Speaker 1:
Welcome to ETF Central, recorded here at the New York Stock Exchange, the home of ETFs. We're diving deep with the people shaping the space, the technology's driving innovation and the stories behind the tickers. Whether you're an investor, issuer, or industry insider, welcome home.
Bilal Little:
Welcome to another edition of ETF Central. My name is Bilal Little. I'm your host where we cover everything from wealth management to ETFs. I'm really excited about today's guest because he's not only a friend, but he is someone that I've always admired in the business. His name is Bryan Staff. He's the founder, managing partner and head of strategic growth over at Merchant Investment Management. Welcome to the show.
Bryan Staff:
It's good to be here, my friend.
Bilal Little:
Good to see you. How you doing?
Bryan Staff:
It's wonderful to be here with you and obviously, like you said, you and I are friends, but myself and all of my partners, we follow what you do on a day-to-day basis here. It's incredibly interesting and it's a pleasure to be down here and having a conversation with you live and in person, bud.
Bilal Little:
Thank you. So, it's so funny because we've bounced around a little bit trying to get this conversation going, and I'm glad we're able to lock it in. So, for those of the people that don't know you, I don't want to unpack your background for you. I think it's important for you to tell your own story. Could you tell a little bit about your background from Cornell to the corner office, if you will, and how you're running one of the most significant investment management companies in the world?
Bryan Staff:
Yeah, we were talking about this downstairs. This was really interesting morning for me because I graduated from Cornell back in 1997. A lot going on, it was a lot different back then in the late '90s. I was actually in the school of Industrial and Labor Relations. I thought I wanted to be a lawyer. And then the late '90s come and obviously, the excitement around the public markets, that was the first tech boom, if you will. There probably wasn't a lot of efficacy in the business models, but they were raising a lot of money and people were having a lot of fun doing it. And the building that we're in right now, the business that you run really was the hub.
It still is, but it wasn't just the hub of finance, it was the hub of excitement in Manhattan. And I took a job out of Brown Brothers. I wanted to go into investment banking just like everyone else.
Bilal Little:
Of course, of course.
Bryan Staff:
That was the hot thing. And names like Kidder Peabody and Salomon Brothers and firms like that were the ones that people were going to work for, and they obviously aren't around anymore. They've been gobbled up by other firms or they've just gone away.
Bilal Little:
This is important. So, for people who don't know what PKS is or what they do, simplify that and how you transition into that role.
Bryan Staff:
PKS is, and we'll get into this, PKS is a utility in the independent wealth space when we're talking about the evolution of the independent wealth space, this $20, $30 trillion market that you and I both work in different roles. I'll try and make this as linear as possible. When a group of individuals leaves a wire house or leaves an independent broker-dealer and goes fully independent, but they are considered a hybrid practice because they are duly registered advisors that still need to maintain their securities licensure-
Bilal Little:
Securities licensure, mm-hmm.
Bryan Staff:
... to transact in commissionable business. And that could be anything from insurance, variable insurance to fixed income trading, which sometimes lends itself more to a commission than a fee or any other products like that. Even in certain situations, ETFs-
Bilal Little:
Just transactional. Yeah, for sure.
Bryan Staff:
... transactional business, right?
Bilal Little:
Yeah, yeah, yeah.
Bryan Staff:
You need to run that business through a broker-dealer. And so, what PKS evolved into after I joined the firm, up until that point, we really were just an Albany, New York based broker-dealer that took advantage of the government and the government entities that were up there. And the wealth that was generated from that, even though it's significantly less expensive to live up in Albany than it is down in the city.
Bilal Little:
And what role specifically did you play in that business? Because it's a 300 plus billion dollars business today. What is it today?
Bryan Staff:
Well, no, so PKS holds securities licensure, and I'll get this right, but I haven't been in the business for a while. We sold it. They're probably around 200, 225 billion.
Bilal Little:
Wow.
Bryan Staff:
But that is the AUM managed by the securities licensed individuals that are Affiliated with PKS.
Bilal Little:
Correct, correct, correct.
Bryan Staff:
I think PKS probably around 50 billion, 75 billion, something like that. But it is still an essential component to the business.
Bilal Little:
Of course.
Bryan Staff:
Your question about, so what did I do? The initial thought was come back from the capital market side of the business and set up a product distribution business at PKS where you could take advantage of all of these advisors, these disparate advisors who were running their RIAs all throughout the country. And what we figured out very quickly is that that's not why they were licensing with and affiliating with PKS. They needed PKS for a specific reason, for a verticalized approach to commissionable business, period. And then they wanted to run their RIA-
Bilal Little:
Gotcha.
