Experience the Freedom of Independence with Jeff Concepcion

00:05
Charlie Van Derven
Oh, I'm here real quick. I couldn't be more excited for our guest today. I'm Jeff Concepcion, founder and CEO of Stratus wealth partners is joining us on RIA collective today. We're going to talk about Jeff's experience in the industry. That's not very often. I get to interview somebody that's got three or more decades. In working with advisors, we're going to talk about, FINRA's numbers continue to decrease . And, and so Jeff's on the independent side of our industry. I want to pick his brain and see what he thinks the catalyst behind that is. We're gonna talk about, culture, mission, that thing is Strauss, Stratus, wealth partners, and hopefully bring some wisdom to our listeners who are considering that change from a wirehouse environment into a more independent RIA space.

00:56
Charlie Van Derven
Jeff Concepcion. Welcome. Thank you so much for joining me today.

01:00
Jeff Concepcion
Thank you for having me and thank you for mentioning the three decades, because I'm sure in looking at this baby face, no one would ever recognize that level of experience. So thank you for that call out.

01:08
Charlie Van Derven
And, and Jeff, I wouldn't actually right. And, I was saying before we started recording, I actually met you nine or 10 years ago. Maybe, maybe social advisors is nine years old now. Maybe it's 11 or 12 years ago at an LPL conference when I was with FMG suite. So, I've been watching you and following your career now for 10 years. Of course we do some work together on the recruiting side and yeah, you absolutely do not look like you've got that kind of experience.

01:35
Jeff Concepcion
I'm having fun. Haven't worked a day in a long time just having fun.

01:38
Charlie Van Derven
That's awesome. I look back, I got started in 98, putting advi, putting websites together for wirehouses and man we're talking almost 25 years ago and I gosh, where did that time go?

01:49
Jeff Concepcion
It does fly when you're having fun. It.

01:51
Charlie Van Derven
Does. Most days I am most days, some days there are exceptions there, but most days I'm having fun, which added about NFL football or both NFL fans growing up in small markets like Cleveland and in green bay. All that stuff aside, Jeff, I'm interested in picking your brain bringing some wisdom to our listeners, the numbers, as we talked about the, the numbers that FINRA and I don't have the specific stats in front of me, I'm sure with a couple of keystrokes, I could find it very quickly, but I mean, for a decade, we've watched this thing decrease with the firms that are registered right with the registered reps, registered with FINRA. Tell me about that. What do you think the catalyst behind those changes and those drops in numbers are?

02:31
Jeff Concepcion
I think it's some of the stuff that you and I have chatted about and the folks I think there are two components to it. There's an, there's an evident component. There's maybe a less evident component. I think what people think about really is this migration from employee bank wire to independence. There's also what people believe to be probably the simplification, if you will, of having maybe one master, not two masters, the sec versus the sec and FINRA. I think some people naively think that there's less supervision on the sec side and there really isn't. I mean, the sec and FINRA probably are more connected today and communicate better, even inclusive of, state insurance agencies. There's more communication I've found between all these agencies, which is really good, but I think it's really the flexibility to be a fiduciary to kind of take that fee path.

03:19
Jeff Concepcion
That's sort of the evidence part. I think the less evident part is I just think there are fewer people coming into the industry. We have an old and aging industry. People are leaving and exiting towards that fiduciary environment, you have fewer people coming in as well. It's a combination of those two things, I think, to your point that have led to these declining numbers.

03:38
Charlie Van Derven
Yeah. And what about technology? I mean, I think, if we go back 10, 15 years ago, and again, I got started doing websites for, for a handful of wirehouses, back in the late nineties were doing data-driven templated websites. My goodness, how far has that simple marketing technology come over the last 20 years, but also things like financial planning software and, and, and other parts of that technology stack years ago, if you wanted the best resources you had to work for the largest firms, it seems to me that, an open marketplace is actually driving more evolution and more change as far as technology making that, independent broker dealer or that RA world even more attractive,

04:21
Jeff Concepcion
No doubt. I think there's a myth there, right? I think, one of the stories that the big firms, the employee based firms told their folks is, Hey, those little independent shops are great. You might get a good payout, but you can't serve your clients in the same way. You think about independent broker dealers, when you think about multi custodial, our IAS and all the tools that you referenced that are out there, I think in many cases, advisors at a minimum can do what they did previously technology and product wise. I'm going to suggest that in most cases they're actually able to do more by accessing what's out there through the best independent BDS, purging Schwab, fidelity, TD Ameritrade, they're getting access to more product as good or better technology, whether that's CRM based, whether it's planning base, where there's performance reporting based. We brought over a great team.

