Jim Gold: Building a $40B RIA With Leadership That’s Firm—Yet Fun

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What happens when you combine relentless drive with a culture that's fun, fair, and flexible? In the case of Steward Partners, you get an RIA firm with about $40 billion in assets under management. Hi everyone, I'm business coach Steve Sandusky for Barron's Advisor, The Way Forward Podcast. My guest today is Jim Gold. Jim is the CEO founding partner and board member at Steward Partners. In today's conversation, Jim shares the story behind the founding of Steward Partners and how the firm's equity ownership structure fosters a culture of accountability, collaboration, and innovation. And as someone who's been in the industry for 30 years, Jim describes how the training and mentorship of new advisors has changed from the old wirehouse days He also provides some insight into his leadership style and why one colleague described it as fun, fair, but firm. With that, here's my conversation with Jim Gold.

Who are your influences? So obviously you have your personal experiences when it comes to leadership, but are there books? Are there mentors? Are there other ways that you develop the leadership style that you have today? Who would you say, or what would you say are those influences?

I've always learned by watching others, and you learn as much by seeing people who are not good leaders and the decisions they make and how they handle themselves. You also learn a ton from watching those who do it well. So I think as a person who spent really their entire career in the branch system, as part of the branch system, I've been doing this long enough to see both styles. And I think my style is a sort of a culmination of who I am as a person and learning from the ways to do it and ways not to do it.

Can you give me an example of some bad leadership? You said you've seen that. What might be some examples of bad leadership or a bad decision-making process?

I think bad leadership starts with arrogance. I think if you make a decision and you roll out a decision and the people around you tell you that you might have made a mistake or you may want to think about that differently, you have to be open-minded to embrace that. And I think arrogance is probably the biggest flaw of leadership. I think it's never forgetting that the people you lead are counting on you and you have a responsibility to be responsive to them. I look at them as our folks. You look at them as your clients, right? When you're an advisor, you are responsive and you take care of your clients, or guess what? You're not going to have clients anymore. And I think field leadership in wealth management has to keep that as a, a hallmark or a cornerstone of how they treat the people that are running the client relationships.

I was reading an article where you were being interviewed, and in the article it said a colleague described your leadership as fun, fair, but firm. Would you agree with that? If so, can you describe a little bit those three words, or if there's some other words that you think would more accurately describe your leadership?

Yeah, no, that was actually a close friend of mine, and it, it's absolutely true. So I think that is really It wasn't a mandate in my mind of how I wanted to lead, but it really is a good way to encapsulate my style. So listen, I think everyone should take themself very lightly, not too seriously. So that's where the fun part comes in. You should be able to enjoy each other's company. I think it's really, you want to be fair, right? And reasonable and flexible, but you have to be firm on what is the right decision, right? You have to bring in others to help you validate that decision. But once you've done that, you have to be firm, or you have to be firm and, and resolute in what you've decided. As I said earlier, never be afraid to say, I was wrong. I made a mistake. I should have thought about this differently. When you're running an organization and an organization has to be run in a thoughtful manner, I think you have to be firm in the decisions you make and move forward and continue on.

I know that culture is a big piece of what you are designing and building there into Steward Partners. So Tell me a little bit about how do you think about culture in an RIA firm?

I think culture starts with, you know, at Steward, it's the cornerstone of the firm is equity ownership. So every single person here is an equity owner. And that, you know, dramatically alters the culture because the culture isn't, I work at Steward and, and they're telling me it's a great place to work. It's everyone here is a shareholder, everyone here is a partner. I think culture is driven by having a voice and being able to steer an organization from the field, whether that's a best practice, which could be operational, or it's, hey, there's a new technology the firm should look into as a tool for our advisors, to everything else that goes into an organization. The more of a voice that people have, that's what creates a great culture, right? When they have that feeling of I work here, it's their way or the highway. That's when the culture has gone wrong, right? So we really spend a lot of time on that. We have over a dozen committees at the firm, and these are committees made up of our advisors and the administrative colleagues and ops colleagues and others. And these are everything from best practices to marketing to under 40 to technology to platform. And these people meet monthly. They get together, they share their best ideas, they share their thoughts. They bring them to the appropriate party at Stewart, whether that's management or their peers. And it really fosters an environment of idea sharing and, and true partnership and culture.

You mentioned that everybody has equity. So is that literally everybody? Is it just the advisors? And then do people buy in the equity? Are they awarded equity? Is it part of their bonus plan? How does that work?

