B: Mm hmm.
[00:12:10] Speaker A: Fat check.
[00:12:11] Speaker B: Yeah.
[00:12:12] Speaker A: Now on the 1099, sole proprietor, that whole aspect of things talk a little bit about how the industry shakes out on that side of the ledger going down that fork. Seems to me when we were looking at it, there was the whole spectrum of IBD, independent light all the way to you go and you build your own ra and your names on the Adv. There's all these stops in between there.
[00:12:41] Speaker B: Exactly. I think that's the, so again, you got that first fork in the road. Then you say, okay, I want to be a 1099, so I get more tax advantages, et cetera. Then you can say on that level, on that spectrum, you've got least independent would be independent broker dealer, which some of the main players there are going to be Ameriprise, Raymond James, all of them offer Commonwealth. LPL is a very common type structure. And the main thing, one thing that was in the news, and they've been talking about this for a while is the question mark on are they going to actually allow these folks that are in that independent broker dealer channel remain 1099 employees? Because the Department of Labor is doing their very best to say, actually those people are employees, which is, they are. Right.
[00:13:31] Speaker A: Interesting gray area.
[00:13:32] Speaker B: It is very a gray area. How much different is it really at the end of the day, like, we're still doing your compliance, you're still stuck at one particular custodian, you're using our technology.
You put your name on it essentially. It's a little, it is. I think if you were being honest, it's hard to argue that you're not an employee of that organization.
And you will get in that independent broker dealer channel. You definitely will get a check, right? You get a check. It probably won't be as big of a check as if you went w two, but you'll get a higher payout. And so you'll get a check, but you'll get a little bit higher payout. But now you're in that same problem, like we've talked about, where you're loyal to that one particular custodian or organization, et cetera. Some of the organizations will allow you to move into that or move down the spectrum to be a full RIA at some point. Raymond James does that. I think Commonwealth does that. Pretty sure LPL does that. There's a variety that at least they say, hey, we promise that if you want to go in fully independent, we'll let you do that at some point in time. But certainly on the independent broker dealer side, you're not going to be fee only. You're going to have your series seven. You're still going to have a lot of the same compliance problems, et cetera. The main advantage of doing that, I think, ultimately is just going to boil down to you can get some transition money.
You don't really have to invent anything. It's already been invented for you and you got a big brand name, perhaps that's affiliated with it. And it definitely maybe feels safe. But the big problem, of course, being that, at least in our opinion, it's just not. You're going to go through a lot of hard work for really, not a whole lot more other than, you know, you get a check and you own your book and you get 1099, etcetera. But a lot of the other things that are still frustrations that you deal with, you probably are not going to get away from those.
[00:15:34] Speaker A: Yep. And it's definitely the most popular home for the breakaway advisor. Is that independent, that IBD channel? Simply because it's, like you said, it's the closest to what they're used to with the word independent in it. So it's close to home, but they are, they own their clients.
[00:15:55] Speaker B: I think the biggest for us, speaking of our personal opinion on this, I think the biggest problem that I had with that and why we never seriously, really seriously considered it, is I just had a hard time thinking about when I'm making these calls or when I'm talking to my existing clients, how, what exactly am I going to tell them why I did this? Like, what's in it for them is. The question is, the reality is, I'm not really sure what's in it for them to go from just using our example to go from Edward Jones to Raymond James Ameriprise, et cetera, honestly. But I can think of a lot of reasons why it would be good for the advisor, but I can think of very few reasons legitimately that you would be able to point out, like, hey, this is, is there less conflict of interest? Are there lower fees?
[00:16:51] Speaker A: Are there might have more investment options.
[00:16:54] Speaker B: Maybe more investment options, maybe you have discretion, right? That might be a reason. But a lot of the, there's a lot of things out there that I just felt like, man, it's going to be hard for me to square that concept. The idea that I'm loyal to the client, not loyal to the custodian, et cetera.
[00:17:14] Speaker A: And the other main reason we didn't want to do that was because all of the big ibd people are going ra exactly. Why would we want to move it twice? It sucked the first. We knew it was going to suck the first time. We definitely didn't want to do it again, even if it is easier. But once it's easier, then you're okay. Now I'm having to repaper or not repaper, but at least have them sign something to move into that Ra channel of that same. That same custodian.