05:08
Jeff Concepcion
Who's been with us for a handful of years now from BNY. It was a high net worth team. On the one-year anniversary that the guy who runs that team is really buttoned up and he wanted an audience to say, let me tell you what my experience has been. One of the comments he made to me is he never anticipated. There are lots of things that he expected out of independence, but one of the things that he didn't anticipate is this annual review that he could put together for his clients, with the data and the analytics and all the substance. He never expected that would be as good or better than what he was able to present at BNY. And sometimes it's the customization, the flexibility. To your point, a lot of these shops that are just creating great tools for, for technology for independent firms.

05:48
Charlie Van Derven
Yeah. I think what about, I want to ask you about risk, right? Because I've asked this question of on the broker-dealer side recently on the wirehouse captive kind of employee model broker dealer side. They said, yeah, but when someone goes RIA, they take on a whole lot more risks. They're not backed by the firm. I, I, I really don't have commentary on that. Jeff, you're in a better position to talk about that. Do you, do you feel that's true or yeah.

06:11
Jeff Concepcion
Yeah. No, I think it's, I think there are aspects of that at least that are true. I guess it's dependent on how you define risk to an extent when you're attached to one of those larger firms, there is that mothership feeling, right? Yeah. I think you can find risk in many ways. Talk about it from a business standpoint, the mothership pays for real estate when you go independent. Sure. In our particular model, you can cover real estate or we can cover it. When most folks, but independent, they're signing a lease, they're taking on an obligation for space and infrastructure and technology, all the things that we're talking about. I think there's risks there to a degree, if an advisor were to get sideways with a client, in some cases, the mothership, is responsible not only for providing them, which becomes a line item when they go independent, but maybe sometimes even subsidizing if there's a resolution involved.

07:05
Jeff Concepcion
I think from a business standpoint, from a regulatory, from a compliance standpoint, from a financial standpoint, there are degrees of risk. The question is, are those degrees reasonable in exchange for the reward that they receive? I would suggest that they're beyond reasonable because there's such a lift in terms of not only compensation, which is the obvious, but net worth value of their enterprise when they own it in a free market. I would say that there are probably some risks it's fair to say, but the rewards, so grossly outweigh them, that we continue to see this migration you referenced earlier.

07:35
Charlie Van Derven
Yeah. I, and I'll tell you what I think the fiduciary piece of that is a really important part of the conversation, right? There are, I don't, there's a lot of brands out there that won't want me saying this, but there are inherent biases when you're representing a large firm that maybe has products to sell that, so being in an independent space, not being, so tied to that particular firm and those particular products actually allow you to represent as a fiduciary where, you don't have to comment on a gel, cause I don't want to put any words in your mouth whatsoever, but you can say that word when you're with a large firm that has some initiatives. Right. Have some, some goals, but is it really true again, I don't need you to comment on that whatsoever, but just go for it.

08:26
Jeff Concepcion
But then yeah. I mean, I think some firms manage it better than others and others are just riddled with conflict in terms of mandates, if you will, to have pieces of proprietary product inside of portfolios. Sometimes that proprietary product, doesn't bear the name of the firm or the platform. It's even the less obvious that it's something where there's, they're getting more juice when certain products are used. You see it through initiatives for cross sells for lending, for, all kinds of stuff. I mean, so there's no doubt in my mind that someone could be an advisor could be well-intended to act on a conflict-free basis and in some of the employee type environments in larger firms, but it's almost inherent and almost forced by the model that is more challenging. I'm not saying they can't do it. I'm saying it's more challenging to do it based on some of the conflicts.

