State of the Industry Podcast: “Behind the scenes: Doing what’s best for my clients” – Audio Transcript

Scott: Welcome to Allworth’s “State of the Industry”. We’re here with Jeff DeBoer today. Jeff joined Allworth last year. We’re gonna hear his journey and why he chose to essentially merge his RAA with Allworth’s RAA. So, Jeff, thanks for taking some time out of your…I would say super busy but now that you’re a partner with Allworth, I’m sure it’s hardly working.

Jeffrey: I have all kinds of time on my hands now.

Scott: In all seriousness, thanks though.

Jeffrey: Thank you.

Scott: So, what brought you to the point of deciding to join forces with us?

Jeffrey: Probably I think one of the key forces for me was I had a very large concern for our clients of what would happen if something happened to me. So about three years ago, I was out sick for a little while. And then, of course, this last year during COVID, you know, it all… This had always been a priority but it moved to the top of the list, because, number one, a commitment I’ve always had to our clients is I’m gonna make sure you’re gonna be in great shape no matter what.

Well, the problem with that is what if something happens to me, whether I get sick, I have an accident, or even worse. So, about a little over two and a half years ago, I started working on a succession plan, and I really did it differently than I think a lot of advisors have done. I actually hired a firm to assist me.

Scott: On succession planning?

Jeffrey: On succession planning, yeah.

Scott: So, “This is my problem. Please help me solve it.”

Jeffrey: Exactly. Exactly. And we looked at every type of option. I looked at buying a firm. I looked at merging with similar type firms. We looked at hiring a number of people that would take way, way too long.

Scott: And when you say you looked at this, did you have conversations with the other people? Did you actively pursue those and then said, “This isn’t what I want?”

Jeffrey: I had over 25 conversations, yes. And so, we eliminated a lot of them over time and narrowed down. A little over a year ago, we were actually real close with one firm, but there were things that came up and I realized… I was looking for the perfect fit. And in fact, some people told me that maybe my expectations were too high and that I never go with that. I think it’s important to have high expectations and do everything we can to meet those expectations, especially for our clients. You know, what we do for them is so critical. And so, my objective was to find a firm, a larger firm, that was just like me. And so, I’m looking all over the country, you know, and here the right answer is literally right in my own backyard.

Scott: Our offices were…

Jeffrey: Exactly. We’re literally…

Scott: [crosstalk 00:02:57] in Sacramento region.

Jeffrey: In fact, it’s funny because the local office where I am, I started my practice back in 2003 up on the third floor in that same exact building. So now, I’m on the first floor. I tell people now that I am older, I can’t take the stairs to the third floor so I’m on the first floor.

Scott: How old are you today?

Jeffrey: I am 57.

Scott: Fifty-seven? I’m 55, so…

Jeffrey: Okay, yeah. We’re close. A lot…

Scott: You don’t look a day beyond 56, by the way.

Jeffrey: I actually started going backwards at age 50. So, I’m 43.

Scott: Okay. Yeah. And what was the size of your firm when you merged in with Allworth?

Jeffrey: Yeah, so we had 160 households and $180 million in assets that we were managing.

Scott: And give me your background on what was your career journey. How did you end up going independent and having your own practice and all that?

Jeffrey: It’s interesting because I actually started in the financial services industry back in college, worked on the banking side. Actually was an insurance agent for a little while and…

Scott: With one of their… That’s where I started, Lincoln National.

Jeffrey: Okay, yes. I started at Prudential.

Scott: Okay.

Jeffrey: So, I was…

Scott: Project 100?

Jeffrey: Yeah. I was as broke as can be and working my tail off all the time, but I actually ended up in the bank channel. I was an investment advisor in a bank side and then moved up through the ranks. Ended up being a senior VP of a firm managing investment programs for banks. So, I was on the road all the time. I had over 200 advisors working for me at one time. And it got to…

Scott: Oh, wow.

Jeffrey: Yeah. I mean, I really loved a lot what I was doing, but what I found is, you know, with the firms that we were working with, is I struggled because I really didn’t feel that a lot of these investment programs were truly doing…they weren’t putting the client first.

Scott: Well, just the structure of them was…

Jeffrey: Just the structure, yeah.

Scott: You’ve got brokers changing everything every year.

Jeffrey: Absolutely. So, my objective, and I knew at some point that I…

Scott: So, you were no longer personal production? I guess that’s what they called it back then.

