State of the Industry Podcast: “There was Allworth and then everyone else.” – Audio Transcript

Scott: Well, hi, everyone. Scott Hanson here. Welcome to our “State of the Industry Podcast,” where we talk about a variety of topics going on in the industry. Today we’ve got someone who became part of Allworth and wanna hear a bit more of his story. Matt Keller is with us. Matt, thanks for taking some time to join us.

Matt: Thank you, Scott.

Scott: You’re out of New Mexico, right? Albuquerque.

Matt: Yes, sir. Albuquerque, New Mexico.

Scott: All right. And I know you’ve been on this podcast in the past, but just give us a brief kind of story of how you guys became part of Allworth. And when was that, first of all? What day did we close our transaction?

Matt: June 1st of 2022. So, we’re almost eight months into it now.

Scott: Okay. Yeah, about eight months.

Matt: And our story as far as how we arrived where we are now is that I have two partners, one who’s now 60 and one who’s in his early 40s, I’m in my early 50s. And we bought out the founder of our company back in 2018. And things were going great, growing the business, managed through COVID. But as we kind of started getting midway through 2021, we were looking at how we could accomplish a couple of different goals, one being a great succession plan for our older partner who’s now 60, like I mentioned. And two, how could we build a firm or continue to grow at the rate we had been growing and build out our employee base sufficiently?

In 2021, we had just lost a great employee who moved out of New Mexico for a family health emergency. And we were having difficulty locating that next, you know, junior advisor who could come on board. And we also have a couple of employees who are very close to retirement. So, it dawned on my partners and me that we needed to begin exploring outside partnerships and thankfully, Allworth came calling.

Scott: Yeah. Well, and you had talked to a variety of firms I know. Like, what was appealing about the kind of full integration model of Allworth as opposed to a firm that’s, you know, less integration and more of an aggregator?

Matt: So, it was really important to us that not only would we find a firm that had a similar investment philosophy as we did, but since we place a great emphasis on what we called then advanced planning, basically all financial matters that aren’t just investment-related, so things like taxes, the estate planning, the insurance, the retirement planning, we placed a lot of emphasis on those matters, so we needed to find a firm that also had a planning-first mentality. And what we found as we explored out there in the industry that was very difficult to find someone like Allworth because it’s just not there at the scale that you need it.

Scott: So, you went through the process, talked to firms, decided on Allworth, went through a process of due diligence, and coming up with a definitive agreement and contract, right, the purchase contract. Got that signed, then went to the process of getting the business closed, transitioning clients. How was that whole experience, the client transition?

Matt: You know…

Scott: You’re laughing.

Matt: What really was I think distinctive, if I can take your question and break it up into parts, so what really stood out to my partners and me is that with Allworth, the process from beginning conversations to getting to a letter of intent was really, I think, speedy. And I attribute that now looking back to the fact that the Allworth executive team has done a lot of homework upfront over the years, and they’ve identified who are those candidate firms that are gonna be a strong fit.

Scott: Yeah, that’s right.

Matt: So, you know, once you identified my former firm as a candidate, I found that when we’d bring up questions or we had negotiation points that needed to get resolved, that it was a very quick response and it was a very confident response from Allworth. And I think that, again, looking backwards and seeing what I understand now, I think that you and Pat have really over the years developed a very strong management team that knows, you know, what their respective lanes are and they can make decisions. And so I’m very grateful for how quickly that whole process, you know, went because we actually had been talking to another firm and it became apparent to us that this decision-making is very slow and it was great contrast to what we experienced with Allworth.

And furthermore, was very, I think, transparent in that the offer, when it came time to the offer, it was simple and easy to understand, which again, contrast with some of the other offers that we had entertained. We understood where the incentives lie in the offer that was presented. Furthermore, like, as Allworth introduced us to the various business groups with whom we’d be working, the trading team, investment team, operations, the financial planning and retirement planning teams, insurance, tax, estate planning, all these different groups were able to articulate what they do and how they do it quite clearly, which, again, showed to me that there’s a strategy that the Allworth team as a whole understands and each group understands what they’re doing really well. So, that stood out.