But then you're okay. Then I got to have a conversation with them again about whether we want to stay at that custodian. Exactly how many times are you wanting to open up a new account for this person?
[00:17:52] Speaker B: Exactly.
[00:17:53] Speaker A: Just seems so much simpler to. If you see the writing on the wall and if it fits your personality and just how you've. Your orientation of you don't want to be a w two employee, you're really a little bit more of an entrepreneur at heart and want to be a business owner and have a lot of control over your actual business, which happens to be probably the thing that has the most value to you is this business that you've been building. Then it makes sense to not want to have to move it a whole bunch of times.
[00:18:29] Speaker B: Yeah, one time. Move it once. So then if we think about that's on the. In the 1099 world, that's on the far left side of the spectrum, let's say of least amount of independent. Still independent, but least amount of independent, then on the far opposite side of the spectrum, most independent spectrum. We're talking about Ria independence, right? Not just Ria independence, but what is the key term there being how you define independent? Like the pinnacle, the peak of Everest, Mount Everest, top of the mountain. Can't go any higher. Can't go any more independent. That is the way you define that is, do you own. Your own advisor said another way, when you go to sec dot gov or whatever the website is, and you want to go look up a firm, do you type in the name of your firm and does it pop up there? Right. As like, with your address. With your address on it. Okay. Like you are SEC registered investment advisor with the SEC. Okay. That ultimately, at the end of the day, is the pinnacle of independence. Would you agree with that?
[00:19:49] Speaker A: Yeah, 100%. I think the. I think. And that's something that we really had no idea was even. Yeah, I guess we knew what an AdV was to some degree, barely, but.
[00:20:04] Speaker B: Just printed with all the other paperwork.
[00:20:05] Speaker A: But did we really put any type of value in? Oh, this we own that, I think. And so I think one of the biggest things for us, while we were exploring all these different things that we're actually talking about today, each one of these things we were either a part of or we looked at to some extent, and it became very apparent to us that we. We wanted to own our own advance. There wasn't some outfit out there that we wanted to join, that we would join their advice, it wasn't just owning it that we liked. It was if we if there was an option of not owning the AdV, but you have the technology and the infrastructure and all these things in place that made sense to us, that we were used to seeing and experiencing, and that would have been fine.
[00:21:00] Speaker B: Right.
[00:21:00] Speaker A: We've said this before, but the ADV, just because we own it, is like this thing is not really.
[00:21:07] Speaker B: Yeah. It's not critically, it's just one of those. That's how you define it. That's how you know that you're.
[00:21:12] Speaker A: But the reason we chose to own our own ADV is not because we wanted to be at the pinnacle. It's that there wasn't an option.
[00:21:19] Speaker B: Exactly.
[00:21:20] Speaker A: To log into somebody else that we wanted to be a part of.
[00:21:24] Speaker B: Yeah. Because I don't really enjoy doing the compliance work for our firm. Right. It's a lot of work to do that I don't.
[00:21:30] Speaker A: We just went through our first SeC audit. Yeah, that wasn't.
[00:21:33] Speaker B: It was.
[00:21:34] Speaker A: That wasn't. Wouldn't say that. You would say that was fun.
[00:21:36] Speaker B: No. Yeah, exactly. It's definitely not something that's fun. It's very stressful, but you got to be very organized and to get your stuff together. And it's definitely not something that. That. It's one of those. I would do it again. But at the same time, to your point, I think it's. If there would have been an easier option to where we would have been able to get. What's the word that I'm looking for? Like the. The how much return, like, I get so far, where I've got most of the return. Okay. I'm trying to think of what I'm thinking of everybody, but the idea is basically, hey, could I get 95% independent and not have to do my own compliance?
[00:22:13] Speaker A: Right.
[00:22:14] Speaker B: Okay. Then that's what I would ultimately love.
[00:22:17] Speaker A: Diminishing return.
[00:22:18] Speaker B: That's exactly what I'm looking for.
[00:22:19] Speaker A: And there's. What's so great is that there's outfits out there that if you want to own the ADV and that's important to you, there's a whole bunch of, you can either do it yourself or there's some people out there that will help you get from nothing to your an RA with your own ADV and all that. But it just. It's expensive.
[00:22:42] Speaker B: Right, exactly.
