Built By and For
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Built By and For
EP04 - Is your next firm a partner, or a paycheck?
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Nearly one in ten financial advisors moved firms last year — roughly double the historical average. So what's actually changing, and how should an advisor think about choosing a partner firm in 2026?
In this episode, Steven Watts sits down with Brad Shepherd, CEO of Founders Financial, to unpack the forces behind the wave: industry M&A, private equity ownership, and the shift from service-and-care to scale-and-profit. They examine why technology has flattened the differentiation game, what sub-$100M advisors face inside the mega firms, and how to read the difference between a short-term transition check and a long-term partnership.
A partner-to-partner conversation for any advisor weighing a move — and a reminder to start with the destination, not the details.
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From Founders Financial, this is the Built By and For podcast. Partner-to-partner conversations for independent financial advisors. Today, host Steven Watts, Chief Growth Officer at Founders Financial, sits down with Brad Shepherd, CEO of Founders Financial, to discuss how to choose a partner firm and the splash versus ripple of any move. Nearly one in ten advisors changed firms last year, roughly double the historical average. Something is shifting. Here's the conversation.
SPEAKER_01All right, well, um here with Brad Shepard, uh CEO of Fenders Financial. Brad, thanks for stopping back in today and uh having another conversation with me. I think we've got a um uh definitely a poignant topic, definitely uh a topic well timed for what's going on. Uh I, you know, prepping for this, I was kind of looking at some some some data. And um what what stood out to me is that over the last in 2025, um we are seeing nearly double the amount of advisors that are leaving their existing firms. Now, some of that's MA, some of that's Wirehouse. Things not under control necessarily, right? But it's double than what the historical average has been. So close to 10% versus the average historical four to five. Okay, yeah. Which is that that's that's significant. It's not insignificant, right? Definitely not. So the conversation we're gonna have today is not really just about you know the the act of changing firms, but it's really the conversation around choosing a new partner, right? And if you are gonna make that, if you're part of that 10% that's leaving nowadays, like who are you going to? Right. Like, where are you going? How are you making that decision? Are you going from big to big? Are you going from small to big? You're going from small to small, like what's what's the decisioning in there? But before we get into all that, just take a moment and give me your thoughts, your perspective of what's happening in the n in this industry right now. Yeah. That is uh we're seeing this big dramatic change.
SPEAKER_02Yeah, I I think part of it's certainly driven by the MA activity. Uh and as firms are being purchased and acquired, advisors are being forced to assess things they probably wouldn't have even thought to assess before, um, and whether they're comfortable with the decision that somebody made for them about where they're going to and what they and what that might mean for their enterprises and their businesses. Uh, I also think that, uh, and this is a good thing, uh, at least in my my estimation for founders, uh, advisors are are really beginning to get tired of um what this mass acquisition movement over the last decade, private equity movement over the last decade, has done. It has uh created an environment where scale and profit have become more important than service and care, uh, I think in a lot of these firms. And so they're realizing that um they're not independent other than contractually, that they really are very dependent upon these firms for lots of things. And if that's going to be the case, the this what's that symbiotic relationship then look like? And so I think advisors are picking their head up and beginning to look around again uh because um yeah, the what they always knew isn't, um what they want isn't, and they're beginning to explore uh alternatives um for probably the first time in a long time because the nature of scale um changed the changed the the promise, changed the equation, so to speak.
SPEAKER_01Yeah, the the MA stuff is interesting, right? Because it's kind of the point you were saying around are you really independent, right? On one side, you were just purchased and acquired through the acquisition, right? So in that sense, am I really independent? But you're independent because you can always decide to move afterwards. You have that choice, right? So it's an interesting kind of thought there. Um so as you're as you're an advisor, and whether you're moving because your firm was just acquired and you don't want to go to the person that acquired them, um, or you're you're in a situation just isn't right, like for you, like what are you thinking about if you're an advisor? If you were an advisor, what are you thinking about as, hey, let me assess what am I assessing, what am I looking forward to in the net the next relationship? Like, what are those things?