Bryan Staff:
... and they weren't going to take advice from a guy who was an investment banker on Wall Street about the type of products they should be utilizing. There's a lot of other ways that they could do that. So, what I did was I really moved into relationship management, and I assessed the industry. And I'm certainly, I guess maybe I'm right 50% of the time, and this time I was, and I figured out that going and hiring a sales force with the margins that PKS has because we're paying out 90% when I was running PKS, and that's a 10% gross margin. And after you have supervision and compliance and all of the other facets of the business that you got to run it, you may be at a 2%, 3% net margin. So, scale was incredibly important.
Hiring a sales force made no sense. So, what we did was we saddled up to the players in the business that were really on the front lines of back then in 2006, inning one of what you and I have seen and participated in, which is the move to independent wealth, the entrepreneurship model. And so, there was two constituencies that I wanted to really land that I believed that could make a difference in the business.
Bilal Little:
What year are we talking?
Bryan Staff:
We're talking, well, 2008 things got absolutely crazy. I would say probably 2009, maybe in the summer when things calmed down, March was the trough in the business.
Bilal Little:
The bottom end, yeah, for sure.
Bryan Staff:
And what we started to do at that point was I said, there's two constituencies we need to really become friends with and illustrate the value that PKS brings to the table. The first were the major institutional custodians. So, back then, Schwab, Fidelity, TD, Pershing. Obviously, that's evolved into now Goldman is a major player in the business. You've got Axiom, you've got a lot of more tertiary...
Bilal Little:
Yeah. But those were the big ones.
Bryan Staff:
Those were the big players back then. And the other constituency that we worked with very closely with were the aggregators that didn't want to have a broker dealer. It's interesting, it'll probably flow into the conversation, but two of our major partners back in the day were Dynasty Financial and Focus Financial where Tim Bello, one of the founders of the business with me was at Dynasty, one of the founding partners of Dynasty. And I knew Timmy for 10, 15 years prior to that, back to when he was at Permal running distribution.
Bilal Little:
You'll tell me how you guys got connected to form merchant and all this other stuff, but okay, I just want to stay on that part.
Bryan Staff:
Sure.
Bilal Little:
Okay. So, you're looking at the business, you're saying, "Okay, these are two partners that we need to work with, meaning industry wise." And then how does that lead to you wrapping that business up, transitioning?
Bryan Staff:
Over to Merchant?
Bilal Little:
Yeah.
Bryan Staff:
So, we ran PKS through 2016 and I think myself and my father, we looked at the business and said, "We probably have taken this as far as we can take it. We need balance sheet," right? You really can't enhance the partnerships, but we need balance sheet and we need to bring on alternative revenue streams because even with amazing scalability, you're not going to grow enterprise value at a 2%, 3% margin business.
Bilal Little:
Yeah, for sure.
Bryan Staff:
So, I didn't want to run a broker dealer for the rest of my life. That opportunity was still there and my dad's 70 right now. So, he was looking to move on from his career 50-year career in accounting and financial services, and he was the chairman of the business. So, we made the decision to sell PKS to a firm called Wentworth, which is actually, it was still around. It was a dual sale. There was an initial sale and then they backed in through a SPAC and went public as buying a capital group.
Bilal Little:
Wow.
Bryan Staff:
But no, we sold PKS back in 2016 and around that time, I was looking around to see what I wanted to do. And when you run a broker dealer, it's very simple. The other side of my family used to run before they sold it a retail furniture business, like an IKEA. It's very different, but there's one similarity, there's one commonality. My stepfather used to say to me all the time, he's like, "You know the scariest thing about retail?" And I said, "No." He was doing it, his father was doing it. He goes, "Until that first customer walks in the door, you don't know if you're going to make a dime that day. It's scary. You can advertise, you can be the big kid on the block, but until someone walks in and buys something, you have nothing."
And it's very similar to the brokerage side of the business. There's no propriety. You're an agent. And I'll get into that when we start talking about merchants.
Bilal Little:
Yeah, no, this is great.
Bryan Staff:
Yeah. I always believed that propriety was more important than agency. Agency, my dad calls it Pac-Man. You're basically out there, and...
Bilal Little:
You get something to eat today, boom, you keep moving.