09:15
Jeff Concepcion
So yeah,

09:16
Charlie Van Derven
Yeah, absolutely. The truth. I say when an advisor is moving independent, fiduciary is really the messaging around that. Right. I, that's a, that's, I, I think one of the fears that people run into is, oh my gosh, how am I going to retain my clients? Right. In making that move and when we help advisors through that transition, that conversation around fiduciary is really the messaging that we put out there and, helps obviously retain, more of that asset base that they have.

09:46
Jeff Concepcion
Yeah. There's no doubt. There are lots of reasons. I think that people get driven towards independence. I think one of them is really the autonomy. When you sit in the employee type models, 50 to 60 cents on every dollar is being spent on your behalf. In many cases, the advisors don't feel that they get the value don't need, don't want a lot of that infrastructure that's there. I think at our model and independence in general, the goal is to give the advisor as much of the revenue is as can be given to them to decide how they want to spend it in their independent practices. Be it on marketing, on technology, on software, on a world-class staff, on a world-class look and feel to their realistic, whatever that happens to be. They just get more autonomy about how they operate their business, where they spend their dollars and how they drive whatever experience they want to drive to their end clients.

10:33
Charlie Van Derven
Yeah. Love that. Let's switch gears a little bit. We talked about independence. I want to, I want to kind of get into the mindset. If we can have the advisors you work with when they transition now, Stratus wealth partners,

10:43
Jeff Concepcion
It's a scary place, by the way, the minds of some of these folks, I wouldn't want to be there to let non teaching,

10:48
Charlie Van Derven
Well, maybe we'll touch on it softly. Absolutely. 2008, you've been recruiting on that side. Of course, your, your former life prior to starting Stratus wealth partners at Lincoln financial group, was that, was that a kind of a recruiting role as well? I really couldn't get much out of the research that I did there,

11:06
Jeff Concepcion
It was a combination of things I was responsible for in my, I guess, latest run there, the Eastern third of the United States. I had a more national role that was business development driven. It was really strategic alliances and helping advisors grow their business through at that point really MNA. Wasn't what it is today. The frenzy around M and a, it was more strategic alliances with CPA firms and property casualty firms and financial institutions practice management, but there was business development and recruiting tied to that as well.

11:37
Charlie Van Derven
Cool. Stratus wealth partners is north of about 300 advisors now, is that.

11:42
Jeff Concepcion
Something along the, I'm not exactly sure. Yeah. I would say three 50 ish, but I'm not entirely sure.

11:47
Charlie Van Derven
Awesome. The growth is impressive. Jeff, as you're having conversations with advisors who are considering that move to independence, are there any commonalities that you can see? Like, are they really, entrepreneurial in their mindset? Are they, Maverick's want to go take on the world and leave that maybe comfy confines of working at one of the big wirehouses, any commonalities that you see that kind of shape up who the right advisor is coming into this space,

12:15
Jeff Concepcion
It's all of the above. It's everything that you said, right? People are entrepreneurial, but in varying degrees. In some cases they're not entrepreneurial, but they just want the autonomy to run their own business. What we really developed our business model on was the notion that the reason people are leaving employee and wirehouse models in most cases is not because they have a burning desire to be responsible for billing or for HR or for real estate or for compliance or for technology that's not the desire. The desire is to really control their business, receive more of their revenue, invest in their business, the way that they want to invest in it yet when they do that, there are these dozen other items that need to get done. I think the purpose of firms like ours is to allow the advisors to become independent for the reasons that they want to and not be encumbered with many other things that those firms were doing on their behalf.

13:05
Jeff Concepcion
If we can do them at a tiny fraction of the cost. I arguably, and when I say we, I don't mean Stratos, I mean, straddles on firms like us can be such great fiduciaries and stewards of our business models that we can deliver everything they had and more, let them be independent where they want to be and let them be supported where they need to be while still driving the lion's share of the economics to them, to their wallet.

