Episode #605 - From Philosophy To Finance with Jonathan DeYoe, Senior VP of EP Wealth Advisors

Welcome to this edition of the million Dollar Mastermind podcast. This is where we pick the brains of high achievers from all walks of life and get their hard earned real world insights on winning. I'm your host, Larry Wydell. I'm talking with Jonathan Dio. Thanks for joining us this afternoon, Jonathan.

Thanks for having me, Larry. Glad to be here.

I'm excited about hearing your story, which is amazing and unique in the sense that where you started, you started, it sounds like from a spiritual standpoint, you turned into financial advisor. But then you went out and you did something really amazing. Pretty early in the game, it seemed like, or I don't know how long it was before you, you, it says 90s. You start out in Wall street in 96, out of grad school. But before long, 2002, like some of the great titans of Wall street, you, after spending a few years working for the other guys, getting your feet in the ground, making contacts, you went in and made the big jump, which is risky and competitive, starting your own wealth management firm. But that does give you the chance to learn faster, build your independence and have great things happen to you. So you made that jump and what I have and you can fill in the gaps. You started with six clients in 2002, and it's very hard to start a new wealth management firm. Even the guys who started BlackRock, yep, they were legends inside other companies. And when they went out, they thought all we got to do is we go out, we form a partnership, bam, the world will come racing to our door because of our reputation. And they went in and nobody called. In fact, they sent out hundreds and hundreds of flyers, brochures, they made calls, they flew around the world. Nothing, you know, and, you know, they finally dug it out, you know, and it's like so many things, you have to dig it out. I just read or saw YouTube last night. Eddie Van Halen, I'd never heard this. When they started, rock and roll was dead. You know, there was the kind of music, pop music was out there. There's no record company wanted to sign a rock band. So he said, well, we wanted to play rock music. So we just put our head down and we did like a thousand gigs, you know, in a short period of time. He said one 11 month period. He said we did hundreds and even like 28 out of 30 days in England. And then we came back and the record company said, yeah, we want to make you an album, but now you also owe us $3 million. And Eddie said, how does that work? But of course they kept on going and they just ground it out. But it's amazing how that necessity of that comes in, even if you've got the reputation and prestige of starting your own thing. Not everybody. You got to prove, you know, you got to prove, you got to grind. And so we want to get into this. So congratulations on that achievement early in your career, building that up to over 200 clients and 300 million in just 20 years. And then you went on and you merged and you will hear that story. But how did you get. Why were you in studying financial? You know, I, I kind of wish I've grown up. I grew up wishing that my parents had told me to be a major league pitcher, but that would. Wouldn't have worked to get that contract. But at least, at least put me in the direction of maybe becoming a hedge fund guy, you know. No, but nobody told me that was a good option. You know, you got competition, you got, you know, you got a lot of interesting people. You stay in touch with the world and rumble, you know, rolling. It's just like sports. But nobody ever mentioned that to me. Somehow you got that idea early on. Financial services is the way to go. And I eventually wound up there, by the way. But you got it early on. So talk about that. How did that happen?

Well, I was poor, so I wanted to. And I knew that if I wanted, then I needed to be good with money. And so I, I went to a, I think it was a private Ledger office in Rapid City, South Dakota. When my, when my mom was shopping downtown Rapid, I went into a private ledger. This is Private Ledger, merged late 70s to become Lynsco Private Ledger, one of the largest independent broker dealers. And I was going to their office reading Value Line research. And when I was nine years old, eight years old, nine years old, I bought my first stock when I was nine, lost 50% of the investment. My dad kept sort of encouraging me to keep thinking about it. Went to college, ultimately invested as a kid, and then went to college ultimately to study finance. But after reading Value Line for years and years and years and reading about business and reading business books and reading about real estate and get to college and studying finance was boring. So boring. So I shifted to philosophy, and I studied philosophy religious studies for four years in college. And then I went to grad school in Tibetan Buddhist phenomenology and studied that. Loved every minute of it. And then my wife said, okay, it's your turn to work. Well, I go to college, I go to grad school. And so, all right, let's do that. And I found a job, and what could I do? So I went back to stocks, and I got hired at Dean Witter. And I was at five different firms in five years. Mergers, acquisitions, lots of stuff happened. And I moved a couple times, and then ultimately, as you said, 2002, started my own company, Money.