Yeah, so it's literally everyone. And that's a, it's a great fair question. So we felt like to do this right, there should be no one here that doesn't have equity in the company. So, when a team joins us from the outside, the advisors have equity as part of their transition package and their administrative colleagues have their own, you know, transition package including equity. And then there's ongoing opportunity for advisors who are growing to earn more equity. There's ongoing opportunity for administrative colleagues to share in those bonuses as their teams grow. So it really is a cornerstone. So we have over 500 equity partners today, and really from a financial perspective, all the equity everyone holds, including myself and the other co-founder, Hy Supporta, we all have the same financial upside. There's no special, you know, privileges that Jim Gold or Hy Supporta enjoy as the founders of the firm.

You mentioned earlier, we were talking about a colleague who described your leadership as fun, fair, but firm. What would 3 words be that you would use to describe your culture?

I would say fun, fair, and flexible. Because people, listen, people have fun here and we have a national conference every year. It was in Las Vegas this year. We had over 400 people there. So every advisor plus their spouse is invited to join us. There are dozens of administrative colleagues there. There are, are dozens of members of management there. As well as our entire board of directors. And we spend 3.5 days together. And a lot of that is sharing best practices and, and the company update. We have a shareholder update because everyone in that room is a shareholder. But there's a lot of fun events that go on. We went to a tour of the Sphere in Vegas this year is a good example. But people say things to me that I love, which is, this is the best place I've ever worked. Or thank you for starting this firm. I had given up on my best days being ahead of me. And now my best days are ahead of me again. And those are the things that are intangible that we love to hear from our colleagues.

And when it comes to equity, if someone leaves the firm for whatever reason or retires, does the firm have to buy their equity back? Can they keep their equity? How does that work?

Yeah, there's different programs, depending on are they retiring? Obviously they have to be vested. So there is a buyback opportunity if it's a qualified departure, whether that's vested or retirement, et cetera. They have a window of time that they're able to hold the equity. We are also conscious of, and I can't tell you why, because 11 years ago when this was pretty much an idea on a piece of paper, we should have been worried about when we're filing for bankruptcy, not how does someone retire in 20 years. So I think that the question we get a lot is, can I hold it longer? I want to hold it longer because they see that, hey, they're getting distributions every year. The equity value goes up every single year because every year at this firm since its founding has been a record year. We were also cognizant of the equity should be in the shareholders' hands of the active shareholders. So there should be some period of time post-retirement you can enjoy some additional upside and benefit, but at a certain point it should be limited in scope. So we've, we've looked at that, we've talked to our peers about maybe enhancing that slightly. So that's probably something we'll, we'll put on the drawing board for '25.

You have a couple of large outside investors. Typically, these outside investors have a shorter timeframe in terms of when they want to get a return on their investment. How do you balance the needs of your large outside investors with trying to build a firm for the long term?

Yeah. So if you think about, Stewart, and I've asked this question or made this comment to over 1,000 people and no one's ever disputed it, which is there's never been a firm built to our size that didn't take in capital around launch. So we took in no capital for 6 years. So when I tell you it was the long, hard road, it's going to be a great movie someday and I will invite you to the premiere. So taking in capital in 2019 from Sine Ashore as a family office was our first outside capital. And then we took in capital from the Pritzker organization, which is Tom Pritzker's personal family office. Was $100 million. And in both those cases, by the way, almost half of that money went out to the entire organization as a liquidity opportunity. So I think it's important in a privately held company, you have to validate the value of the equity on a regular basis. You also should create liquidity for partners on a regular basis because otherwise the equity somewhat becomes like Zillow for your house, right? The number might sound great, But is someone actually willing to pay for that? So in those cases, and I've always believed in, there's absolutely the right capital at the right time. In those cases, we wanted long capital. Both of them, I mentioned the fact they're family offices, right? There is no clock, there is no minimum holding or maximum holding. They are combined, they are absolute minority investors in the firm. And they're happy to be in Steward and continue to support and help our growth. They've been tremendous partners to us, and we couldn't be more grateful than we are to have them here. But there's never been pressure on liquidity. It's more about saying, hey, the firm's doing great. How can we support you? What else can we do for you guys? Which is really wonderful in a partnership.

Growth is clearly a key part of what you're trying to accomplish there. So You started out as an advisor again about 30 years ago.

Yeah.

If you look at how you were building your business as an advisor back in the 1990s and you flash forward to today, how has it changed in terms of how an advisor can build a business? And then how is Steward Partners different, or is it different, in terms of how you're helping advisors continue to grow their business today versus back in the '90s at Smith Barney? And what Smith Barney was trying to do to help its young advisors build their businesses?

