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CEO Bill Sowell on Expanding into NWA

10 min read

Bill Sowell is CEO of Sowell Management, a registered investment adviser that he and his wife, Cindy, founded in 2001. The North Little Rock native attended the University of Arkansas at Little Rock and began his career in financial services in 1990. He was early to embrace the move toward fee-based advisory services, and became a fiduciary in 1995 when he began his fee-only practice. In 2020, he won the Arkansas Business Executive of the Year award. Today, his firm has $4 billion in assets under administration, including $2.8 billion in assets under management.

You recently acquired a firm in Rogers, putting an office in northwest Arkansas. What are your goals for that operation in a fast-growing part of the state?

Everything we do is with a focus on growth. With around $4 billion in assets affiliated with our firm, we’ve grown from $500 million in 2016 to where we are today, so we’ve experienced phenomenal growth, and our goals and expectations have us topping $10 billion within three years. With 50-plus branch offices all across the country and being based in Arkansas, it only made sense that we would expand our efforts into northwest Arkansas with a physical presence. We would not have opened an office in northwest Arkansas without an anchor. Fortunately, that opportunity came through acquiring Sector Grid Advisors, who were affiliated with Raymond James in Rogers. The advisers, Bob Taylor and Tonya McKaughan, were a perfect fit for us in every way — their size, which was around $120 million, and focus on client service, along with being a great cultural fit and just basically being really good people. Northwest Arkansas needs no introduction. Every time I go up there it’s invigorating to see what they’ve accomplished. Everyone thinks “Walmart,” which speaks for itself, but it’s truly been a community effort when you look at the business environment as well as quality of life for its residents, not to mention its beauty. Our projections would have us topping $200 million in four years, and quite honestly, I wouldn’t be surprised if we hit that much quicker. This office operates under the brand Trek Wealth Solutions and is located in the Cooper Communities building in Rogers at 903 N. 47th St., Suite 101. We couldn’t be more excited and have a great team in place with Miki Morrow, a longtime Sowell employee managing the office as client relationship manager. She has done a wonderful job in helping Bob and Tonya transition their business over to Sowell and overseeing the build-out of our new offices.

What challenges do advisers face when it comes to succession? How do you help them in that process?

That’s a really good question. When you think about it, advisers are small-business owners, and like most small businesses they tend to struggle with succession planning. They all know they need a succession plan, but they also need a continuity or contingency plan in case something happens unexpectedly. The biggest challenge is in a typical scenario when a seasoned adviser brings in a junior adviser with the hopes of selling their practice to them down the road — this rarely works. So what tends to happen is a few years down the road, the adviser has invested a lot of time, energy and money only for the junior adviser to leave and go out on their own. I’ve seen it time and time again. At the end of the day, advisers want a fair price for their business, but what’s most important to them is knowing their clients are going to be taken care of. That’s where our entire ecosystem comes into play. We not only have the back-office support and adviser network to ultimately take over and run the business, but it’s a big advantage to the clients as well. Since an adviser’s book of business is on our platform, the clients are already familiar with us and we are familiar with them; it just makes it a seamless transition. We currently manage clients all over the country who came to us through our succession agreements, and it has worked very well. One thing we do differently from most in our industry is that we allow the adviser to stay on as long as they’d like until they are ready to exit the business or start transitioning out. My feeling is that the longer the adviser is on our platform, the more familiar the clients are with us, which makes for a smooth transition. Every adviser should have an “executed” continuity and succession plan. Ours is nonbinding, so if down the road an adviser decides to do something different, they can do that, but if something does happen, we’re able to immediately step in and take over their business.  Like most small-business owners, this is normally an adviser’s largest asset, so why wouldn’t you have something in place to protect your biggest asset and ensure that your clients will be taken care of? It’s just good business sense. We’ve had several advisers who passed away unexpectedly, some that decided on a different career path, and others that were ready to slow down or retire. This is also a big topic of conversation with our industry regulators as well, and for all the right reasons. As a fiduciary, and looking out for your client’s best interest, when an adviser gets audited by a state or federal regulator, they will ask, “What happens to your clients if something happens to you?” We provide that solution.

What are advisers hearing from clients amid high inflation and interest rates? What are their clients’ biggest concerns?

Everyone has certainly felt the pinch. You don’t have to go any farther than the gas station or grocery store — your money just simply doesn’t go as far as it used to. Some would argue that we’ve already been in a recession and others would argue that it’s coming. While no one likes paying more for less, the good thing is that this is nothing like the financial crisis of 2008. As a firm, we are big on financial planning, which takes into consideration the risks associated with a recession. Clients who have a financial plan are more focused on “goals” as opposed to “performance.” An adviser’s job is to provide comfort to clients during times like these. Times like these are normally when clients make the poorest decisions, so being there for your clients on a proactive basis is what will help them weather the storm.

What should someone consider when choosing a financial adviser?

