Steward Adds $3.75-Mln Wells Profit Formula Team to Indie Channel
Steward Partners Global Advisory, a Washington D.C. firm associated with Raymond James Financial Services, has hired a Wells Fargo Advisors team that had been affiliated with the wirehouse’s quasi-independent Profit Formula program.
They had generated around $3.75 million in annual revenue from $780 million in assets, the two confirmed in an interview. The group also includes client associate Melanie Schwartz and Utley’s son, Ben, who is joining as a trainee and entering Raymond James’ training program.
The team is a part of Steward’s fledgling ‘affiliate’ channel as independent contractors. Steward has around 175 advisors, almost all of whom are employees. It launched the independent channel one year ago with the hire of a $6-million team from Royal Alliance in Clayton, Missouri, but the Sullender- and Utley-led group will be the first new hires since the launch.
In an interview, Sullender and Utley said that the Steward model was a “natural fit” since they had already been running their own balance sheet each month under the Profit Formula program. The small program, which has been closed to new recruits for several years, pays advisors around 75% of their trailing-12 month revenue, but the brokers must cover their own rent and staffing expenses.
Sullender said that the economics of Steward’s model with Raymond James will be slightly more favorable and allow them to add some additional support staff without sacrificing their take-home pay.
Recruits to Steward’s independent channel also receive 50% of their annual revenue as an upfront cash award, as well as equity in Steward valued at 100% of their trailing-12, according to Jeffrey Gonyo, head of recruiting.
Sullender and Utley said the primary reason they began looking around in April last year was to have Ben Utley join the team. There were routes to expand their staff but hiring additional members or making other changes to the team was “cumbersome” and required several layers of approval under Profit Formula, where they were still Wells Fargo employees.
“You’re still essentially working through the branch rather than having complete control of your own staff and your own expenses,” Sullender said. “They did have avenues, but like every big institution, you’re in a very specific lane.”
A spokeswoman for Wells declined to comment.
Sullender and Utley also were friendly with another Profit Formula broker, Bradford Coyle, who moved from their McLean branch to Steward’s employee channel in 2018.
Steward has been an aggressive recruiter since its founding in 2013 by former Morgan Stanley managers and recently took a $100 million investment from The Pritzker Organization. Steward said it would use the money to expand its recruiting, buy registered investment advisory firms and allow some partners to sell shares.
It also ended its exclusive custody arrangement with Raymond James Financial Services, according to a May announcement, and has agreed to hold some investment advisory account assets at Goldman Sachs.