DeLynn Zell left First Financial Group, an affiliate of Lincoln Financial Group, with Henry Ware and Wayne Harris in 2008 and together they launched their own registered investment advisory firm Bridgeworth Wealth Management. The co-founders, along with a handful of other former FFG employees who joined them, were motivated to build a sustainable, legacy business for their families and employees, helped by the growing affluence of Alabama's technology and defense industries.
Bridgeworth now has an office in downtown Birmingham and another in Huntsville, Ala., which has been called the Silicon Valley of the South for its thriving high-tech, start-up scene. Three of its original partners have retired and passed their torches to a succession of younger advisors groomed for the handover. According to Zell, 56, the firm has grown to $2 billion in AUM with an average annual increase of 17%. Through its hiring and recruitment, Bridgeworth amassed a staff of 53 and it’s first and only acquisition so far occurred in 2012 when it bought PinOak Advisors, an RIA ran by Pete McCarn.
When the group left FFG, the advisors still offered brokerage and investment advice through Lincoln Financial. But, in 2012, Bridgeworth left Lincoln Financial’s brokerage and RIA platform to become an RIA with brokerage services offered through LPL Financial.
Though Birdgeworth has reached its initial goals, the firm isn’t done. Zell sat down with WealthManagement.com to discuss its growth plans through further acquisitions, a new program for Alabama’s HENRYs (high earners that are not rich, yet), and how it weathered 2020.
WealthManagement.com: What makes Bridgeworth unique in Alabama?
DeLynn Zell: We are an ensemble practice. I don't know anyone else our size with our structure. We have 10 partners and 11 other advisors and associate advisors overseeing $2 billion of assets.
It’s not often this many people can come together and give up ownership of their practice in exchange for shares of the firm.
We did that for three reasons: One, it was in the best interest of our clients and employees. Clients are owned by the firm, not advisors so it prevents the types of breakups you often see in other professional firms. If somebody wants to leave here, they leave, but they don't take their clients. Secondly, we have a built-in succession plan for partners for retirement, death or disability which is great for the advisors and client. Lastly, ownership in a firm our size is far more valuable than that of an individual practice and our firm’s growth rate is higher year over year than most individual practices.
We focus on the growth of the firm, not the growth of individual practices and advisors. So, I would say that's fairly unique.
WM: How have you structured Bridgeworth to be a legacy firm?
DZ: When partners are getting ready to retire, there's a two- or three-year window where they're bringing in junior advisors to meet with their clients. We already have the financial aspects of that succession worked out so it's a very seamless transition.
The same's true if there's a death or disability. I've read horror stories lately about people in our industry who've gotten COVID-19 and didn't have these things in place. That's never good for the client.
The other partners—God forbid something happens—they have a team of people working with them. There’s a junior advisor on the team, a separate investment department and we have a separate planning department. Those clients are serviced by a team, not just one person.
WM: Do you see yourself being acquired one day?
DZ: I've learned to never say never. I don't know who would have, a year ago, envisioned what we're dealing with today.
We are set up to be an acquirer. If one day we decided to join forces, it would have to be with somebody very like-minded. We're not interested in being acquired by a consolidator just to add to their assets and to the bottom line.
One of our primary goals in forming the firm was to leave a legacy and pass the leadership and ownership down to the next generation we've built. But a lot of these firms haven't built that infrastructure to be multigenerational. They just built assets, and they don't have the next generations coming behind to take over. That's what we've done successfully [and] we're investing heavily in those people.
But there is a lot of acquisition and I recognize we are in that target market. I get calls all the time. I jokingly tell my partners we could sell it by Friday if we wanted to do so.
WM: What’s your acquisition strategy for 2021 and requirements?
DZ: We have positioned ourselves this year for a couple of acquisitions that we’re eyeing. The pandemic has caused smaller firms to realize size and infrastructure are important.
There are a lot of firms out there that acquired practices just to put together a large group. They don’t have a shared culture or vision but rather banding together to access technology platforms and share in overhead. We don't do that because we're all about quality, not quantity. We all follow the Bridgeworth name and it has to be people we want to be in business with and who have the same mentality—I don't care how many assets they have.
We have high educational requirements: Everybody here is required to be a CFP or CPA. Planning is at the core of what we do, so all of our clients go through our planning process and are charged a planning fee and a separate fee for asset management.
WM: You’ve designed financial services for professionals who fall in the HENRY (high earners, not rich yet) category. Can you talk more about it?
DZ: Many firms have minimums and we do too. But we wanted to figure out a way to get those [individuals] who we know would be target clients later in life but need planning now. So, we created a separate program called Bridgeworth Access. Let's say you help a young doctor or maybe it's a young lawyer who's on track to make partner. They may not have the assets for five or six years to manage, but they need advice; they need help setting up the kid’s college fund, helping them manage their 401(k) and buying that first house.
Just because they don't meet our million-dollar target minimum today doesn't mean we don't want them as a client. Minimums are important to run a profitable firm. but we don’t want those target clients to go someplace else when they need advice now. Therefore, we can bring them in under that program which provides basic coaching and planning program until they meet our minimum. They then move over and become a client of Bridgeworth Wealth Management.
We’ve added five new advisors in an entry-level position. Some firms call them a paraplanner, but we call it a planning coordinator. When they advance to what's called Associate Advisor (only after they get their CFP), we'll ask them to handle someone in the Bridgeworth Access program because many times they’re in similar stages of life and can help.
WM: When did you start that program?
DZ: We started that about four years ago. This past year, we had a 30% to 40% percentage jump into the Bridgeworth Access program, at least.
WM: What were Bridgeworth’s goals for 2020 pre-pandemic and how have they changed?
DZ: My focus for 2020 was finalizing some internal changes. We rolled out a new compensation plan for our lead advisors and new folks coming in, a new client engagement process and pricing on our financial plans.
And we moved our headquarters downtown into an 18,000-square-foot facility. We were going to use that facility to do a lot of marketing, a lot of business development, bringing people into our office. Then the pandemic hit.
I lied awake at night, thinking, ‘Oh, my word. We've just invested in this gorgeous facility and nobody's going to want to come to work anymore. They’re going to want to work from home in their pajamas.’
I lost a little sleep, but then one day I realized what our design is. Everybody has private offices. We built a 2,000 square-foot multi-purpose room to host events, but we've been using it to meet socially distanced with masks.
Even in the pandemic, we had a great year. We had a 10.5% growth in revenue. Last year, we hired five new people. I saw some firms were kind of paralyzed there for a while, not knowing what to do. We beefed up our marketing, beefed up public relations, hired people, provided and added some services, and we continue to grow. We’re fortunate that the market was good to us last year.
This article was updated with information regarding DeLynn Zell's role at Lincoln Financial Group and Bridgeworth Wealth Management.