Bryan Staff:
You got to eat and you got to eat again tomorrow.
Bilal Little:
Yeah, you got to keep it moving.
Bryan Staff:
And people who are incredibly good at sales love that, and that's their raison d'etre, that's why they wake up in the morning. I wanted to do something. I wanted to move away from the brokerage model into something that had more legs and maybe had more of a financial underpinning in private equity and private investment partnerships and investments, which is really what my bread and butter was. I had been doing relationship management and sales-
Bilal Little:
For sure.
Bryan Staff:
... for my time at PKS. So, it was very fortuitous, and I'll give you, there was two constituencies that came together.
Bilal Little:
Okay. And as you set this up, I just want to level set. As you set this up, make it very clear on what merchants business is and the convergence that you've seen because we're sitting here talking about, and I want to make that very clear for the listener. We're talking about a transactional business from dealing with brokers effectively to a wealth management innovation of advisor, client focus experience. That's effectively what we're going to talk about as far as people were compensated in the entire industry. So, you played a major role in seeing that. So, I want you to make sure you set that up with who merchant is and then how you guys are servicing.
Bryan Staff:
And as always, you frame it better than I always can, but I think that there's two important points here. So, the first is the constituencies and the coming together of the initial management team. So, the founders of the business, Bryan Staff, Tim Bello, Rick D'Amico, David Mrazik, Marc Spilker, and Scott Prince.
Bilal Little:
By the way, I don't like those two guys because they made fun of my shirt at the conference. No, we were...
Bryan Staff:
They were jealous.
Bilal Little:
They were joking.
Bryan Staff:
Everyone's jealous.
Bilal Little:
Yeah, yeah, yeah.
Bryan Staff:
I mean, I haven't worn a suit in five years I think, and I was nervous this morning because I knew you would be looking.
Bilal Little:
I tried to keep it clean.
Bryan Staff:
So, I had to pull this out. I had to dust it off.
Bilal Little:
Okay, so that was the part. Yeah.
Bryan Staff:
So, Tim was at Dynasty. David was at Focus Financial. PKS had been working with both those constituencies. We were acting as their broker dealer. They were running wonderful businesses, and when they were taking firms independent and building them up as independent registered investment advisory firms, they needed a broker dealer solution. I was the solution and PKS was the solution, if you will. And we came together and we have always seen the industry in a very similar way, getting back to the agency versus propriety. And we were talking about what we wanted to do if we would come together. David had left Focus and was biding his time on a garden leave, and Tim was looking to move on from Dynasty.
And we made the decision very early on that we looked at the Dynasty model and the Focus model. Again, both wonderful businesses, but we wanted to sit in between what they were both doing. And that evolved into the initial belief around a minority, non-controlled of distributed ownership business model, where we would find the best of breed wealth managers out there, either help them go independent or work with individuals that were already independent or on an IBD platform. It didn't really matter to us where the assets resided, good businesses, good people, people desirous of growth and longevity.
And so, that's how we came up with the minority investing model, keep the lion's share of the equity in the hands of the proprietors of the business, invest and get a seat at the table, become the Intel inside and build out a business where an ecosystem can evolve into one where there's distributed ownership, but commonality of purpose and synergies that could drive that business forward. So, businesses that operate independently, but give them the opportunity to equitize those businesses by harnessing the growth and the size of the ecosystem. I'll get into that.
Bilal Little:
Yeah, which makes total sense.
Bryan Staff:
David and Tim and I were very lucky because concurrently with our discussions, Mark and Scott and Rick were embarking on something very, very similar. So, for the people who don't know, and I have no problem bragging about my partners, they've gotten me to where I am right now. Mark and Scott, good friends. We're at O'Connor together in Chicago, all derivatives guys. And then went on, Scott was on the capital market side of the business, global head of risk and derivatives at Morgan Stanley, and then was a senior partner pre-IPO at Goldman Sachs doing something similar. Mark ran all of global IMD and GSAM at Goldman, both pre-IPO. In 1998, the company went public and they stayed there for several years.
Eventually, Scott moved on with some of his colleagues at Goldman, more on the fun side, Eaton Park, and then he went over to SkyBridge Capital.
Bilal Little:
Wow.