13:27
Charlie Van Derven
Yeah. Awesome. You just serve the industry in a great way. I heard a stat, I can't back this up with any kind of reference, but this is I, so this is hearsay, but I think it's probably not too far off at any one, given time, 10% of advisors on that captive side, that employee model side are engaged in a recruiting type conversation. I heard furthermore that 60% are considering it, but let's stick with the 10% for right now for those folks listening. There anything, any advice that you can give them for, like, let's say the 12 months, maybe six months, maybe three months leading up to making that change, that's going to help them retain more assets in their book of business when they make that transition. Anything that you've seen advisors do well in preparation for that move.

14:19
Jeff Concepcion
Yeah, no, that's a great point. I think it's energy, I mean, I think it's reaching out and touching the clients in a more proactive way than they ever have before solidifying key relationships demonstrating or illustrating value add depending on what type of model they're coming from, whether it's protocol or non protocol, making sure that their clients know how to reach and contact them in a way that doesn't go outside of any contractual obligations or restrictions that they might have this just being really thoughtful. I mean, you can leave in a fire drill and you probably will do perfectly fine, but the level of stress and anxiety and potentially breakage is greater than if it's something that's really thoughtful and well-planned, and you understand what you can and can't do you have legal counsel, there's a tremendous amount of preparation and you exit honoring and the best way you can, the guidelines of the relationship you have with the firm that you're associated with.

15:15
Jeff Concepcion
It's interesting to hear those stats from you. I think. Probably 50. I think your number is probably a good number, 50 or 60% of folks maybe consider it. Right. But there's sort of a knowledge gap. There are a lot of times they don't even know what they don't know about what it means to go independent or what choices out there, how much responsibility do they have to take on where do they land? What are the, and I think for a lot of advisors, it's daunting to understand the a hundred ways that they could plug in all of which are independent, but iterations of independence. So.

15:46
Charlie Van Derven
Well, and of course, I think a lot of people hear the horror stories, right? I mean, there are certainly, if you got to do it right, I think in the, in the six months to 12 months leading up to that transition, you, I mean, you said it right. It is about being focused on key relationships because of course you've got a no contact clause, most advisors, when they're leaving that, that former environment. But, I'll tell ya, I've watched advisors leave a wirehouse, moving to independence and then have to go through mediation against that from right. That's not an E that's a daunting thing to have to do. I believe that those stories are told more, but it's actually the lesser of the experience.

16:28
Jeff Concepcion
110%, 110%. Yep. I agree with you. So most transitions go extraordinarily. Well, most firms are reasonable. If you follow the guidelines, there are a few, and I wouldn't mind calling them out by name that I think are horrific and the way that they treat people and the way that they go after advisors who leave exactly where they're supposed to leave. If they're amazing advisors, you shouldn't be surprised that their clients will seek them out and find them, even if they're not proactive. When you look at the big guys, you've got two that are still protocol Wells and Merrill Lynch, who that have exited the protocol and Morgan Stanley and UBS. You have all kinds of iterations of employee models, non solicits non-competes and then most onerous and not always enforceable nonacceptance right. You don't solicit the client, you're not competing, but they find you and you still can't take, so again, every state looks at these things differently as well.

17:20
Jeff Concepcion
There's a lot of complexity there and really good thought and analysis prior to an exit, just you can't control everything, but generally speaking that will result in better outcomes.

17:31
Charlie Van Derven
Yeah. Of course, amongst many other things, Stratus wealth partners is there to help with the details around a transition like that, perhaps. I don't, again, I don't want to offer services that you guys don't offer jump, but perhaps reviewing that agreement that you have, I don't know if that's a, if that's part of what the offering is, but making that transition as smooth as possible. It's something you guys have done hundreds of times,

17:54
Jeff Concepcion
Correct? Yeah. We will look at the guy, we have to be careful in terms of practicing law, but because I know all the contracts so well, and my business partner, Charles Shapiro, who runs a business development for us know, those knows those agreements. Well, oftentimes he and his team, and I will look at them and just to give general feedback, but we always not only suggest, but almost mandate or require that they get counseled. We would never want someone to act on our recommendation. There's so many good firms out there that specialize in reviewing these contracts. They actually know what the contract say. They know how the firms will act and what they do and can kind of hold the hand of these teams to make sure they're leaving in a thoughtful and respectful way.