[00:22:43] Speaker A: And they're going to want a pretty good chunk of your revenue in perpetuity. And the other things that exist are, like, uptick partners, and there's other. There's a bunch of them out there, and they all have a niche. We know what our niche is everybody. They all have a niche because you're not going to be able to design the technology and the infrastructure and all the things that make yours nice to please everybody. It's just like in the financial advising world, the more you have a niche, the more bigger you typically are, because you can't be all things to all people, but you can be all things to a certain segment of financial advisors.
[00:23:23] Speaker B: And that's what we're breakaway captive broker dealer people.
[00:23:26] Speaker A: Exactly. And there's a handful out there that their niche, call it is, or their kind of business model, rather, is that they'll trade equity with you or they will let you. They'll buy some equity from you to get to have you either take some chips off the table if that's of interest to you, or you just might need cash, right. And want to sell a little bit of the equity in your business to them.
And we've been always, I don't know if that really makes sense. And do people actually want to do that, or is it really just a risk mitigation thing? But then you see these news articles that come out, at least most recently, where you've got a pretty prominent ra roll up in the space that somebody's trying to leave. They don't want to use them as their infrastructure, their platform anymore, but they own a piece of that person, that company's business. So they. It's. How do you divorce from that when they're like, actually, the equity in your business you want to leave? Okay. The equity in your business that we own is worth x amount of dollars.
[00:24:32] Speaker B: Yeah. You joined us two years ago, and you sold me 20% of your business making up membership. You sold me 20% of your business for $500,000. Guess what? Two years later, I think it's worth a million dollars. Yeah.
[00:24:43] Speaker A: And the person that trying to leave is gonna go, actually, I think it's worth 500,000 still or 750. And so who's the arbiter of what this is worth?
[00:24:53] Speaker B: And even if that's in the operating agreement or even if there's in. Even if there is already predefined terms, you're still going to spend a mountain of money.
Right. Like trying to break up at the end of the day, I think at the end of the day, no matter how you slice it, it complicates things, for sure.
[00:25:13] Speaker A: It complicates it, and it makes it extremely expensive for things to go south. And so actually, it's what, it's almost what they do is they dangle this thing out there of, hey, we'll do you a favor, right. And we'll buy some equity in your company and give you some. Take some chips off the table. All that really is handcuffs at the end of the day because you're going to go, okay, so if I ever want to leave, oh, I see right here in this one little line of the operating agreement that I can buy back from you for a discount, and you're going, okay, so we'll see how that plays out when you actually want to do it.
[00:25:46] Speaker B: Yeah.
[00:25:46] Speaker A: And what ends up happening is you see people that are trying to do it right now and they're like, nope, it's not going to be that easy.
[00:25:52] Speaker B: Exactly.
[00:25:53] Speaker A: It's not going to be that easy.
[00:25:54] Speaker B: Exactly. And that's just been like, I think our entire, I don't know, like our war cry in this whole thing with uptick partners is this idea that to the very best of our ability, we don't want to handcuff people to us. We want people to join us, that want to be partners with us and that want to be there. And if you don't want to be there, you don't like it. You don't like what we're doing. You don't like me, you don't like our business model. You think it's too expensive, which we think we're probably the cheapest out there, but you think it's too expensive. Whatever it may be. You want more control, which I don't think you're going to get a whole lot more control by running your own adv. But you want whatever it may be. At the end of the day, I am not going to stand in your way because it's like when today we had a client wanting to join us, but are at holistic planning and they call their former financial advisor and tell them that they're leaving. And the guy is just trying to make it all kinds of difficult to do this. And it just is. The marriage is over, for lack of a better term. Right. You broke up with your boyfriend or girlfriend. And so it's just.
Yeah. Anyways, yeah.
[00:27:06] Speaker A: The idea needs to be, if you don't, it doesn't, you don't want to complicate it just because you feel like it needs to be complicated for it to be special or unique or attractive to people.
[00:27:18] Speaker B: Exactly.
[00:27:18] Speaker A: What needs to. What's attractive to people, at least this is where we're coming from, is the simplicity of it.
[00:27:25] Speaker B: Yeah, attractive. That's what's attractive to us. For sure. The easier it is to understand.
[00:27:29] Speaker A: Yeah.
[00:27:30] Speaker B: The better.