Yeah, I think obviously the business has changed dramatically. I think what you're seeing is, and why most of the firms have gotten away from traditional training programs, your newer advisors need to have a, a period of time where they're more of an apprentice, if you will. And then you really couldn't build this next-gen advisor, you know, profile. So I think the advisors coming in absolutely have the best success joining an existing team. Where they don't have to be the advisor. They don't have to go from, hey, I was in another business, I took the Series 7, now I'm supposed to be a market expert, a marketing expert, run my own business. It's pretty incredible when you think of back in the day what advisors did and survived in the industry with all the challenges ahead of them. So we have a lot of younger advisors. Many of them are folks that start in different roles that graduated into being an advisor. Almost all of them are on teams. And I think that's really a way that is the best way for everyone. An interesting parallel in sports franchises do this where they draft a quarterback, but they don't start them for 2 or 3 years and they let them learn behind the starting quarterback. And then that tends to have someone who's more ready to take on the enormity of the task ahead of them. But I think that, listen, the core of being an advisor hasn't changed, right? Clients want honest advice, good advice. They want you to be unconflicted. And that's one of the key things we do at Steward. Whenever I talk to the media, if they say, Jim, what's your market outlook? I say, I don't have one. Our advisors and our clients, the clients should get the market outlook from their advisor. The clients and the advisor should have that conversation, not Steward. So we never want to put ourselves in between our advisor and their client, whether it's product, whether it's research, whether it's opinion. That's not the firm's role. What's gone out of whack in the industry is very simple. The client is the most important entity in this relationship. The second most important is the advisor because they serve that client. The least important is the firm. All of these firms have turned the hourglass upside down and they've put the firm first, which is absolutely wrong in my opinion.

So again, back when you started, it was pretty much still a commission business. Today it's pretty much flipped, and now it's pretty much a recurring fee type business. And back in the commission days, if you couldn't sell, you didn't make it. Whereas today you join a team and you sort of apprentice, as you mentioned here, and eventually perhaps you get some of the clients from the lead advisor because they've got too many clients, and now you you get, quote, handed these clients or inherit these clients. First of all, would you agree with that? And then second, how do you think about the business development piece in terms of, for your advisors at Steward Partners, are they pretty much developing all the new business at the team level, or is there also a corporate marketing function at Steward that is also trying to generate some leads that then get passed on to the different teams there?

Yeah. So I, I think the most teams are utilizing the apprentice position in a way that you described. I think it's a little different where depending on the business, you might say, hey, here is a tier of my clients that you can give full-time attention to that as I have 500 households, right? I can't give them all the same level of attention. In the right scenario, that tends to drive significant organic growth because that apprentice is going to go in and say, hey, I'd like to do a new financial review for you. I'd like to do an insurance review for you. Have you had your grandchildren's 529 reviewed? And there's usually a terrific opportunity to bring in new assets that are in underutilized client relationships. So that's one we do focus on. We have not launched a sort of digital marketing or firm marketing to the direct public for our clients. And where we've had some hesitancy to do that is going back to messaging. And I can remember back in the day at Smith Barney when we had a number of years we were part of Citigroup, and the worst thing ever would be a Smith Barney client, and it's no one's fault, it just happened. They come in to me or their advisor comes in and says, why is Citibank emailing or mailing my client a flyer about CDs? And now all of a sudden you've put the firm between the client and their advisor. So it is something we're looking into. We are going to build something along those lines to help foster new relationships for our advisors, but we want to do it with their help and their guidance on it. Where most of our folks are really growing is we have a tremendous marketing department, and there are lots and lots of things that you can do as an advisor that you can't do in a traditional wealth management firm. And there's no rules or laws against them. It's they've made a business decision to limit things like social media, right? We've had advisors who have their own YouTube channel for 10 years. So these bigger firms are not nimble. And when they roll something out, everyone else has typically had it for 10 years. So our advisors have taken full advantage of that. They found new ways in digital and marketing and social media and podcasting to build a new base of clients from that. And we've seen explosive growth in many of our advisors from it.

You mentioned that clients are the number one in terms of clients, advisors, and the firm. As you think about what clients' needs were, again, 30 years ago when you started versus what clients' needs are today, how much have clients changed or have they changed? And what do you see are like the key things that they're really needing and wanting today from their financial advisor?