SPEAKER_02Yeah. I I I think the same thing that advisors assess on behalf of the client relationships they serve, they should apply to themselves in this same circumstance and ask themselves the question, you know, candidly, what's most important to them? Uh and from their partner. Uh the reality is every firm is their partner. It's the degree to which they're a good, how good is that a silent or a bad partner, right? Exactly. Um, and so I think it always starts with that simple question: what's most important to them? Uh I think it's forcing advisors to really take stock of their business enterprise, um, what their ability to continue to serve their client relationships means and how they can scale and grow their practices and have a partner help them do that with. So I think that probably drives a lot of their thinking about what's potentially most important. Um and I think that uh I think service degradation's been a real thing in the in the big firms. And so they're understanding that um it's hard to get answers, it's hard to get clarity, it's hard to um, you know, get the things they need to make their business decisions by. And so I think it starts there, what's most important? Um, then uh, you know, it's probably the right way to go about it, but then why is it so important, right? So not just what is, but why is it? And then once you've answered those points, what are you gonna do about it? How are you going to then engage this process to discover what's possible? And I think candidly, um the the choice is as um stark in a positive way as it's been in a long time. You've heard me say this before. I I think technology um has flattened um the the scale proposition of the big firms and uh smaller firms can deliver what the big firms have always claimed to be only able to do. If they thought about it correctly. If they think about it correctly, or they spend a legitimate effort in uncovering what's out there uh versus what they perceive is out there because of the narrative that's been spun industry. If they're trying to build their own tech, then maybe not so much, but if they're if they're thinking about it differently, they're if they see their their firm as their interdependent partners, we've talked about on these other on other sessions.
SPEAKER_01The opportunity to compete has never been greater for smaller firms.
SPEAKER_02Trevor Burrus, Jr. That's exactly right. And so they have legitimate choices. But it again, to answer your question, again, it comes back to you know, what's most important to them, why is it most important to them, and then what does that drive in them in potential openness or desire to change? One of the things I love about our organization and the and the servant leadership model, it's its foundation, it's built upon, is a tenant of this idea of once you're committed, you go no matter the consequence. And so, to what degree of resolve will an independent advisor have in this process to uncover, discover, and then actually pursue rigorously and aggressively what they at the end of the day probably deep down knows better for them? And so, how much has complacency set in to them, to their firm, and what are they willing to do, kind of no matter the consequence, to actually go um work with a uh a partner that's gonna help them and be focused on, specifically focused on helping them achieve their enterprise goals and dreams.
SPEAKER_01I would imagine that resolve is is can be challenging, and let me explain why, right? Because as uh you know the the sea, so to speak, becomes very similar, right? The sea of sameness for for example, right? As that becomes you know more um homogenized and and more more consistent, then the resolve of what really matters probably isn't like as easy to find, right? Right? You don't see it as much, like hey, I really want this, but if that that is not clearly visible in the granular landscape. And maybe not even believe it exists. Yeah, correct, right? So if you are truly resolved that you need this one thing, then that should be your your North Star to go finding that at the right partner, whether they're big. And the bigs do great stuff. And we've talked about that. This is not a knock on bigs or a knock on smalls, they all fill their role very, very well.
SPEAKER_02This is an effort to understand the differentiation of those choices. Trevor Burrus, Jr.
SPEAKER_01But it's that resolve to go find what you really, really need and go seek it out and stay consistent and honest in that pursuit, right?
SPEAKER_02Yeah. No, I I think that's right. I saw an interesting article today, so it's interesting. I probably saw this today now. Uh, and the the argument the article is making is that the next trillion dollar market cap company isn't gonna be one that's technology based. Now, I don't know if I agree with it or not, but that was the premise. And what they were arguing is that the next trillion dollar market cap company is the one that gets figures out how to do human services the best. Um and that that technology is gonna become literally like electricity or or clean water, they're just it just you have to have it. It's expected. It is just understood that that's the way things are, and and that's not gonna be this massive differentiator. And so if this article is correct, um and the idea that what's actually of value is the ability for us to engage in authentic real relationships, supporting this human experience, it's kind of interesting to think about in our industry space what does that mean? And then for advisors and the and their potential desire to find the right partner, what does that mean?
SPEAKER_01Yeah, it's it's uh you may be thinking of something, it's it's almost like technology, even AI, right? We may have a whole bigger AI conversation at some point. That it becomes a utility, right? It becomes the default setting, right? Yeah. And it's the the table stakes, whatever else you want to throw on there. Right. Like it it's gonna sit as this foundational layer, but to your point, who can do the the human services better, right? Who can develop those relationships, who can understand what is not common amongst the things that are all common, right? In our world.
SPEAKER_02Yeah, I I uh uh uh I read an article 15 years ago now. Uh an Indian immigrant to the United States wrote about what makes America great. And I as I was about to read the article, I'm expecting to hear things like freedom and um separation of church and state, you know, the principle foundation of our country, right? And he didn't write about that. He wrote about clean water, that when you flip the switch on in the wall, the electricity goes on. Uh, that our roads are drivable. You know, these very things that we just as Americans take for granted. I think our industry is gonna, in the next five to ten years, and as again, back to seeking the right partner, these things that are maybe in the past differentiatable to some degree, they're gonna be just taken for granted because everybody has them. That's the outcome of the technological revolution, the fintech disruption, AI, all those kinds of things. And so advisors, um, as they then pursue this question of right partner, are gonna have real legitimate choices and how businesses have decided to uh prioritize experience, um, relationship, um, care, uh, listening, understanding, partnership in a way that uh I think is is gonna be really neat for advisors in the in the in the coming years.
