by Paul Gatling (firstname.lastname@example.org) May 24, 2023
Originally published in the Northwest Arkansas Business Journal and can be viewed online at Talk Business & Politics
A fast-growing Arkansas registered investment adviser (RIA) is planning for its next growth wave. No surprise that the strategy includes one of the country’s fastest-growing regions.
Sowell Management, the privately held firm based in North Little Rock led by founder Bill Sowell, is making waves in the financial world by opening an office in Northwest Arkansas, which is home to numerous Fortune 500 companies. The company has signed a long-term lease for approximately 5,500 square feet on the first floor of the Cooper Communities building at 903 N. 47th St. along Interstate 49 in Rogers.
The company’s market move is through acquisition. Sowell Management sealed a deal in late February to acquire Sector Grid Advisors, a financial advisory firm in Rogers that previously worked for broker-dealer Raymond James.
The acquisition brings an additional $120 million in assets under management (AUM) to Sowell Management’s newly rebranded retail division, Trek Wealth Solutions, previously known as Sowell Financial Advisors. Trek Wealth offers financial advisery services, including financial planning, portfolio management, tax and estate planning.
“Beyond rebranding and expanding, the timing of the addition of Sector Grid created an opening for Sowell Management to refine its business goals to focus more intently on merger and succession opportunities for financial advisers,” said Sowell, the CEO of Sowell Management and Trek Wealth.
As of April, Sowell Management currently serves over 100 investment adviser representatives (IARs) and 20 RIAs and has over $4 billion in AUM and assets under administration (AUA). That’s up from about $540 million in 2016.
AUM signifies assets where Sowell Management provides continuous and regular supervisory or management services to client portfolios. AUA measures the total assets for which the company provides administrative services.
A Sowell spokesperson said the combined AUM/AUA total makes the firm the second-largest RIA in Arkansas behind Stephens Inc.
Sowell is confident that its services will be well-received in Northwest Arkansas. He said the company has a proven track record of success and offers a wide range of services that can help clients achieve their financial goals.
“Growing the part of our firm that provides quality financial advisery services, backed by the connections and vast resources of Sowell Management, makes sense,” Sowell said. “We have been building toward this vision for many years, and launching Trek Wealth now is the right time.
“We wanted to make a boots-on-the-ground commitment, not only with our clients and advisers who join us but with those moving [to Northwest Arkansas],” he said. “The demographics fit who Trek Wealth serves — adventurous income earners who want help managing their money for a lifetime while living life to the fullest.”
Sowell, 66, grew up in North Little Rock and had a nose for business from an early age.
“I love building and growing things,” he said. “I’ve [always] had those analytical tendencies but would say I am stronger on the relationship side. Those two things really gave me the confidence to get into the industry. And when the opportunity came to reinvent my career, I was interested in it.”
Sowell owned a boutique travel agency in the 1980s but eventually sold the business. That kickstarted his career in the financial services industry in 1990, and success in the new field came quickly.
“In four years, I had 300 clients, many of them good-sized businesses and business owners,” he recalled. “But what I recognized was I felt like there was a different business model that would work better for me and my clients.”
Sowell is considered an early pioneer in the fee-based fiduciary investing space rather than a commission-based business plan.
“Even though I liked the business, I always felt like there was a conflict of interest,” he recalled. “If I’m telling [clients] we need to sell X and buy Y, and by the way, I’m getting paid on both sides … it felt dirty.
“I had a friend who ran one of the largest trust companies in Arkansas, and everything trust companies do is fee-based,” he explained. “In the early to mid-90s, other than trust companies, fee-based was non-existent. But the more I talked to him, the more I kept thinking, ‘That makes a helluva lot more sense.’”
Sowell converted his practice to fee-only and eventually started working with other independent advisers to convert their practices. He also managed assets for them.
“Essentially, what we created back then is today known as a TAMP (Turnkey Asset Management Program), which didn’t exist back then,” he said. “Fast-forward a few years later, I realized I needed to focus on building and growing my practice or start building the platform to support the advisers we were working with.”
He founded Sowell Management with his wife, Cindy, in 2001 with those same fee-based principles, targeting independent advisers looking to outsource their businesses’ investment and client service functions. The firm’s TAMP and back-office services appeal to advisers who want to outsource their business’s investment and client service functions and take advantage of a centralized investment and integrated technology platform.
The Sowell platform offers custodial services through Fidelity, TD Ameritrade, Schwab and SEI Investments Co.
Today, Sowell Management has 35 employees and is considered a national leader in the RIA industry. Forbes profiled the firm last year as one of “America’s Top RIA Firms,” and Barron’s, a 99-year-old-sister publication to The Wall Street Journal, ranked the company No. 87 on its 2020 list of the nation’s “Top Registered Independent Advisor (RIA) Firms.”
Bob Taylor and Tonya McKaughan, both founding partners in Sector Grid Advisors, are new advisers in the Trek Wealth office in Rogers. They’ll continue to serve their clients, many of whom they have worked with for over two decades.
“Joining the team at Trek Wealth simply means we will have a broader selection of resources at our fingertips to provide the best service possible,” Taylor said.
Taylor said another reason the Sector Grid Advisors joined Trek Wealth was to secure a succession plan.
“Our agreement with Sowell Management/Trek Wealth Solutions means there will be plans in place if the unplanned happens with either of us,” he said. “I expect the opportunity for succession planning with a company of this caliber will be a leading reason other advisers are enticed to make the same move.”
“We would have never launched this office without Bob and Tonya,” Sowell said. “We would not have come into this market and tried to do it ourselves. Bringing them in was a key element. They are super people, and they are a good fit from a culture standpoint.”
Sowell Management President Daryl Seaton speaks from experience when he says Trek Wealth’s strength is that it is backed by Sowell Management, a powerhouse company with over 50 branch offices in 38 states supporting financial advisery firms nationwide. The company’s platform provides advisers with various technology and portfolio management services that help them become independent.
Seaton is a northern California native who joined Sowell Management in 2020 as COO. He was the founder and CEO of a successful RIA, Solera Asset Managers, and utilized Sowell Management’s resources as an adviser partner since 2012. Before Solera, Seaton was the senior partner of the northern California office of New York Life Insurance Co., a flagship office for the Fortune 100 company.
“Trek Wealth is an advisery firm that’s a little bit different from others — and we’re proud of that,” Seaton said. “We believe in fully preparing our clients for retirement, but equally important is life’s journey along the way. We help make our clients’ ‘bucket list’ dreams possible, whether that’s buying a home, making memories with loved ones, taking that life adventure or throwing the best darn wedding possible.”
Seaton said Trek Wealth’s philosophy is teaching and counseling clients to provide financial clarity while aligning “big dreams with realistic solutions.”
“Our company’s mission is to provide creative financial opportunities that empower people to do more, go further and appreciate life’s journey,” he said. “That’s what we’re all about.”
Advisory services offered through Sowell Management, a Registered Investment Advisor.