Bryan Staff:
And Mark went over to Apollo Global back when Blackstone and KKR and TPG and Teddy Forstmann and all these guys were going public, and they brought Mark over because of his acumen and what he did at Goldman and certainly the pedigree that he had established there, and he worked with them to take Apollo public. Enrico Gaglioti, who I apologize to, Enrico, was also one of the founding partners of our business, had taken over for Scott on the equity side of the business at Goldman without getting too granular, and they formed GPS Investment Partners.
Bilal Little:
Got it.
Bryan Staff:
GPS Investment Partners is a private investment partnership that works with portfolio managers throughout the space in various investment verticals that they deemed to have legs, to have alpha, to have edge. So, instead of giving their money, their capital to wealth managers because they had the ability to do it, I'm going to invest in a business that does tactical fixed income or real estate or short-term bridge lending. One of the areas that they had identified as having massive secular growth opportunities was the independent wealth space, right? So, Tim had worked with...
Bilal Little:
By the way, I have to jump in here.
Bryan Staff:
Yeah. Sure.
Bilal Little:
This is a perfect example of what I believe, and I'll get in trouble for this all the time, I call capitalism naturally inclusive in the sense of outside of structural issues that may plague industries or businesses for biases or whatever. When I say capitalism is naturally inclusive, your senior leadership team identified this growth opportunity within the IBD space effectively, or independent advisory space or advisors specifically, and a service model that would be more equitable to the advisor and at the same time, allow them to participate in growth if they believe in themselves. The way that you say it, I totally understand and grasp it.
And this is where I'm saying you have created a business model that is supportive of that growth engine. So, capitalism becomes naturally inclusive. It's just my argument.
Bryan Staff:
Yes, and well, I agree with your argument, and I'll extend it as we're talking here, because the natural evolution, and we've already seen it, and my partner Tim, always talks about to your point about inclusivity, capitalistic inclusivity, there's another tenet to it which is necessary to get you there, and it's making sure that everyone, every client is an institutionally covered client of the street. Every advisor is an institutionally covered advisor of the street, right? We're sitting in this beautiful building right now.
Bilal Little:
No, you're just talking about access.
Bryan Staff:
Yes, exactly. We're sitting in a beautiful building right now, where you work and you run one of the business units. That's incredibly important. It's led to the liquidity in our securities markets, right?
Bilal Little:
Completely.
Bryan Staff:
That's led to the evolution, and when you have secular growth and you have intelligent evolution and you have capitalistic commonality and growth, that's what's going to put clients in the best way possible. So, to your point, so we're sitting here, Mark and Scott had identified, along with Rick, who had come from Merrill Lynch over to GPS, he was along with another one of our partners. Glenn Chesser was one of the first really quant guys, I guess, if you will, because Rick's an incredibly smart individual, Rick to start building out the business. Tim had worked for Scott at SkyBridge for with, and they really formed a wonderful mentorship relationship. And Mark and Scott were saying independent wealth.
Scott's like, "Bello is at Dynasty right now. If we want to learn about this space, let's call it Timmy." Timmy came over, we all met, we got along, we had a commonality of vision, and we set out to capitalize a business that would allow for us to partner with like-minded individuals that wanted to build an entrepreneurial model in the independent wealth space.
Bilal Little:
Mm-hmm. But in simple terms, we're saying either we're going to grow through acquisition or we're going to grow organically.
Bryan Staff:
You say it in a lot more linear the way that I do.
Bilal Little:
But the message is growth.
Bryan Staff:
Yes.
Bilal Little:
Okay.
Bryan Staff:
The message, exactly.
Bilal Little:
Okay.
Bryan Staff:
The message is growth because you need capital to grow. Capital is fungible. So, merchant is there with either debt or equity or a hybrid security that is beneficial to the transaction, provides alpha to the business owner, right? Because if they're sitting around all day long not managing their clients and they're models and they're looking into how to finance it and talk with different banks out there, there's a lot of opportunity costs.
Bilal Little:
Yeah, for sure.
Bryan Staff:
Right? So, what we do is our team comes in and we say, "Look, we've got opportunities together. Let us run the rel val, let us underwrite it." Merchant is very, very well capitalized. We have any ability to finance growth in any medium that we all believe is appropriate in a tax advantaged way. And again, that's the edge, that's the alpha. This is a very important point. Equity is incredibly expensive. We know this, right?
Bilal Little:
Absolutely.