Jeffrey: No, I hadn’t been in personal production.

Scott: Maybe they still call it personal production. I don’t know.

Jeffrey: Yeah, yeah. I hadn’t been, you know, an advisor. I was in management for years. And I decided back in 2003 that I wanted to start my own firm. And literally, started from scratch with zero clients. I had an executive suite and…

Scott: And how old were you at that time?

Jeffrey: [crosstalk 00:05:34] yeah, almost 20 years ago. Yeah, so late 30s.

Scott: Yeah.

Jeffrey: Yeah. And so built it from scratch. I did a lot of the things that…

Scott: It’s never easy, is it?

Jeffrey: No, not at all. I mean, I was doing…

Scott: I mean, I don’t know anyone who’s had an easy road.

Jeffrey: I was doing, you know, just a ton of education. And I mean, it was funny because back then, I sort of followed what Allworth was doing very closely and tried to mirror some of it like…because…

Scott: Yeah, we were known as Hanson McClain back then.

Jeffrey: Hanson McClain back then, yeah. So, I did a lot of educational workshops. We were doing dinners and things back then and just started to build the practice and take great care of people. And very quickly, most of our new client relationships came to us from referrals from our existing clients. I mean, we believe very strongly in education and that’s why…I mean, that was a big part of why I thought this was such a great fit too.

Scott: Yeah, so build the practice. About two and a half years ago you said you started this process. So, you’re roughly 55.

Jeffrey: Correct, yeah. Yep.

Scott: I would imagine…I mean, the firm was quite profitable at that point, right?

Jeffrey: Yeah, we were. But it reached a level where my stress level…and you’ve probably heard this so many times. My stress level was so high because I, like so many other advisors, you know, I wanted to be a financial planner and I wanted to take phenomenal care of our clients. And I think we’ve done a really good job doing that.

Scott: That’s what makes a good planner, right?

Jeffrey: Absolutely. But what happens is as a business owner, the needs of the business continue to grow and grow and grow. So, I found in some weeks I was spending over 50% of my time managing the business and everything that goes along with that and not as much time with clients that they deserve. And that’s really where I saw I need to make a change.

Scott: Yeah, and it was either spend more time managing the business.

Jeffrey: Absolutely.

Scott: Like, buying a smaller firm or something like you’re doing, right?

Jeffrey: Exactly, exactly, yeah.

Scott: And actually, it’s not a bad opportunity for someone who wants to, you know, really push it for a while.

Jeffrey: Right, right.

Scott: I think this is true. I had coffee with a young man. He was maybe 30. He was a wholesaler for somebody then bought a small practice, and we were having coffee. He was kinda just picking my brain and wanted some advice and I said, “If I were 30 with a small practice, I would buy another small practice.”

Jeffrey: Absolutely, absolutely, yeah.

Scott: I mean, the majority of advisors have less than $100 million, so I think there’s actually an opportunity…

Jeffrey: Oh, I agree.

Scott: …in a lot of those smaller practices and it comes with an advisor and everything. But that didn’t sound appealing to you, I guess?

Jeffrey: No. You know, and I wanted to really do my due diligence and weigh all the pros and cons of all the different options because my goal is I wanna be able to sit in front of our clients and look them straight in the eye and tell them no ifs, ands, or buts this is by far the best thing that we can do to ensure that you’re well taken care of and your family and your kids are well taken care of for the rest of your life.

Scott: And you joined us middle…

Jeffrey: Yeah, October 1st.

Scott: October, 2021, okay.

Jeffrey: Right, yeah.

Scott: I thought it was earlier in the year but just October. And when did we start having conversations?

Jeffrey: It was during the summer, June, July timeframe.

Scott: Okay. So that was going pretty quick.

Jeffrey: Yeah. So, it really did. And I mean, it was…

Scott: And you knew us.

Jeffrey: I did, yeah. I knew, and it might’ve been a little bit before that. At that point, we had narrowed down to sort of the top three options and then the top two options, which, obviously, Allworth was one.

Scott: Were we the high bidder?

Jeffrey: Nope. You were not.

Scott: By the way, I didn’t know the answer to that question.

Jeffrey: No, you didn’t. I just threw it out right now.