But then I think finally, like, what really, really impressed me and my partners was that there was an eagerness among the acquisition team that we were talking to to introduce us to partners that had recently merged in or had been there a few years. And when we spoke with these advisors and partners, it was, you know, conversation just between us. There was no other Allworth person present, and there was a genuine, authentic, I’d say happiness. And you could see the excitement that exuded, you know, from those conversations. And that again, based upon some other conversations we had with other firms, stood out quite clearly.

Scott: And so, you joined June of last year. Did all of your clients come over? Like, what percent transitioned over?

Matt: You bet. So, like, we signed the definitive agreement in early April, I think it was April 4th. And we then began calling our clients. And I had an advisor that had been a mentor of mine for about 15 years who happened to have joined Allworth in 2020 based in the Tucson office. And I started calling him as soon as we started conversations with Allworth. And he basically assured me that what we were hearing was, in fact, what was, you know, the truth. And he had assured me too that, you know, when you start calling clients, don’t worry. They’re just gonna ask you if you’re gonna be, you know, still their advisor. And when they hear, yes, they’ll come over.

Scott: That’s all we care about. Yeah, that’s right.

Matt: Exactly. And I mean, it was a big leap of faith. I’d never done that before. But sure enough, we I think had 99.3% of our clients move over.

Scott: Wow. That’s huge. And so, the first few months have integrating, it’s never fun, right? There’s a lot of extra work, frankly, having to call these clients, transfer. Did we have to change custodians, or was that just as simple?

Matt: We did not, fortunately.

Scott: Yeah, makes it a lot easier.

Matt: Yeah, we did not change custodians.

Scott: It’s always a bit more left when somebody’s, like, a hybrid advisor and they’ve got an independent broker-dealer and everything needs to get repaid but as opposed to someone’s already with one of the major custodians, then it’s just a simple form for the client to sign. And so, going through that period of transition. How is your life different today in 2023 than it was a year ago?

Matt: So, that’s a really good question. I’d say that when we joined in June, you know… I think the bear market started in mid-June and so far…

Scott: Timing couldn’t have been better for you guys.

Matt: Exactly. Yeah, it sure couldn’t have been. But as I’ve reflected back since June to now, I feel like I’m still working an awful lot. And I’m only 51, and I hope to be doing this at least another 10 to 15 years. And that was one of the reasons we joined Allworth, was we thought that the environment would be challenging in the right way that we want it to be, and just a happy kind of healthy environment as well. When we joined in June, we started to, you know, not only have to continue trying to keep clients in their seats but also we were learning…

Scott: New systems.

Matt: … our technology. Exactly. The people, the way that work gets done at Allworth. And so, you know, I’d say those first four months… And my Tucson advisor friend had told me, he said, “You know, look, you know, don’t be concerned, after about four months or so, you’re gonna look up and realize it’s starting to feel normal.”And he was right. And I thought that the training was very helpful and it was timely. From what I understood, the team that had been put together to train us, we were among the first Guinea pig, if you will, that had been I guess brought on board to help partner firms merge in. And I thought it was excellent training, and it really helped calm my nerves and felt like I had the support that I needed in those first few months. If I had a question, I could go to not just one, but a couple of different people to help me.

Scott: And so, are there some things as you look forward to this year that, from a personal standpoint, from Matt’s standpoint, are gonna be better because you’re part of Allworth? Or are there some things that you kind of miss?

Matt: You know, I do think that going through a full 12 months with Allworth, it’ll be a complete cycle. And I think, you know, at that point, I’ll be able to have a bit of a sigh of relief just because the markets have been so difficult and we’ve learned so much. You know, you’d asked earlier about, like, what kind of motivated you to do this? And frankly, one of the thoughts was when we bought out the founder of our firm back in 2018, we took on an awful lot of debt to do it. And a managing partner of a CPA firm that we have a relationship once told me that he had a client who’s a car dealer owner, and the car dealer told him that debt essentially snuggles up closer to you in bed at night than your wife.