18:32
Charlie Van Derven
Yeah. Very cool. I want to learn more about Stratus before we part today, talk to me about like, missions and values. Jeff, what if an advisor's transitioning and Stratasys is a good option for them, what's what are they, what can they expect as a cultural experience? Tell me about how the, how the firm works, missions, values, things along those lines.

18:52
Jeff Concepcion
Yeah. I mean, I think that one of the ways I would describe as a culturally, as a gentle shop, I think we built a lot of close relationships with our folks internally and externally people. First, everything sort of solves itself. If you're, if you're good to people, if you're honorable, if you do what you say you're going to do, if you do more than you say, you're going to do you end up with raving fans. A lot of our growth has come from folks who joined us and introduced us to their friends and saying, Hey, this is an incredible home and independence with a soft landing in such a way that focusing on what matters by client experience and growth. I would say culturally, it's just, it's a, I believe, I hope that the goal is it's a gentle shop where we just treat people.

19:29
Jeff Concepcion
Well, if you ask me what a calling card is, I would say there are a couple of things. One is depth when people who run similar business models, talk about technology. They oftentimes will have one or two or three or four people in technology. I think we have 13 or 14 folks, a transition team. It's not someone to open accounts. It's a team of five or six dedicated folks of flexes up to a dozen, all cross trained so that when a team comes over, there's a lot of bandwidth there to make sure our accounts move and move quickly. In that transition process, we're talking to the advisors, typically six to eight weeks in advance. Every week there's a checklist and responsibilities and Salesforce tasks driven to places in and outside of our organization for follow-up to make sure that the day the advisor leaves, everything is as buttoned up as can be.

20:15
Jeff Concepcion
It's not a perfect process, but it's a pretty darn good one. I would say another calling card, Carter, unique. This is entrepreneurship and ownership. We want to teach people how to move from and sometimes you'd be shocked. These are advisors with 200 million, 500 million, 2 billion in assets. They're still, oftentimes not always acting more as an advisor than they are as a CEO, right? Because to be a CEO, you're just, you're, you have different responsibilities, tasks, and visions relative to what you're growing and building. That evolution from an advisor to a CEO is super important to us. And my last comment is inorganic growth. I think something we do exceptionally well is M and a, and it's not just at the enterprise level where we're investing two thirds, three quarters of our activity on the MNA front, or helping our partners with sub acquisitions tuck-in businesses.

21:07
Jeff Concepcion
We help them find them. We help them articulate and we help them win and stand out as just a, a really quality, potential option for someone looking to retire. Those are maybe a few areas that I would say, I feel confident that we've, we're figuring that we're working hard to figure things out.

21:22
Charlie Van Derven
Well, and I can speak to that. We've I've actually worked with Stratus in two different capacities, right? I'm going back when I was with FMG for a few years, my communication was mostly Charles and Jim Lupica at that time. Now my communication, most of our firm's communication runs with, your director of marketing, Kevin Lovington, the amount of support that we get, even as like an outside vendor, providing some services is pretty impressive. In fact, it's not like we don't have that with every, with every relationship that we've got. I can speak to that from our perspective. You also said something that was actually on my list to ask you about. So it's a lot ball for me. Thank you for that. One of the unique things about this industry and there's many of them, you've got a financial advisor that comes in no matter how they enter the industry, oftentimes wirehouse, right?

22:13
Charlie Van Derven
Oftentimes in that employee model, they're a successful advisor. They survived the first few years, kudos to that. As they grow assets, they grow team right. As they grow team, their role as an advisor has to change to leadership, right? It has to change to CEO. There's not a lot, many advisors can't handle that transition. Right. I do a lot of performance coaching. Oftentimes the coaching is around that transition from sole proprietor or, individual advisor to now, we've got a CA now we've got a junior advisor. Now we've got back office support staff, whatever that is. I mean, that's really a lot of what Stratus offers is making sure that's successful advisor doesn't lose their footing when they go from advisor to CEO.