Bryan Staff:
And I think equity gets thrown around and people are, "I want equity in the business." Well, okay, but here's what I have to go through. Here's what I have to prove to an advisor that runs their own business. If I'm buying a 20% stake in that business, there's 20% that they're giving up. If I can't come in as a valued partner and get them at least that rate of growth or that rate of multiple expansion, or that rate of capitalization that leads to ultimate enterprise value, that's greater than the amount of foregone equity, then they made a bad decision. So, I have to prove myself every day of the week, every day of the month, every day of the year.
Bilal Little:
How many partner firms is now a part of the merchant ecosystem?
Bryan Staff:
Sure. There's around 120 firms, both domestic and international. I'll give you the breakdown real quick, both domestic and international. There is more now, but let's go with 300 billion in ecosystem AUM. But there's a nuance there Bilal, and I'll explain it. Oh, just to backtrack real quick. We're all throughout the United States we've in the last couple of years made a pretty big play into Australia. It's a very interesting market. Not a lot of major banks, they all pulled out. So, it's an air war ground war down there. But the wonderful people, and we have an incredible team down in Australia. They really are. We're in Western Europe. We've got intentions to be in Asia, we're in Canada and we're throughout Latin America-
Bilal Little:
Wow.
Bryan Staff:
... which is very interesting in and of itself because you got to think about the different regulatory regimes. You got to think about currency when you repatriate. You don't want to take currency risk. The risk you want to take is on the business, not on the currency side. I actually learned that at Brown Brothers Harriman down the street.
Bilal Little:
So, explain the nuance between the 300 billion. That's what you were going to.
Bryan Staff:
Yep. So, the firms are, it's a very heterogeneous environment of businesses. Some of them reside on IBD chassis or even in chassis at a warehouse has an independent platform. Wells Finite, perfect example. They're wonderful partners. We love working with them. So, RIAs that roll up to the corporate RIA of a broker dealer, IBDs, OSJs on IBDs, and then insurance-owned broker dealers and insurance-owned practices and hybrid firms and fee-only firms that are fully independent that are utilizing the services of a Goldman or a Fidelity or a Pershing or a Schwab.
Bilal Little:
So, what I get is you have visibility into, I would say the spectrum of wealth?
Bryan Staff:
Even more so when you take into account the fact that in addition to the 120 firms, we've built out a services side of the business called Merchant Advisor Services, used to be called Merchant Business Consulting Services. When you invest, you partner with firms in a specific vertical independent wealth, what you quickly realize is you want to be involved in those vendor partners or service partners that help drive the growth of those RIAs.
Bilal Little:
Of course.
Bryan Staff:
So, early on, we invested...
Bilal Little:
Yeah, supportive services.
Bryan Staff:
Exactly. So, we invested in a business called AdvisorAssist out of Boston largest regulatory and compliance firm in the country. Republic Capital Group. It's an investment bank, not only for RIAs, B2B sales, but also they can work with end clients.
Bilal Little:
It's a client service business.
Bryan Staff:
I mean you and I could talk for three hours on this.
Bilal Little:
It's a client service business. Yeah, for sure.
Bryan Staff:
Obviously, we were talking about ETFs earlier and how they're nimble and some of the different tax advantage strategies that you can utilize for. We were getting very detailed, but tax advantage strategies that you can utilize for individual securities in an ETF format. But when you get to these businesses-
Bilal Little:
You realize, yeah-
Bryan Staff:
... regulatory and compliance.
Bilal Little:
... there's some service models that need to be had.
Bryan Staff:
Exactly. FinLink, which is the largest marketplace for advisors to buy and sell practices. So, you've got 300 billion or so of directly owned AUM for the benefit of the clients, but AdvisorAssist has purview over 500 billion of AUM.
Bilal Little:
Wow.
Bryan Staff:
Republic Capital Group is hundreds of millions of deal volume. FinLink has over 50,000 advisors buying and selling and communicating with each other. So, when you look at the ecosystem, I like to think of it as concentric circles. In the middle are the businesses that we've invested in our partners.
Bilal Little:
Mm-hmm, your nucleus. Yeah.
Bryan Staff:
Yeah, the next circle through merchant credit partners, which is our non-bank lending facility because we wanted our firms to have an alternative to the standard banks that are out there, right?
Bilal Little:
For sure.
Bryan Staff:
It's a bit more nuanced, it's more collaborative and strategic. It's not just a covenant cage and a model, right? The firms that we've lent to, because obviously when you sell equity, you can't continue to sell equity. You dilute yourself, you need debt to grow.
Bilal Little:
One hundred percent.