Scott: I never heard that one before.

Matt: Yeah. And it stuck with me too. And I have to say that he was right in a lot of ways that having that debt, it just is never a great feeling. And as part of my merging in with Allworth, it allowed me to retire my debt. And that made me very happy. And I’ve thought a lot about what this merger has allowed me to do is really narrow my focus to my mind space, to my current clients, and bringing on new clients. And my prior life, before we merged, I was the CEO of our firm. And I thought about, you know, now I’m no longer managing employees. I’m not having to worry about reviewing the annual enrollment benefit package that we’re gonna put together, not looking at, you know, industry benchmarking studies to ensure the compensation of our employees is appropriate, not reviewing FinTech, you know, trying to pick up the right…

Scott: Sounds like you’re missing those things.

Matt: Yeah, not really. Like, I had my time in the hopper. I guess a short answer to your question, Scott, is that I don’t feel like I’m missing my prior life. I feel like it helped build me, you know, or equip me to become a better advisor. And it also helped me understand my clients a bit better, who are business owners. But I think that chapter in my life was great, but this new chapter has been really exciting, and I’m looking forward to the next year ahead.

Scott: Yeah. And your two other partners have joined. One is 60. And does he plan on retiring soon or?

Matt: You know, actually, he was our Chief Compliance Officer, and I think he’s gotten a big breath of fresh air not having to fulfill that role. So, I don’t think he has any near-term plans to do that.

Scott: It’s funny that we’ve had a lot of our partners, they think they’re at retirement, and then when they become part of us, like, “Actually, this isn’t so bad. I don’t have to deal with all this other garbage anymore. I got into this business because I love working with clients and now I can just work with my clients.” Like, “Maybe I’ll just figure out how to have a good work-life balance and continue to work for a number of years.”

Matt: Yeah. Exactly. Right. And I think that, like I said, I mean, the excitement and the ability to do what you wanna do more than what you were able to do in the past, that fuels some momentum. You know, I think it’s important to state that there’s autonomy in my life still. I feel like I had autonomy, you know, prior to joining Allworth, but I feel like I have, you know, freedom to work with my clients in the way that I used to work with them, but now I just have more support to help ensure that they’re getting the best advice possible, that we’re gonna execute on the things we discussed and agreed upon in a timely, you know, fashion, and that there will be the right follow up in the future.

Scott: And you’ve got a younger partner as well, someone in his early 40s.

Matt: Yes.

Scott: Do you feel that he’s as motivated today being part of a large organization as opposed to a smaller organization? I mean, he’s got more time than either of us have, probably, in the workplace. He’s still building his career, my guess would be, in his 40s.

Matt: Exactly. And I think, you know, that was a talk about threading the needle for getting something done. I think in our particular case, being able to…the three of us all agree that Allworth would be the right, you know, home for us. You know, we had a lot of different views on what success would mean and what we would need to transition in. And to your point, Scott, yes, so if you think that…

Scott: Yeah. And you’re all about a decade…the three of you are all about a decade apart, right? I mean, give or take.

Matt: Exactly.

Scott: Yeah. Yeah. Interesting.

Matt: And we used to kind of tout that to our client base saying that it would allow for natural succession planning, in which it would. But yeah, I do think that my partner, my younger partner is very motivated. It just takes some time getting, you know, familiar with the tools available and the people available to help drive that new growth in servicing the existing clients. And that’s what I think these eight months we’ve been in with Allworth has helped teach us.

Scott: Good. Well, Matt, I certainly appreciate you taking a little time and chatting with us today.

Matt: My pleasure. Thank you, Scott.

Scott: Yeah, thank you. And if you wanna learn more about Allworth, we’ve got a website, allworthpartners.com. Learn about who we are, and we’d love to have a conversation with you if you’re in a time where you’re thinking about what your next chapter might look like. So, thanks so much.

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