Having been in this business for 33 years now, that question and the answer have never changed.  That is, is it a good cultural fit and is the adviser a good listener? Some advisers like to talk; in my opinion when you ask a question then it’s time to be quiet and take notes while you listen to the answers. I can’t do my job without asking a bunch of questions and then knowing and understanding what’s important to a client. If you build the proper rapport with a client, they will answer all the questions you need to help them develop a strategy to accomplish their dreams and goals. I’ve been blessed with some great clients and incredible relationships. There is nothing more rewarding than having that meeting with a longtime client when you can sit back and look at the client and say, “Great job. We did it.” I’ve had clients achieve goals they never thought possible. Some clients you just know are going to do well — they are all rewarding — but to help a client with something that’s important to them but seems unachievable only to attain that goal is just magical. This is a wonderful profession that is incredibly rewarding. I’ve been in the business long enough to have many clients go full cycle from being young and just starting a career and family to now having grandkids and retirement. I still get chill bumps recalling some of the moments when a client hugs you and thanks you for all you’ve helped them achieve. We utilize what we call “bucket list living,” and I want to know what is on your bucket list. Yes, saving for retirement is important, but what about living life along the way and planning for it. Maybe it is paying for college so your child comes out with no debt. Maybe it’s saving for a wedding or taking special trips along the way. We want to know all the bucket list items so we can help those dreams come true, and still be able to retire. Part of our job is being realistic as well, so it’s also counseling clients along the way. My final answer is that your adviser should do comprehensive financial planning in a fee-based practice. Without all the information I’m just not comfortable giving someone advice. That would be like going to the doctor and prescribing medication without knowing the symptoms. Also, working from a fee-based business where they are compensated by fees as opposed to transactions. I converted my personal practice back in the mid-1990s to fee-based because it just made sense to me. I never liked the old broker/dealer model where I was paid a commission every time I bought or sold something for someone. Under the fee-based model, I have a fiduciary responsibility to make the recommendation that is truly in the client’s best interests.

What do the registered investment advisers you work with need help with the most?

The ideal adviser for us is one who understands the value of outsourcing. An adviser’s time is best spent serving their clients. I would say the biggest area is in managing a client’s assets. We have an incredible asset management division, which includes Bob Taylor and his Trek Wealth portfolios, but also an investment management team lead by Greg Lai, CFA, that includes numerous other CFAs as well as an MFE, which is a Master of Financial Engineering. This team manages all our portfolio offerings and covers the investment spectrum from active management to passive, tactical, individual stocks, global and international, liquid alternatives as well as specialized portfolios for high-net-worth clients. All of these can be tax managed as well. All our advisers have the advantage of utilizing the full breadth of our services, which include an end-to-end technology platform, a great marketing team, compliance, adviser solutions team, data and technology, outsourced financial planning, an accounting team that performs all the billing functions, and even an in-house estate planning attorney. The entire platform was built around what I felt I needed as an adviser to allow me to focus on my clients and not in the weeds on time-consuming tasks.

You work with advisers all over the country. What have you learned about how to communicate and manage far-flung operations?

I love this question. Advisers are as unique as fingerprints— every one of them is different in their own way. If you can think of it, we’ve seen it. Everyone has their own ideas about how to run a business and how to work with clients. Very few advisers start out in this career. Most came from other industries, so they bring those past experiences with them. Our business development team does a really good job of taking a consultative approach with advisers. We really need to understand them and what they are trying to accomplish to be able to know how best to work with them. Their experiences vary wildly. They may have come out of a wirehouse, like Morgan Stanley or Merrill Lynch, where everything was provided to them, to an adviser who is coming from an independent firm and already understands the structure. Our ultimate goal is to help the adviser run their business as efficiently as possible to free up their time to meet with clients, manage those relationships and grow their business. Freedom, growth and partnership are principles we stand by.

What’s a valuable leadership lesson you’ve learned and use to this day?

Hire the best people you can and then get out of their way — let them do what you hired them to do. I’ve made the mistake in the past of hiring people based on their resume and experience. What I’ve learned is that you can teach and train people to do a certain job, but you can’t change who they are. So we hire based on whether we feel someone is a good cultural fit with strong values and character, and secondly their ability to do the job. Having coached a lot of my children’s football and basketball teams, I learned that you have to adapt your coaching to each individual player. Some players respond well to certain interactions, while they might have a negative effect on others. So learning how your players respond to allow them to perform at the highest level is critical. It’s the same with managing people. Find out what motivates them and then support and encourage that behavior. We utilize a business management system called EOS, which stands for Entrepreneurial Operating System. We’ve operated under EOS for six to seven years now, and it was a game changer for us. I then hired a longtime adviser of ours, Daryl Seaton, to come in as chief operating officer and manage our EOS process and he has done a phenomenal job. He’s done a much better job than I ever could have. After a couple of years in that role we promoted him to president, and he continues to lead the team in a great way. The culture at our firm is the best it’s ever been and I attribute that to Daryl.

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