Jeffrey: No, you were not. And I’ve shared this story a little bit with you before, but I had a personal family situation that we were going through at the time, and I literally made the decision at 3:00 in the morning when I was just, you know, sitting there thinking and I said, “What firm will truly, truly help me take the best care of our clients and be there no matter what?” And I thought back to many conversations that I had with you and that I had with Pat and it was a no-brainer. I actually had a meeting scheduled the next day, another due diligence meeting with the other firm, and I called them and just let them know sort of what was going through my mind and made the decision that day, and it was by far the best decision I could’ve ever made.

Scott: I actually remember you telling me that night. We had already put you down as a yes before that. I think Pat said, “Oh, he’s a…” Yeah.

Jeffrey: He’s a no-brainer.

Scott: Jeff’s old, you know.

Jeffrey: That’s funny.

Scott: I imagine we were in the ballpark on pricewise though.

Jeffrey: Yes, yeah, yeah.

Scott: It’s interesting because most advisors, it’s really kind of the same sort of journey. They wanna make sure their clients are taken care of. They wanna make sure that they’ve got some autonomy in their life and whatever’s going on in their life. You had a family issue. You wanted to make sure you had some control of your time so you can deal with those things. And then, of course, value for the businesses.

Jeffrey: Absolutely. And also taking care of the team was really important for me too. And they’ve been really… In fact, they’re…

Scott: Yeah, let’s talk about it because it doesn’t always work out for team members, right? We’re a growing organization.

Jeffrey: Right.

Scott: So, I think we’ve got 60-some odd open requests for employees this year. And so, a lot of those we’ll find when our firms had joined forces. And for us, there’s good staff. We’d love to keep them. We’re not, like, growing and [crosstalk 00:11:16] staff. So, we always wanna keep staff. And our experience has been most of the time it works that well. Oftentimes, people have greater responsibilities doing…they have a leadership role in their organization. But sometimes, people just…they want to work for a small company and they don’t like being part of a big company.

Jeffrey: Right, yeah.

Scott: What’s it like with you?

Jeffrey: You know, I found I had…I actually just had one of our team members that just retired, literally, just retiring this week. But one of my primary team members, who does a phenomenal job, is absolutely loving it, you know. One of the first things, you know… What I think has worked so well is we still feel like a small firm and we’re still acting like a small firm, but we have all of this support of a large firm, you know. So instead of, you know… She’s not on her own anymore. When there are questions, she needs help, she has a whole group of people now that she can go to. And, you know, one of the other, I think, great benefits are truly the benefits as well, you know. Being a small firm, we couldn’t do nearly what a large firm…so they were…so the team was as excited as can be about having all these benefits too. It was a good thing, yeah. Absolutely. And so was I, by the way.

Scott: And they’ve all stuck around except for the one who just retired?

Jeffrey: That’s right. That’s correct, yeah. Yeah.

Scott: And were you broker-dealer affiliated or a pure RAA?

Jeffrey: I had, like, about 3% broker-dealer affiliation. Yeah, so almost all RAA.

Scott: And when you transferred over, converted over, was it just a simple matter of just changing on the ADV and clients say, “Fine, go ahead and have a new advisor.”

Jeffrey: Yeah, yeah. No, so we did have…

Scott: Yeah. Schwab or TD or one of those?

Jeffrey: Yeah. So we were with NFS and we did have to do a full repaper. Thankfully, we…

Scott: And ACAD everything over.

Jeffrey: We had to ACAD everything over. So, I won’t say it was the smoothest process in the world, but it actually went much better than I thought it might go. So, we did, you know, just between our team and the team at Allworth…I mean, everyone really banded together so well and we did… It’s all about the work that you do upfront in preparation. So, you know, on closing day, all the DocuSigns went out and we had webinars with clients. I had meetings with literally every client either on Zoom or phone, you know, in the month before the merger. And in under two months, we had literally all but one client and all of their assets. I think we had over 100% assets because we had some additions. They were with Allworth in two months, yeah. Yeah, so it was just a great team effort, a great process.

Scott: And only one client didn’t wanna go along?

Jeffrey: One client, yeah. I liked…

Scott: What was his or her excuse?

Jeffrey: I thought you were gonna say what’s her name.

Scott: No, no, no. [crosstalk 00:14:10] I’m not gonna do that.

Jeffrey: No, she actually lives…yeah, she lives out of town and… oh, my God. She sent me the most wonderful letter in the world. And she said, “I just want you to know it has nothing to do with you, but I’m getting older and, you know, I like to come and see you in person, and I decided to work with an advisor that’s right down the street from me.”

Scott: Yeah, she was already considering it.