SPEAKER_01Cool. So the the consolidation is happening. We've talked about that, right? The the bigs are getting bigger, right? Um what if you're a smaller firm or a mid-sized firm? Think about the the advisor that's got 15, 20, 25 AUM, right? And you know, maybe 60, 80, somewhere that, that, that ballpark. Um, what what happens to them? Like are they lost in this shuffle? Are they can they get something out of the bigs? Like, should they go small? Like, what are they what should they be thinking about as they seek a partnership, especially if they're rolling up an MA, right? Because they might be the forgotten child in that situation. Yeah, we've talked about this a lot, right?
SPEAKER_02They don't they're probably not gonna garner much attention. I think it comes back to that same thing that we said a minute ago. What's most important to them? And uh can they exist in those structures without question. Um if and but do they have the vision? Do they have the perspective to understand that now they're kind of left on their own, they're on their own island? And what are then the resources and things that are gonna help them um go to the next level? And I don't mean necessarily growth next level, but understanding of what it is to to be a business owner, understand what it means to deal with the complexities every single day of growing an enterprise and a practice, not just delivering advice uh to clients. And so I I do think there's great risk to advisors, you know, you said 25, I think less than 100 million candidly. Yeah, that as um the the the biggest firms or industry continue to scale, uh, you know, the warehouse firms, not dissimilar than the wirehouses um of the of the olden days, so to speak, uh, I think there's there's uh a great risk to those advisors that they're gonna be allowed to participate in the in the utility experience, but they're not gonna have uh a voice to see at the table. They're not gonna really have someone that's gonna pay attention, uh, and they're gonna be asked to follow the rules. And as long as they do that well, yeah, there's that they'll be allowed to be there. Um, but if we're candid, the the economic quotient they provide isn't is nominal. It's it's you know it's like dropping a pebble into an ocean to some degree.
SPEAKER_01Is a tiered support structure and service degradation is that that a real problem for these advisors?
SPEAKER_02I think that becomes a risk. I can't say I know specifically today that it is. Um certainly when we talk to advisors that are below 100 million, uh, as we typically do, uh that's a that's a area that we have incredible strength in, supporting and serving, uh, because it is for us about who they are and what their dream is, not how much they produce today and being growth-minded. Uh I I uh I do get the sense um that uh they are suffering a little bit for sure. Uh but I also get the sense candidly that even those that are bigger than that are suffering in in some of these places as well because of the constant change, uh the constant turnover of staff and how you then solve um service problems at scale. Um it's not an easy thing to do.
SPEAKER_01Yeah, you you've said this before in the past conversations you know, I've had is you you in that situation it's hard to solve problems together. Right. You know, problems I would say it's impossible to. Right? I mean, problems are are in many ways solved for you, if they truly are solved. Yeah. Where uh and maybe that's good, that might work in some cases, um, but they're certainly not solved together, right? They they have to be solved. They have to be solved top down because they just they just can't do with 30,000 advisors, that might be.
SPEAKER_02And candidly, because and again, I don't I don't know if this is fair, but I'll say that. Yeah, no, no, no, no. So I don't know if this is for what I'm gonna say next, but firms that are more economic quotient driven, publicly traded, private equity owned, um, I mean, the the impetus of that is the economic investment that's been made, right? Sure. And the return to shareholders, the return to investors. Um you know, if you're leading those firms and you have to deliver service at scale, it's gonna it just has to get less personal. Yeah. There's just just that's the outcome. No different than I can't call Verizon to talk with someone these days. I gotta go on my app and and talk to the chat box.
SPEAKER_0110 prompts to get the exact yeah.
SPEAKER_02So I think that that's for advisors that that we tend to do an incredible job of serving, getting those less than 100 million, looking for a partner, looking to unlock kind of from within themselves how to actually go pursue ownership of an MB enterprising. Sure. Um, I think they're at great risk.
SPEAKER_01Um but if you want hands off, then that that works. Yeah, sure. There's a lot advisors that love that, and that's perfect for that.
SPEAKER_02And then that's independence, uh probably the best way it could be in our industry. Sure. Uh understand that we're probably not actually independent.