Yeah, I think the funny part is for all the other changes, I think the client-advisor relationship is exactly the same. Right? A client wants someone who's competent, someone who they can trust, someone who's responsive to their needs, which all of this is so common sense. Right? But that's really the core of the advisor-client relationship. Sometimes, you know, and you build very close relationships with your clients. Right? Because you become a family counselor. And it could be, and we see a lot of this today where clients have aging parents and they're dealing with parents who have health issues, whether that be dementia or physical issues, what have you. And they're dealing with those things. And how do you retrofit a home for an elderly parent. People have problems in their families and they have children issues and estate issues. So you really become like a family counselor and the dollars and cents and the trading over time almost becomes secondary. You, you touched on earlier the change in how business is done. We were very fortunate at Smith Barney that through their E.F. Hutton legacy, E.F. Hutton pioneered the idea of working with a client on a, a single fee basis. So Smith Barney was always way ahead of the curve there. What's interesting is at Steward, about 70% of our advisors are CFP® designated or higher. So planning is obviously critical. 87% of the revenue that we do as an organization is done in our corporate RIA. So we are very heavily planning-based and advisory-based with obviously the vast preponderance of our clients.

And do you guys have a high net worth focus, or is it just that you've got all different kinds of advisors at all different levels of client sophistication. So who are the typical clients of the firm?

Yeah, it's a high net worth focus, and I think it really is driven by the advisors we welcome into the partnership. So our average advisor does about $1.2 million in revenue. So these are, if you think about that number, right, that's the number you're going to hear from a Big Four wealth management firm, right? And that's actually higher in some cases. It's significantly higher than most independent firms. So when you have advisors who tenured, who are accredited, who work in a holistic manner, who are larger producers. They tend to be the folks that serve the affluent and very high-end mass affluent.

And with $1.2 million in revenue per advisor, roughly how many clients would they be servicing?

Usually it's a couple of hundred households, but many of them do it, as we talked about earlier, through a team. So it could be a lead advisor, more of the apprentice or junior advisor, and then the administrative team around them.

Talk to me a little bit about the future of the firm. How do you picture what Steward Partners will look like a few years down the road?

Yeah, I think, listen, people ask the question about Steward and our success, and listen, we don't focus on yesterday. We're focused on tomorrow. And I think great companies have to do two things. You have to be able to execute, because if you look at our business plan, there's been 500 companies launched with our business plan, and 490 of them are at the bottom of the ocean next to the Titanic. So it's about execution, number one, more than anything. And the second part is evolution, right? If you look at Steward today, there's hallmarks of what we are that were there from day one, like the equity ownership. And then there's brand new offerings that we have that are, you know, dramatically changing our growth trajectory and everything else about the firm. And that would be in this case M&A, right? So up to a year ago, we had never consummated an M&A transaction. We've now done 7 and we have 7 more under LOI and we have a pipeline of 5 or 6 dozen names that we're in conversation with. So the future of Steward is brighter than it's ever been. I mentioned this at our conference a year or so ago. I said, you know, like that great Frank Sinatra song, The Best Is Yet to Come. And so look, we're going to build from here a billion-dollar revenue firm. That means we need to basically triple where we are today. And we're going to do that much faster than it took to get to where we are today because we have critical mass. We have over 5 dozen offices. We have a 100-person leadership team and 500 partners that are out there in the community telling all their friends and peers how great it is to be here.

You mentioned execution is one of the key things there. Tell me a little bit about how you execute, maybe the planning process, how the leadership team works, how you hold people accountable, how you set goals, how frequently You review the initiatives and objectives that you have. How does the execution process work?

Listen, execution is every day, right? There's no coasting. There's no point of saturation at Steward. We don't care that we've already finished 10 marathons. We're putting our sneakers on for the next marathon. So it's a daily thing, right? It's a daily process. We're on calls all the time. We have a tremendous board of directors. I mentioned Charlie Johnson. We have Bob Mulholland, who ran Merrill Lynch back when it was the Thundering Herd and then ran the field at UBS. We're the only board Bob's ever served on. We have Janet Robinson, who was the CEO of The New York Times, who's on the board of the Carnegie Foundation today. And then we have our outside investors and others. So a tremendous board. We actually had our board meeting yesterday. And look, we're measuring this quarterly with the board. We measure it monthly with our team. We're measuring it weekly. We go through pipelines and who's having what conversations and where are we at. It needs to be a relentless ongoing pursuit. And for me personally, this is what I did when I was a trainee. I used to dial the phone 500 times a day, cold calling people on Long Island. They were so happy to get my phone call when I called them. So, but you have to, if you're gonna succeed, you have to be relentless and you have to outwork your peers, right? This is the most competitive business in the world and whatever skills and attributes you don't have, you can make up for them by outworking everyone else.

Where does your relentless come from? Obviously, you're at a stage in your life where you probably don't need to work anymore and you're doing fine. Yet here you are just still crushing it. So where does that motivation and drive come from?