23:01
Jeff Concepcion
A hundred percent. We've done that, I think done a reasonably well, reasonably, a good job through Charles and his team, but going back a handful of years ago, thinking we needed something more than that. We started a practice management and consulting business internally that had one person. Now, there are six people there. What's very interesting is that some of that is business development and marketing driven for help trying to help the advisors have a plan. Some of it is vision-based relative to a blueprint. What does your organization look like today? You have five people associated. What does it need to look like to go where you want to go? Maybe it's 10 folks. What are those roles? What are the skill sets? We have an HR capacity where we'll actually, do job postings for them and screen so that they get 70 resumes coming in.

23:42
Jeff Concepcion
We eliminate everything and all the noise, and now they get two or three really qualified so that the capacity to help advisors know where they want to be, and then actually play a role in helping them to get there has come from a lot of the practice management and HR stuff. The consulting that's taking place today as well.

23:59
Charlie Van Derven
Very cool. Listen, Jeff Concepcion. I love the wisdom, man. I thank you so much for sharing it with our audience. If we've got any listeners, Jeff that are really kind of sitting on the fence, looking for options to go independent. I got to imagine bok having a conversation with them tomorrow,

24:14
Jeff Concepcion
I'd be thrilled to, there's never a conversation by the way, this comes from, and I'll just share this with you. It's kind of funny from LinkedIn or from all these sources. Somebody listens to the podcast, they call and I'll talk to anybody. There's no screening process about assets or anything else. I remember once I talked to somebody and I can't remember the number that they put forth, but whatever the case was, it sounded like it was X hundred million in assets. Instead it was X million, wasn't 700 million in assets. It was 7 million in assets. We had a great conversation. I think I shared, some wisdom and these people come back over time when you plant seeds and you do good things. It's shocking to me, years later, someone says, Hey, we had a conversation. You said some stuff that was impactful and helpful.

24:55
Jeff Concepcion
If sometimes you get a conversation like that. I had one recently from a gentleman outside of the country that was running a two and a half billion dollar shop. We had an incredible conversation we'll likely end up meeting. I think you have to be open if you're passionate and you love the industry, you love sharing ideas. To your point, we welcome a chance to share our thoughts and guidance with anyone who's interested in feedback. So.

25:17
Charlie Van Derven
I love that and I can echo that. Many of our clients are people that I met four years ago, had a great conversation with hopefully offering some value. In my experience, and a couple of years ago by you almost forget that ever happened until they hit you up on email or voicemail or LinkedIn and oh, yeah. Right. So, so those small conversations, certainly planting seeds, rightly to bigger opportunities in the future.

25:40
Jeff Concepcion
No doubt, no doubt.

25:42
Charlie Van Derven
Jeff. What's a what's. If someone wants to reach out to you, what's your preferred route of communication. You want to give email or send them to LinkedIn, or just check out the website?

25:49
Jeff Concepcion
I'd say my cell phone, frankly. It's because I'm on the road a lot. I don't know how, if you want to post that or how I can PR.

25:56
Charlie Van Derven
I sure can. You can give it if you want to. I get out, but I know a lot of people are scared to do that. So,

26:01
Jeff Concepcion
No, no, no. It's a 2 1 6 4 6, 9, 7 0 7. I think through LinkedIn or email or otherwise, feel free to reach out and we're happy to chat. And I enjoyed the conversation. Thank you for inviting me.

26:13
Charlie Van Derven
Oh, Jeff. Absolutely. My pleasure. I thank you for, the partnership that we have and some of the businesses that we do together and taking time out of your busy day to spend some time with us, you've got a ton of wisdom and I appreciate having the ability to tap into that.

26:25
Jeff Concepcion
Thank you, buddy. Great to be here.

26:27
Charlie Van Derven
Thanks Jeff. So Jeff, I'm just going to say.