Bryan Staff:
Then there's merchant advisory services, and then what's probably the most interesting to you obviously is we brought over one of our partners, Matt McPeak, who used to run alts at Blue Owl. And so, we're now building out an asset management business that we were only able to do it when we hit scale in size because now we can go out to portfolio managers in this space and we can say, "We have a billion dollars of appetite for that tactical fixed income strategy, right? Can we have a sidecar vehicle? Can we do this in a manner that mimics the public vehicle, but offers our clients a bit of a fee break, right? Because if you're going to do anything like that, you want it to be beneficial to the clients, you still want to be a good fiduciary.
Bilal Little:
Absolutely. So, it's funny, I want to refine this and bring this in a little bit. So, you have purview into what your advisors are holding and what they're doing to a certain extent, meaning what does your business model look like, right?
Bryan Staff:
Yes.
Bilal Little:
Just generally speaking, when an advisor brings their book of business to you, what are some of the questions they're asking to say like, "okay, I don't necessarily know if this is a partnership I should explore or not?" What questions?
Bryan Staff:
Sure. Look, the first thing that anyone is always going to ask, or maybe not outwardly, but they're going to assess is culture, friendship, partnership, right? I mean, look, I'm 50 years old going on 60 and you and I know there's been a lot of up and downs, especially over the last couple of years, and no one wants to wake up in the morning and not have fun. Sometimes, you have to. There's positive externalities, there's also negative externalities to that, but it's usually around six months for us to bring a deal to fruition or a transaction or if you want to make it more humanistic, a relationship to fruition. You have to enjoy who you're working with first, especially because a people business, right?
Once you come to that determination, then obviously you're going to start talking about numbers. They've got to open up the kimono. We need to be able to assess the business, because we want to see where are the lines that we can draw to growth objectives. Is this a situation where, and we can put some debt on the balance sheet and utilize it for the purpose of growing the business and acquiring other advisory firms, or partnering with other advisory firms. So, you really want to dig in from a financial perspective when you're underwriting the business, you want to look at relative value. You want to see the business can support.
You want to build out a pro forma model on the business, and you want to be conservative and you want to understand all of the different things that can be done to you and not just for you, right?
Bilal Little:
That's a great point.
Bryan Staff:
To your point, because this is where it ultimately goes, and it's really interesting is what...
Bilal Little:
You're leading right into my question. I said my final question was going to be what does the business look like over the next 10 years?
Bryan Staff:
Right. So, this is a precursor to that, but then it's nuts and bolts. I mean, you don't want to look away from the fact that you're purchasing an equity position in someone's life's work and it's an emotional decision on their side, and it's a financial decision on their side, right? Like we spoke about before, if they're selling a minority position, they need to know that merchants going to come in and work with them to offer returns greater than that of the equity that they sold.
Bilal Little:
Absolutely.
Bryan Staff:
But you can very quickly figure out, you can decipher the motivations of an individual in that discussion. Because if it's all about the check, if it's all about, I just want the highest check and that's all I want to talk about, then they're not seeing forest through the trees. They're not being pragmatic and the term merchant, right? Merchant evolved from our understanding of the renaissance, of antiquity, of individuals who were able to take goods and services and launched them right throughout Europe at that time, where there was an enlightenment going on. That's what we aim to do. If it's all about the check, the conversation usually starts right there, stops right there.
Because the point that we like to make is if we do things right, you're going to have multiple bites of the apple. And we're going to make sure that we do that and we're going to give you the opportunity, not the mandate to participate in anything we do from an opportunistic refinancing standpoint.
Bilal Little:
Here's partnership.
Bryan Staff:
Absolutely, here's the point. Billion dollar firm is in discussion with us to partner. We come to an agreement, any type of negotiation, if it's Bryan and Bilal and it's whether we're buying a beer for each other or we're starting a business together, no one should walk out of any negotiation ecstatic, and no one should walk out feeling that they just were had. Everyone should believe that they put a little bit on the table, but we wiped our hands of it. Now let's go build a great business. You're a billion dollars now. Okay.
If you're going to fight over a few turns of multiple right now, you're not looking at the fact that we're going to build this business to five billion in three years and then we're going to garner a higher multiple. And then there's another bite of the apple, and then maybe we're going to bring in some other advisors. We're going to professionalize the business. We're going to scale it out. There's a massive secular movement. Now everyone understands the secular trend of succession, but not only succession in the independent wealth space, succession in society. I mean, we obviously know this. We work in it every day. Massive-
Bilal Little:
Opportunity-
Bryan Staff:
... opportunity-
Bilal Little:
... and service model that needs to be built.