SPEAKER_01We're dependent as we've talked about in other episodes. So yeah. Um you actually gave me a pretty good segment, next thing. So if you're an advisor thinking about moving, right? And you're how did you how should you think about firms that are private equity backed, right? Or pub most many are publicly traded, obviously, but private equity backed, publicly traded, what should that thinking look like if you're an advisor?
SPEAKER_02Yeah, I I'll say more on the private equity side than the publicly traded. Um I I think that you just have to expect change that you're not in control of. Yeah, sure. Um that you're gonna get an announcement at some point in time that ownership has changed, and with ownership changing, uh, who knows what that means in the then in the context of the business model, in the context of what will or won't be the same, what might become different, you know, those kinds of things. So yeah, uh, and uh, don't get me wrong, I'm I I love American capitalism. Private equity plays an incredibly important role in our in our economic systems. I think it's not a bad thing it's in our industry. I think it's a great thing it's in our industry. The but the key point is advisors have to kind of be eyes wide open about what the implications of that are. I was at a conference a year ago and I was on a panel talking about that very topic, right? And one of the other panelists said, you know, they won't even talk to an advisor unless you're doing a million dollars or GDC. And uh and that's there's nothing wrong, good or bad about that. That's the business model. That's their business model. But the point is, what they're basically saying is that you're only valuable based on an economic quotient. And if you're an advisor that does less than that, we're not interested in you. You you you you don't move our needle enough. Yeah, and I think that's unfortunate. Uh, there's incredible advisors doing half that, three-quarters of that, one quarter of that, that that are growing, that are right-minded, that are doing incredibly great work to serve people. Uh, you know, but I get it. Their economic model dictates that the only way that they're gonna get the private equity returns they seek is by focus on those and in those areas.
SPEAKER_01Yeah, and those advisors who aren't doing it today could be doing that in more tomorrow. They will be giving the right support, right? Yeah.
SPEAKER_02As you know, we'll we would love to work with those types of advisors and help them grow businesses that uh they look back and have doubled and tripled in five and ten year periods and those kinds of things. Yeah.
SPEAKER_01So we we've done a number of transitions, obviously. Um uh capital concerns, short-term things advisors need to worry about when they're going through transitions, um, long-term constraints you need to be aware of. Like what advice would you give to advisors like think about those those things?
SPEAKER_02Yeah, I would say that the industry, and and maybe this is a bit of a biased perspective, but I think our industry has trained advisors to focus on their economic value. Um and the reality is if they go grow a business that's great, um, they're gonna probably make plenty of of income. They're gonna own an asset that's transferable someday and monetizable. Um, most excellent advisors that grow great practices are not gonna really have personal economic issues long term. Um and so the question becomes is the is the kind of like the shot in the arm of an initial um some sort of transition package or thing like that check um worth what it means in the long term relative to you've kind of you've kind of you're stuck. You've agreed to be there for a short period of time, you're accepting the the rules as they've been laid out and don't have any control over how they might change, versus a partner, and I think like founders who you know will invest in a in a transition with an advisor, uh, make sure they're whole through it, uh, and then go help them grow something that on the back end maybe might end up being more valuable because of the direct uh agreed and and chosen influence we have on each other, authority we've given each other, and partnership we've done to help them to grow a practice ultimately.
SPEAKER_01Yeah, it goes back to what you said. It's it's what's most important, right? So if if the the capital concerns are really important, then that that's a consideration. But there is And a legitimate one.
SPEAKER_02A legitimate one. I mean, these transitions are hard, they're disruptive. Um I cherish and I'm very thankful that when a person decides to join founders, um, you know, because what's interesting is you know, the the burst of excitement and momentum in that moment, it's like it's like dropping a rock into a pond. It has this big splash, but that's not what's lasting. That that dissipates quickly. It's the ripple across the pond that makes the big difference. And so um I am not I feel nothing but honored that we have people willing to go through the disruption of the splash to seek what the ripple effect of being a partner, a member partner founders can look like. And so back to the question, so then what's the mindset of an advisor? If if I were the one making the decision for my practice, I would focus no different than I do for my clients, the the long term versus the short term. Um, you know, we train our clients all the time that the disruptions, the the things rock dropping into the ponds every single day, uh that cause market dislocations and economic dislocations and political dislocations. Don't worry about those. I would say, I would give advisors the same advice. Don't worry about the the splash, focus on the the partner that's gonna help your ripple be lasting and be and be stronger, if that makes sense. I don't know if it's a good analogy, but a way to think about it.
SPEAKER_01Yeah, but and it's it's again, if if you value that independence, right? Yeah, then that's also part of the consideration, right? Because as you said, you you take that big check, you you maybe forfeit some of that independence in the process as well.