Listen, I've always thought personally is your goal should be to be extraordinary. And any job I ever took, I would say to my boss, tell me what the best person you ever hired did. And they would say, why are you asking? I said, because I'm going to do more than that. So that is an outlook and an attitude that our management team shares. We're not here to be ordinary. We're here to be extraordinary, right? And that's what we want to do, and that's what we are doing. So we embrace that so heavily. And I always say, we'll all slow down when the race is over, right? When someday comes and you retire, you can slow down, right? But for now, you, you're going to run at full speed until you get there. So the simplest thing in the world is you never stop if you keep increasing your goal. So the original goal 10 years ago was, what if we could build a firm with 10 branches that did $100 million in revenue? If we stopped there, I would've retired 6 years ago, right? So what we keep doing is we keep increasing the goal. So now the goal is $1 billion in revenue and probably $120 billion in assets. So that helps you stay very focused on the road ahead, not the road or the accomplishments behind you.

Your role is clearly not a stress-free role. So what would you say keeps you up at night? What's a challenge or concern that really causes you to lose some sleep that you don't often share publicly?

Honestly, I can't think of much. I don't worry about our people or the firm or things like that. I, when I wake up and I call it the 3:00 AM boardroom meeting with yourself, you're laying there in bed thinking about what's on your mind. What's on my mind is going, Oh, I have to follow up with so-and-so and I owe that person a callback from yesterday and I got to make sure we get that offer out. So it's more almost like a refresh of my rolling work calendar in my head. But I'm not a nervous person by nature. I don't get worried. I don't mind. All this stuff is fine, right? It's part of the job, right? There's litigation and competition and you worry about making sure we're competitive, which I do worry about that. But yeah, listen, we have such a wonderful team and organization around me. It's not at all what I do, it's what the team does. And I'm just fortunate to be the leader of the team.

You mentioned that you think this is one of the most competitive industries out there. What would you say is a hard truth about building a successful advisory firm? A hard truth that most people don't really want to hear?

The hard truth is that 99% of the people are going to give up and not give it the time and attention it needs to be successful. I told my wife when we started Steward, and she said, so what's the plan? I said, look, the plan is either way, you and the kids are gonna be fine. And she said, what does that mean? I said, I'm gonna kill myself to make sure this is a rip-roaring success, or I'm gonna drop dead of a heart attack trying to do that. And you guys will have the life insurance money, so you're fine. And she said, let's go with door number 1 there, big guy. That sounds much better to me. Their door number one, it was, thankfully.

Yeah. And this really begs the question of why. Obviously, you're an extremely driven person. You're working super hard. The story you just told here about your wife and what you said the two potential outcomes are here. So what's the why behind why you were working so hard here?

I wanted to show the industry that you can build a great firm And what people remember as the good old days can still be today. And the industry got so far away from that, and it's run by consultants and what have you, that we lost that. And that was really the whole genesis of Steward, which was saying, we're going to build an organization and give people, advisors and their teams, give them what they deserve, right? Because advisors are very simple people in a good way. They want to have a firm that says, hey, I'm here to help you, right? I'm here to support you. I'm never going to get between you and your client. Don't play around with my comp plan every year. And when I need your help, help me. And gosh, if I can enjoy spending time with you, we can have a little fun. This might be the best place I've ever worked. So like most things in life, it's remarkably simple. People overcomplicate things.

Jim, as we get ready to wrap up here, is there anything else that you want to share that I haven't asked you yet?

Listen, I would share that again, I do profoundly have gratitude for the opportunity I've had, and I love to help mentor and help others who are behind me, and I'm always happy to take a call. So I think there's a pay it forward that people do, and I think that's a wonderful part of our industry. I think this is the best industry in the world. I think unfortunately the industry gets painted with a brush of tarnish. And I would say no one makes a movie about the millions of people that work in this business that work hard every day and deeply care about their clients and go home tired every night and wake up and come back and do it again tomorrow. Because no one's going to go watch that movie. They want to watch Wolf of Wall Street or Boiler Room, right? So unfortunately, I tell— for people who are not in the industry that might hear this, I would tell you it's the best industry in the world. It's an industry that you can really impact in a meaningful way the lives of others and do a great thing for you and your family as well. All right. That's all for today.

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This podcast was brought to you by Wells Fargo Advisors. Looking for a firm your clients can't outgrow? Wells Fargo Advisors offers financial advisors full balance sheet solutions with wealth planning, investment products, banking, and lending that meet the needs of affluent to ultra-high net worth clients. Build your practice your way and on your schedule with independent and employee model options designed to meet your needs today and tomorrow. Learn more at joinwfadvisors.com.