[00:27:31] Speaker A: Exactly. Why does it need. Why does it need to be all these little mechanisms that we'll buy your equity and we'll trade equity and then it will figure out what happens if you want to split ways and then you're in, you're going. Why does it even need to be that when, if you keep it simpler, the joining advisor is going to get a higher payout.
[00:27:54] Speaker B: Right.
[00:27:54] Speaker A: Because if I'm going to give you equity, if we're going to trade equity, you're going to get a lower payout.
It's just fundamental. Why is that? Because you are handcuffed. It's like you don't have to be as competitive as what the street is, what you could get anywhere else. Because I own a piece of your equity.
[00:28:13] Speaker B: Let's also talk about, speaking of the quiet part. Why is it that they want handcuffs?
[00:28:20] Speaker A: That's a good question.
[00:28:22] Speaker B: Maybe because they want to sell their business someday and if there's no handcuffs, it's a lot harder to raise the price on the value of the business if people can just leave.
Yeah, right.
[00:28:40] Speaker A: That's why the w two people are trying to get. There's a couple of firms in the w two space that'll entice the joining advisor with equity in the mothership. And they're going to. They're going to get a lower payout.
And all you're doing is you're trading a today's payout and say, oh, we'll give you 70% payout. It could be 85% payout or 90, but it's not going to be because we're giving you some equity. So all you're doing is trading future potential liquidity eventually for today's dollars in payout. But that's a way to handcuff people. If I dangle equity in your face, you're not going to leave before the liquidity event.
[00:29:22] Speaker B: Yeah, exactly. So then you get the liquidity event, you get some money, but then you're now stuck with this new boss. The other question I also wonder is how easy is it to sell that business, even if I own it, hypothetically, which I'm not even sure if you do or not, but even if you own it and you're a w two employee of this entity, could you sell that business to me?
[00:29:46] Speaker A: Would you buy it?
[00:29:48] Speaker B: Yeah, I don't. Yeah, I don't think. I don't think I would, because then I'm assuming that. I don't see how.
[00:29:56] Speaker A: It just doesn't work 100%, which is why the reality? Everybody that's listening to this podcast would know this, that if you.
Unless, everybody, unless you have a ton of people that want to buy your business, you're going to get less money for it.
[00:30:11] Speaker B: Yeah. Yeah. Supply and demand.
[00:30:13] Speaker A: If you are at a captive broker dealer and you move your book to an employee model and you want to go and retire and sell your business, somebody there at that firm will probably buy your book, but it's not going to be for the market price of what you could get if you could sell it to anybody.
[00:30:30] Speaker B: Exactly.
[00:30:31] Speaker A: Because they know they're going to discount it. Because you don't have that option.
[00:30:35] Speaker B: Exactly. You have a limited number of buyers, means you got a limited price. It's just that simple.
[00:30:41] Speaker A: Which is why, again, if you move anywhere into the 1099 channel, anywhere past call it IBD light or IBD independent light, you're gonna get a lot more money for your book of business. Yes, you can. Anybody can buy it.
Right. And they'll just say, if you were running an RIA, even if you were plugged into a different platform and you're custody, that fidelity, let's say if I want to buy your book, I can just leave your clients to custody at fidelity.
[00:31:16] Speaker B: Exactly.
[00:31:16] Speaker A: No problem.
[00:31:17] Speaker B: Yeah. I don't have to repaper them.
[00:31:18] Speaker A: No problem.
That's gonna, that's gonna retain a lot of clients. You're gonna get a much higher client retention if you don't have to repaper everybody. I vividly remember when we had someone close to us that was leaving RJ IBD, and they were selling out. They were retiring, and somebody came in and bought their book from RJiBD, and they didn't have to repaper people, but they did have to sign all new agreements and all that kind of stuff. And even in that, they were. The hurdle rate was, I think they were, they were happy. If they got 85% of the clients to agree to go with this new outfit. They weren't even repaper. They were just signing up new agreements with everybody.
And it is a. It. There is a factor of if you're buying a book and then you think you're gonna buy that book and repaper them.
[00:32:15] Speaker B: Yeah, that.
[00:32:15] Speaker A: Good luck.
[00:32:16] Speaker B: Exactly.
[00:32:16] Speaker A: Because the people don't even know who you are anyways. The.