SPEAKER_02Trevor Burrus, Jr. And I think what's interesting about the the kind of the big transition packages that that we see on headlines all the time is you know, back to this idea of business ownership. Do advisors take that money and actually go put it into their business as capital, capital contribution, and use it to then invest in technology, people, resources, growth strategies, or does it just make their net worth higher? Yeah, you go to the investment account, right? They're probably already living pretty well. They probably have you know nice lives and those kinds of things. So it is interesting to think about that too. Like, what are they actually doing with it? Other than it feels great, that shot, you know, again, that that shot, yeah. Yeah, but yeah, it's it those are the things that if I was an advisor and think about this, I would really challenge myself to to consider. And I and again, I I'm not saying that because it's not important uh and it can't be impactful. I'm saying it because it doesn't necessarily mean it's right.
SPEAKER_01Yeah. Yeah.
SPEAKER_02Human conditions, just because you can doesn't mean you should. Yeah. Kind of a thing.
SPEAKER_01Yeah, exactly.
SPEAKER_02Yeah.
SPEAKER_01All right. So I'm gonna put you on the spot here. Uh if you were sitting in front of advisor right now considering um moving firms, yeah, what would you tell them to think about? What what what would you advise would you give them to say, think about these three things or these five things?
SPEAKER_02I I would I think I can sum it to one thing actually. Okay. I would ask them that, you know, what do they want their enterprise and their life to look like in 20 years or 10 years or five years, depending on what their you know their time frame is. And then based on that answer, then you kind of get to work back a little bit. Um, one of the most valuable exercises that I ever undertook here at Founders was, you know, thinking about that in the context of our organization. Long-term picture and setting a destination versus just incrementally moving towards something. And so if so, is is your goal to retire or not? At what age? How important is the monetization? How important is your is the content of your care of your relationships? Like, what does the end look like? And if you can see clearly what the end looks like, it gets a lot easier to then assess what is required to get there, if that makes sense. And so if I can understand that from them, I can help them better understand how founders or any firm they would be talking to can be the partner, the conduit, the utility in some cases to help them get there. Um so you understand that point, you understand what's most important to them and why, and it gets pretty clear pretty quick on how to how to make the decision.
SPEAKER_01Yeah, then you get into like technology and so again, and all these are.
SPEAKER_02And founders, anybody else's isn't that different. True. Um Yeah, we all need to deliver great client experiences through technology. We all need to run our business effectively through technology. And the the disruption of fintech, uh AI, all that, again, I've said this many times, it just has flattened that. Those aren't massive differentiators anymore.
SPEAKER_01Yeah.
SPEAKER_02There's subtle differences. So for example, if I'm an advisor and there's a planning software that's critical to me, or there's a CRM that's critical to me, these foundational points of my firm and the firm I'm considering can't support them. Well, yeah, though, those those are probably deal breaker moments, right? Sure. Um, it's hard enough to make a transition, let alone going to transition planning software, CRMs, all this kind of stuff, right? And so again, destination and site, understand what's most important to them, why. And then once you've done those things, getting into the details around um what they do to operate their enterprises, how they how they organize their enterprises. Um that's when you can really then assess where's the right, where's the right match and could founders be the right match or not? And we're perfectly comfortable telling someone the or not if that truly is the right answer. Yeah. Uh I've said this many times, no different than advisors or fiduciaries to clients. We're a fiduciary to advisors. It's not our job to recruit them here. It's our job to explore with them common ground and what's possible through this relationship. And if that's motivating both of us, yeah, giddy up, let's go. But uh I I'm more than happy to also be the person that says we're not right. And here's where I think you might go look um because of what you've told me the answer to all these questions are.
unknownYeah.
SPEAKER_01I think that's a great place to leave it. Brad, thanks for uh joining us again and having a great conversation. Thank you. Excited to have you come back and uh talk some more. Appreciate it. Look forward to it. All right, thanks. Thanks.
SPEAKER_00Thanks for spending time with us on the Built By and For podcast. If this conversation resonated, follow the show on Apple Podcasts, Spotify, or YouTube, and share it with an advisor in your circle who's thinking about what comes next. To learn more about Founders Financial and our solutions for independent advisors, visit Foundersfinancial.com. The Built Buy and For podcast is produced by Founders Financial. The opinions expressed by hosts and guests are their own and do not necessarily reflect the views of Founders Financial. Content is for informational purposes only and is not intended as investment, legal, or tax advice. Securities offered through Founders Financial Securities LLC, member FINRA, and SIPC, registered investment advisor. Copyright Founders Financial, all rights reserved.