And so how did that form in your eye? How long did that idea form in your mind that that was the direction you wanted to go? And at five. The great thing about five companies is you get lots of exposures. You meet a lot of people, you see. You see probably a few things. You like how it's done, and a whole lot of how you don't like how it's done. Tell your story for you. What did that five, your expo that that exposure give you? And where along the way did you say, I'm gonna get. I'm gonna do my own.

Yeah, that's. That is such an important question, and no one ever asks it. I love the question. So I had a lot of really good managers. I had a lot of really good mentors. I had one guy who worked. He was the first manager of the combined Morgan Stanley Dean Winter office in San Francisco. And I think we called him the Iceman. I don't remember what his name was. We called him the Iceman. And he, as a young bro, he would call me into his office and he would say, okay, Jonathan, what I want you to do is I want you to dial this number. Tell him to hold on for me. That was my job. I had to dial this guy's number. Tell him, hold on, hold for Jim. That's his name. Hold for Jim. Hold for Jim. Hold for Jim. I do that for, like, four hours. Then I go and study my. Study my texts to get my exams done, right? This guy was. He was cold, and he'd walk through the aisles. I remember him walking through the aisles of the office saying, okay, we've got. You know, we've got this much product. We got to move it. You know, call your clients and get this stuff done. And get this stuff done. So it was just. It was all product pushing. It was all sales and stuff. And so I learned that at a couple firms, I learned a lesson about the protection of their best salespeople, regardless of the ethical nature of their jobs. They pull out all the lawyers to protect the guy that's selling the most widgets. And I got grossed out pretty quickly. But I had a guy named Ernie Guzman, and Ernie was probably the most important mentor in my early career. And he said, the thing about this business, Jonathan, is there's lots of ways to do it. You can do it your way. And so I started just focusing on financial planning. I quit selling product. I quit trying to get the 5, 6, 7% commissions. Let's do some planning. Let's build a balanced portfolio. Let me look at your whole life. Let's think about this in the big picture. I love that. But that's not how you get paid. That's not how you got paid 25 years ago on Wall Street. So ended up saying, the only way I can do this, really serve the master, which is the client, not the firm, is to start my own company. That's really the instigation for it.

Well, I got exposed to that aspect early on, kind of indirectly when we were in a financial planning company for middle income people. Later became. It was later became. And I'm not supposed to say that because of lawyers, but the. So I'm gonna. This would be like a needle in the haystack. So if they actually find that, I'm gonna give them a jar of jelly bones. I said, you know, I did that as a test to see if you could find it. But it's not that I don't mention it on here a lot because not that I'm not proud of it, it's just that the lawyers, you know, and so what happened is we moved up, we said, we want to participate in our success, let's get a reinsurance company. And so the guy that we credited as being the founder, we kind of all did it as a cooperative. But anyway, the guy who was in charge, he goes to New York to raise money with the investment bankers. And they get him in the wool, you know, the wood oak paneled office and the big thing and the big formal. You're supposed to impress them and they're all dressed up to the nines. And he shows up in a sweatsuit and they put all their presentations on there. And he got up to speak. I was not there. I heard this. He said, let me just tell you what I think of you guys. You're all a bunch of whores. He said, you don't go what you're selling, you're just selling it to whoever will buy. And he had a peg pretty well, at least a majority, you know, a lot of them. And so what you're saying is in a maybe not so crude way, you saw that happening and you didn't like. You saw happening from the inside and you didn't like it.

So there's a story that never gets sold. Also for the lawyers, but I won't name names, but I'll tell you the story. So one of the final straws in the whole conversation. So that happened the whole time. Like every firm I went to, there's always that sell stuff. Sell stuff in the underbelly.

Yeah.

