Rick Pignone was in a Stop & Shop grocery store when he got a call over a decade ago from Jim Gold, who had been his manager at Smith Barney for many years.
Gold was aiming to leave Morgan Stanley, which had bought Smith Barney during the financial crisis, and he was planning to form an independent group.
"He had me at hello," Pignone said at a media event Tuesday discussing the 10-year anniversary of Steward Partners Global Advisory, the hybrid registered investment advisor he founded in 2013 with Gold and other veteran Smith Barney advisors.
Under Morgan Stanley's ownership of his former firm, Pignone said, he had felt like he was "just a number" and came home "miserable" every day. Joining the new group was a risk, stepping into the unknown at a time when fewer options existed for breakaway advisors from the wirehouses, but he trusted his relationship with Gold.
Today, Pignone said, his clients say he's become more "accessible" to them than he was in the past. While it once took him three and a half weeks to get staff at Morgan Stanley to discuss a product with a client, at Raymond James that process now takes only half a day, he said. The firm
Gold and Pignone spoke at the event on a panel that included other founding members of the firm: advisors and partners Ted Schwab and Chris Reaney, and President and Chief Operating Officer Hy Saporta. In a room on the second floor of the Loews Regency New York, the five firm leaders reflected on Steward's path to reaching around $30 billion of assets under management in only 10 years — an achievement that they had originally planned to hit in 30 years. They also discussed their growth plans, which include getting more active in traditional M&A, said Gold, the firm's CEO.
"It's gone from a dog-eat-dog environment … to a culture of shared prosperity," Schwab said of his experience moving from Morgan Stanley to Steward Partners. He acknowledged that the firm had experienced issues with its technology in the early years, but said he felt the culture of the firm was intimate and family-like, citing the support he received from colleagues when his son was nearly killed in a car crash.
The firm prides itself on offering equity as compensation, which contributes to feelings of unity, Gold said. While
"Equity with parity" is what Gold calls his firm's version of equity. "There's equity like in 'Animal Farm,'" he said, referencing the George Orwell novel, "where not everyone is equal." In other firms, he said, there are different classes of shares and different privileges that come with them.
The firm is facing a
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Asked by a reporter at the event if he was concerned about the dilution of equity value for each shareholder as the firm grew, Gold said the math of recruiting meant that the overall value of the firm would still grow faster than the dilution when a new advisor joined with their book of business. "Our goal is to build a $1 billion revenue firm," he said, adding that he plans to quadruple the number of advisors from around 200 today to 800.
"The new trend we're seeing is breakaway advisors wanting to sell their business," Gold said, noting that at the same time, valuation of smaller firms — those under $10 billion of AUM — had gone down. In the higher interest rate environment, smaller buyers are finding it harder to finance a purchase, which creates an opening for his firm. The firm is seeking targets that show "fiscal discipline" and are holistic planning-based, Gold said, and it has two deals under contract at the moment.
Steward is also rolling out a new tool to allow advisors to manage clients' 401(k) portfolios, Gold said, which would double advisors' assets without having to recruit new advisors or find new clients. The "average client" holds as much in their 401(k) as in their brokerage account, he said.