Jeffrey: Yeah. She was already considering it, so yeah.

Scott: Our experience has been it’s less than 1% don’t come over. It’s usually a small handful that have been…and it’s typically someone who’s all…they probably would’ve left in the last or next year so anyway. It was just kind of the final straw, yeah.

Jeffrey: I mean, for clients, you know, their number one question, they wanna make sure that I’m not going anywhere. Their two questions are, “Are you leaving? Are you gonna be our advisor? And will my fee change?” So yes, I’m gonna be your advisor. No, your fee’s not changing. And in fact, we’re going to be able to do so much more for you for that advisory fee than we ever have before.

Scott: And so, here we are now a few months down the road, four months down the road. What has gone better than expected, number one? And then number two, what’s an area of maybe disappointment or friction or something that hasn’t met your expectations?

Jeffrey: I think what’s gone better than expected is nothing is ever going to go perfect. And any time you go through major changes like this, you expect hiccups. And what I found is as we experience those hiccups and we bring the right people in place to help us fix some of these hiccups, everyone was so eager and just so positive and really wonderful to work with to ensure that this went as smoothly as possible. One of the other things I think was so beneficial is as we went through the merger, we had planning meetings every single week. Once a month we had feedback meetings, which we’re still having today, and the objective is to really help…it’s making sure that we get better. Absolutely.

Scott: You don’t just acknowledge and ignore?

Jeffrey: No, not at all. So, I mean, and that’s… It’s actually really exciting because there are also a lot of ideas that partners bring to the table, and we’ve seen this just more recently. I know a couple that we have where we’re opening an office in a retirement community.

Scott: Yeah, you’re moving your office?

Jeffrey: Yeah, we’re moving our office to smackdab in the middle of a Sun City Retirement Community.

Scott: Oh, really?

Jeffrey: Yes. And so, it’s pretty exciting because there’s just…we have probably 60% of our clients that live there now. The potential is huge there too. But we’re actually working…we’re all working together to hopefully make this a model for other retirement communities across the country as well.

I just love that synergy because these are types of things that I would have to have conversations with myself and talk to myself about what I would like to do and then have to try to implement it myself too. So now, we just have…you know, between all of us together, it’s exciting because I think we can do such a better job for our clients who we have. I was sharing this with a client that lives in that community just the other day and they said, “Oh, my gosh, Jeff. We can bring so many people to come and see you now because they’re all gonna come in their golf carts.” Yeah, it’s really…

Scott: Are there many competitors in there too? A. G. Edwards have an office or…?

Jeffrey: No one like us. It’s really…

Scott: Do A. G. Edwards still exist?

Jeffrey: No, Edward Jones. Edward Jones.

Scott: It’s been 15 years or something.

Jeffrey: I think they’re Wells Fargo or something though, yeah.

Scott: Yeah.

Jeffrey: Yeah, so there’s no one that’s completely independent and comprehensive like we are. So, it’s really exciting because in the community everyone knows the Allworth name, and the DeBoer name is well-known as well. So, we’re really gonna cobrand this together just to take great care of people.

Scott: Shake the trees a bit, right?

Jeffrey: Yeah, yeah. So, you know, across the country, there’s so many. I mean, they need help and they need independent advice too. So, the opportunities are big.

Scott: So, one of the things at Allworth… We have what we call our partners’ council and this is comprised of other people that have merged in with us, partners. You now are a shareholder and partner in the organization. What’s your experience been like with the partners’ council and what are your hopes and expectations going forward? What do you think that’s gonna do for, one, giving you an outlet and some influence and, two, how do you think it’s gonna impact the organization?

Jeffrey: It was interesting. You might remember this. My very first week I was fortunate in the first partners’ council meeting where everyone got together, everything was Zoom before, was in Dallas, and it was literally my very first [crosstalk 00:19:19].

Scott: That’s when I didn’t realize how funny you were. You were like a comedian.

Jeffrey: So, my…

Scott: You had me in stitches.

Jeffrey: Thank goodness I’m still here. I felt very blessed that it worked out that way because I had a chance to really spend some good quality time with everyone and really learn all about Allworth and the vision and what’s so important. And I walked away really realizing how closely our two firms really mesh together. You know, obviously, Allworth is a huge version of what we are. But I walked away just meeting some great people, building some great relationships. But I think the most important thing is I walked away realizing that we all have the same goal and the same objective as well. Things are going to happen but we just all work together to get it fixed. And it’s nice just not feeling like I’m on my own anymore.