Bryan Staff:
... but also the transfer of wealth to gen two, right?
Bilal Little:
Yeah.
Bryan Staff:
So, you now have to be able to take advantage of the beneficiaries of the clients and the assets that you're managing. If you're not doing that, massive, massive business devaluation. If we look at a firm for instance, and we say they're not doing any insurance or financial planning, my interpretation is you don't care about gen two because God forbid, there's a death event and New York Life was in there and they sold the policy and you didn't do anything. So, when the children of the deceased get the knock on the door and they say, "Your parents trusted us, I hope you do the same. By the way, here's $5, $10 million from your parents' estate." Who are they going to work with?
The advisor to the parents who didn't care, or to the insurance agent at that point, who put in place the policy?
Bilal Little:
You just validated the most significant thought in my mind that we will have to talk about in part two, and I'll hold you to that.
Bryan Staff:
A hundred percent.
Bilal Little:
I need you to wrap and answer one important question for me.
Bryan Staff:
Yes.
Bilal Little:
What makes you tick outside of this business to where you get to wake up and be your very best self?
Bryan Staff:
So, that's probably changed a lot in the last couple of years. I'm blessed to be with you and to establish these friendships in the industry. That has always kept me going, but I got to the point a couple of years ago where I was really satiated with everything that I had been doing in my life. Son was healthy, wonderful wife, a wonderful family, and I really believed that that I had helped build a business with a group of partners that I absolutely love. You know all of them. They love you too, and things were great. And in the switch of an eye, wasn't feeling well, and you and I have spoken about this and was diagnosed in May of 2024 with multiple myeloma, which is a blood cancer.
In the blink of an eye, you go from everything is great, and I know what my objective is for the rest of my life, and now it's incredibly difficult to face mortality for the first time. And to say to yourself, have I done everything to put my family in the best place if I'm not around anymore? Have I put my partners on steady footing? Not that they need me, they would do just fine without me, but have I done everything I could for the business so that if I'm not around anymore, it can still flourish and grow? And thank God things worked out and it worked with amazing doctors.
And knock on wood, it's never going to go away or maybe it will, but blood cancer is pervasive and it sticks around and you have to live your life in a very healthy way. The one thing I will say to you is that with all the human biologists that I go to see and all the supplements that I take to try and look somewhat like our good mutual friend, Brad Moss and our partner who's...
Bilal Little:
That's Billy D. Williams right there.
Bryan Staff:
Billy D. Williams. Billy D. Williams, looking like a linebacker. But the one thing that will keep you healthy is happiness and an understanding that if you left the earth tomorrow, you left a legacy. And people, for me, honestly, if people say staff, Staff, he is a good guy, he was a smart guy, he built some businesses and he made a lot of other people happy, but most importantly, he took care of his family and his friends, then I lived a pretty good life, and I can look in the mirror and do that. And I will tell you, and I'll finish by saying this, you talk about legacy.
When I got out of the cab this morning and I walked down Wall Street, and I reminisced about where I've been over the last 30 years from Brown Brothers Harriman, just down the street and walking by this iconic building, if you would've said to me back then that I'd be interviewed by Bilal Little and that we'd be having conversations about the business that you run here, the ETF business, which we got to get into in round two because it's massive, I'd tell you that you were crazy, but I'd have a huge smile on my face just like I do now. So, I appreciate you having me here and this was a thrill for me, and I'd love to come back and do it again, buddy.
Bilal Little:
Thank you so much, Bryan.
Bryan Staff:
All right.
Bilal Little:
Appreciate you.
Bryan Staff:
Appreciate you.
Speaker 1:
That's a wrap for today's conversation, but the ETF discussion doesn't stop here. For more insights, deep dives and voices shaping the market, stay connected on etfcentral.com. From the New York Stock Exchange, we'll see you next time. Information contained in this podcast was obtained in part from publicly available sources and not independently verified. Neither ICE nor its affiliates make any representations or warranties expressed or implied as city accuracy or completeness of the information and do not sponsor, approve or endorse any of the content herein, all of which is presented solely for informational and educational purposes.
Nothing herein constitutes an offer to sell, a solicitation of an offer to any security, or a recommendation of any security or trading practice. Some portions of the preceding conversation may have been edited for the purpose of length or clarity.