I had a team of three advisors and we had some support staff. And this is at the time, it was at ubs, Pain Weber, ubs. And we were heavily recruited by another firm. And this other firm was the firm that led the dot com stock option stuff. So if you had a company and you were public and you had stock options, more than likely you cleared those options through this company. And we were constantly taking business away from them. The whole idea of owning the stock option plan for a company, if you own the plan for Cisco, you know, the people whose options are now coming available. So you know who to call. Right. You have a direct line to potential new business. And. And we had figured out a way. My team had figured out a way to actually not get the list or get the names of the people whose options. But we got into those companies, you know, we had a client there, and they got us in there, introduced a bunch of people. We were just taking money out of there all the time because we were planning, orientated, we're doing it the right way. And so this company recruited us, recruited us, recruited us, recruited us. And we finally, you know, we said, okay, this looks like a good opportunity. We'll do this. We moved from ubs, Paine Weber to this company. And within three months, we. And we were the fastest growing group at UBS Pay and Weber. We were killing it. We were doing really well. We moved within three months, our team had imploded. We had discovered all kinds of, you know, nefarious crap at this new firm. Overbilling appliance. You know, our assistant discovered that universally clients were being overbilled and then not told. And we were like, we got to send a letter out. And we were like, no, you can't send a letter out. That's. You know, every other advisor was like, horrified that we would even suggest it. And so this place is totally unethical. And then we said, okay, we're done. And we left. So we were there for three months. Clients don't follow you. They don't think you've done your due diligence if you leave three months after you get there. So I started all over. 100% brand new again. I went from a book of like 200, 250 million to zero and started over. I think maybe at that point I had maybe three clients that would follow me again. So we took those three clients and we started over. And that was 2001. I lasted one year at the new place. And this is, you know, options are all worthless at this point. The way we had done business didn't work anymore. We didn't have access to the money to start the new things out. And so my manager, and this is another downside of the industry, my manager was like, okay, you need to up the revenue you produce for the company, so you need to start selling B share mutual funds and annuities. And I was like, I'm not going to do that. That's crap that hurts the client. So they let me go. And then, you know, I was like, already knowing that this is coming and I'm, I'm already planning and I have a relationship with lpl and I start with an independent broker dealer, you know, a week later, and that's this launch, you know, in the basement of my house. Took the six clients with me and then there we are, we off to the races at the new thing.

Did you pick up while you worked with these companies, were you moving into any management. Did you give her any management experience or responsibilities like that? Or were you just a gunslinger? I mean, you know, you just.

I was an advisor. I was an advisor. Gunslinger, salesman, that's all I was.

Did they now how much when you originally went in? I could just see their jaw dropping. Oh, Lord, thank goodness. We've been waiting for a PhD candidate with zero sales experience to come in our door with high morals and no experience, but lots of time spent on quality of life and doing things the right way. This is really who we're after. In fact, we are fortunate to get him because usually these guys go to work at car companies.

So this is 1996, right? So we've had three, four great years of tech boom. We've got four years ahead of us in tech boom. And really I'm smart, I can talk. But really the interview process was. Do you have a degree? Yes, I had a degree. Can you think on your feet? Yeah, I can think on my feet. Can you cold call? If you could cold call, you would have a job. It didn't take much to get a job with a brokerage house in 1996, 1997.

And how did you know you could cold call? Did they train you on that? They say they would give you any training or they give you some training.

I just am not. I'm just not afraid to talk to people. I hated it. I didn't like cold calling, but I was one of the top cold callers. I could make 350 dials in a day, right? I could cold call with like nobody's business. But I had also, I had a really good mentor there too. And he just, he gave me the script. He gave me the. This is how you track your calls. You know, circle this one, cross that one out. You made a connection. What does that mean? How do you follow up? Told me how to do all that stuff, but great mentors, teaching and just too stupid to fail. Like, I was just. I just dug in, dug in, worked hard.

And so were you calling off of lists? Because back. Way back then, you know, you would buy lists of people that are kind of qualified, semi qualified, and that's what you get a list and you just smile and dial.

So it's a couple different things, a couple different ways we did it. They would give us cards like people that had suggested they'd had an interest in stock investing. We would get those cards from the manager and they were all crap. And then we'd get back in the day. They had a reverse directory. You go to the library, you check out a reverse directory, and you pick a neighborhood, and you'd look at the addresses of the neighborhood and it would give you the phone number for the people of that address. So you could pick out a neighborhood with an idea of the wealth level and you just cold call that neighborhood. That also didn't work really well. And so the way we really got to be successful is we.

I'm being reminded of various stages in my career where I used to joke with the CEO. It's like, well, one more time I proved to myself I can't do the business.

Yeah, no, it's over. Learning, learning, learning, learning pivot. Learning pivot. We finally figured out a way in the. This is the late 90s to. And this is probably not legal, but you could call in a company like five o' clock in the morning and you dial an extension, and the extension would, you know, they wouldn't pick up. And so you'd know the extension 1758 at Cisco was Bob Samuelson. And so you'd write down Bob Samuelson, 1, 7, 5, 8. And if you hit pound, it sends you back. So you could dial a different extension. So then you dial 7, 5, 9, that's Sammy Davis. And so you'd hit pound, and you go back into 1 7, and she just build out a whole list within a company and then 9 o' clock shows up and people show up to work, you start dialing the company. You built your own list and that was incredibly powerful.

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