Scott: And do you feel that the partners’ council, you’re gonna be able to add some additional value to the organization through that and…?

Jeffrey: Absolutely, yeah. Especially with the current initiative that we’re working on. And I’m seeing just I think a lot of really positive changes within the partner council in just the short time that I’ve been with Allworth and I commend…

Scott: Yeah, well, I led it for a while, and I’m thinking, “It’s probably the best if someone other than me leads it.”

Jeffrey: Okay, yeah.

Scott: And so, now it’s led by someone who’s joined similar to you.

Jeffrey: Yeah, someone who’s a partner. And I think one of the things that I loved is that Allworth truly realizes that, you know, so many of the partners…I think all the partners that have joined, you know, over the last couple of years all have some great strengths, but they’re all a little bit different as well. So, we’re already seeing this as a lot of these various strengths… It’s, like, instead of just saying, “Yeah, let’s just do it the Allworth way. The Allworth way is the best.” It’s like, “Well, wait a minute. What in some of these areas what a partner is doing might be really great as well.” So, we’re already starting to see that. And as you mentioned, there’s a partner that’s leading that charge now. And I’m seeing a lot of good things ahead. I think it’s in the beginning stages. But, yeah, I think it’s pretty powerful.

Scott: I’ve got a lot of hope because what… Like, I view you as my client. I don’t really have any regular clients any longer. My objective is that this next chapter of your life is one of the most rewarding professionally. And if we can make it that way, then the organization’s gonna… And part of that is you’re obviously a bit entrepreneurial. You left the big company, went and started your own, worked your tail off to try to convince people to give their life savings to this little one-man shop, right?

Jeffrey: Right, right, exactly. I know.

Scott: And so, we don’t wanna squash that, and you don’t wanna have that squashed either, right? There are some juices there [crosstalk 00:22:22]

Jeffrey: Absolutely. Absolutely. And that’s really where I see the future with Allworth because it really is…I was looking for the best of both worlds. I wasn’t sure that I was going to be able to find it but I did find it. And like I said, I really didn’t have to…I could’ve been here a year and a half ago, you know, because I was looking all over the place instead of my own backyard.

Scott: Yeah, I think that was probably a prudent journey to go through.

Jeffrey: Absolutely. I feel really good about going through that due diligence journey. Absolutely.

Scott: As I think about it, quite a few of the firms that have joined us went through a long process. And I know when we took on private equity, we had talked to a number of different…we were at a point where we were kinda…Pat McClain and I were kinda stuck. We were a little over $2 billion, but we were at that point where we would have to invest quite a bit to take us to the next level. And part of it is we just didn’t have quite the same risk tolerance we did when we were younger.

Jeffrey: Sure, absolutely. Absolutely.

Scott: I mean, we don’t want our lifestyles to go backwards at this point. And so, we had talked to a number of different firms, and similar to you, like, “Do we sell into this? Do we do all these different things?” And we ended up finding a private equity partner that we really, really liked, and it was phenomenal to run with them. But I think it makes sense for people to have as many conversations as possible because then you can kinda say… I mean, like, this is… My wife and I, we both had dated a few other people and I, like, must admit that a handful of girls that I dated before my wife, like, I kinda, like…this is a non-starter. Oh, I need this, right? You know?

Jeffrey: I hope you lost that phonebook.

Scott: I don’t know why I brought that up. I hope she doesn’t look [crosstalk 00:24:08]. But even kind of when you were starting off earlier talking about looking for the perfect firm, I did kinda think of that. I was like, “I know those guys who are 55 years old and have never been married because they haven’t found the right woman.” I’m thinking…

Jeffrey: Yeah. Good luck, right. Good luck.

Scott: I’m sure there’s thousands that went by that would’ve been just fine.

Jeffrey: Yeah, absolutely. That’s great.

Scott: Anyway, I greatly appreciate you taking some time today, Jeff.

Jeffrey: Oh, thank you so much, Scott. Appreciate it.

Scott: And if you wanna learn more about Allworth and maybe hear some stories of some other people that have joined us, go to our website, allworthpartners.com, allworthpartners.com. It is a specially designed website just for other advisors that are considering making a similar kind of move in their life. So, we’ll see you next time.

Man: This podcast has been brought to you by Allworth Financial, a registered investment advisory firm with the Securities and Exchange Commission.