So that's. So we talked about. There's IBD called independent light, full ria. You own your Adv. There's all these kind of pit stops in between. And some of them are, candidly, they're good options. And some are better than others, just some that are.
[00:32:35] Speaker B: Maybe it's more of just like you said, it's a niche thing. It's a. What's the technology? It's almost like really the way you want to think about it in that kind of, that middle market there. I like to think of it as what you should be looking for, in my opinion. And what uptick partners desires to deliver is just a service provider. That's what we are, is we are a service provider. We don't own your book. We don't own you. We don't want to be your boss. I want to be your friend. Right?
[00:33:04] Speaker A: I just want to be your friend.
[00:33:05] Speaker B: I want to be your friend, right. And I want to do your compliance for you and provide you with some technology.
And I want to be a partner that can bounce ideas off of each other, share good ideas, etcetera, and get scale in terms of our technology, pricing, et cetera. And to just build a culture that's really the, that's really the idea. But it's. We want to have minimal control over your business other than just, we have to control it from a compliance standpoint to make sure that you're not doing something crazy. Okay. But it wouldn't be any different than if you were operating your own AdV or your own RIA. You would have the same compliance requirements and obligations. Okay.
[00:33:48] Speaker A: I think the best way to think about it is the more we're targeting that niche captive broker dealer advisor that wants to go someplace that they know they're going to grow the most, because they're either going to be able to spend more time focusing on things that add value to in revenue to their business than having to do all the stuff that is really not a lot of fun and just is more of a things you have to do but go where you're going to grow the most. And the way you're going to grow the most is because the technology in the infrastructure is familiar, right? Because every minute of the day and every day of the week that you're not sitting there beating your head against the wall because you used to do it like this, and now you got to learn a whole different way to, to do it, to do the same thing. And so you took me three clicks to do this, and now it takes me 30.
That's that much more time that you're not spending, adding assets to your book or revenue to your pocket. And that's the whole thesis of why this makes sense and why people are doing this.
[00:35:01] Speaker B: Right?
[00:35:01] Speaker A: Why are people joining and not starting their RA. Like, why does not answer. Everybody leave the captive broker dealer space and go start their own Ra? It's because it sucks.
[00:35:10] Speaker B: Yeah. Very hard.
[00:35:11] Speaker A: But why do they not. Why does not every single one of them go into the other employee channel of a different firm? Because they don't want to be employees anymore. They are leaving for a reason.
And this is a. This is what's so great about it is there's now this thing that exists for that niche advisor that doesn't want to do the hard, doesn't want to, like, the hard, terrible thing of opening on their own RA, but they want the next closest thing that's going to help them be able to grow. Yeah. And so if you're in a small town, I encourage you. You don't have to use uptick. I'm just giving you guys our perspective or our experience. Go do. Go start your own Ra from scratch. I'm just encouraging you to do it sooner rather than later, because that first mover advantage is huge. It is a vacuum. It's a Dyson vacuum cleaner sound from all the other firms that are in our town. It's just hired. We've hired two people in the last couple months because we need people to be able to open up accounts.
[00:36:15] Speaker B: Mm hmm. Yeah.
[00:36:16] Speaker A: That was never a problem before.
[00:36:18] Speaker B: Yeah.
[00:36:19] Speaker A: So it really. The go where you grow is a real thing.
Is a real thing. So anything else?
[00:36:28] Speaker B: That's about it for today.
All right, good episode.
[00:36:31] Speaker A: Don't forget to subscribe to the podcast. You can see us on YouTube, YouTube podcasts, Apple podcasts, Spotify.
[00:36:38] Speaker B: Wherever you podcast, go to the website uptickpartners.com. Send us a message. Text us however you want to get.
[00:36:47] Speaker A: We'd love to hear from you, give you. If you have any particular questions you want us to talk about on the podcast, send us a message, let us know, and we'll go from there.
[00:36:55] Speaker B: Yeah, and we might be writing a book here pretty soon, too. It sounds like we write the book on these things. We'll see.
[00:37:00] Speaker A: Love it. Thank you for listening. We hope you enjoyed the podcast. Please subscribe to our channel. You can find more of our episodes on YouTube, Spotify, and Apple podcasts. And check us
[email protected], where you can learn more about how we help breakaway advisors just like yourself, find independence.
