Stephan Cassaday, Cassaday & Company
Firm: Royal Alliance
City: McLean, VA
AUM: $263 million
Number of Clients: 265
Education: Radford University
One week before his departure from Prudential in 1993, Stephan Cassaday's branch manager called him into his office and told him that letters had already been sent to his clients. His clients were told Cassaday no longer worked at the firm, and that a new rep would be calling them regarding their accounts. Cassaday, who thought his firm wasn't yet aware of his decision to go independent, called his wife to help move him out of his Prudential office immediately. “We loaded up the SUV and headed to my new office. It was pretty bare. We had to go to the drug store and buy some phones that same night,” he says. That evening he made calls to his clients, letting them know about his departure and his new firm.
But the transition wasn't easy. For the next month, Cassaday says he stayed up at the office until 2 a.m. getting everything in order — filing papers, dealing with account transfer forms, new account setups and even assembling furniture.
He spent all of his life savings to fund the business for the first 18 months while there was no paycheck to take home. Still, Cassaday says the switch was worth the effort.
By the third month of operation, he managed to transfer over about $40 million of client assets — 90 percent of his book of business — to his new independent shop with Royal Alliance. Since then Cassaday, 51, has increased that asset number to $263 million. How? Simple.
When the number of clients and assets got to a point where he could no longer remember every client's name, Cassaday decided to hire more help. “Our assets have grown at a compound rate of 28 percent since 1994. I was having trouble running the business while doing a good job for clients,” he says. By identifying the things that actually generated money for the firm (like spending time with clients), Cassaday was able to see where he needed to hire help for other tasks. “I realized I'd have to take two steps back financially, and hire people to do things like choosing the furniture,” he says. He hired a person to help with administrative and client services. “Trying to do everything myself was a big mistake. Hiring staff is the best investment you can make as an advisor. It really frees you up to do the things you like — and helps the business grow.”
Today, Cassaday & Company has six producing advisors and 10 support people. Cassaday's advisors each have their own books of business, and bring the firm's total assets under management to about $1.1 billion. “He provides a great blend of guidance and freedom for his advisors to excel,” says Barry Glassman, an advisor and senior vice president at the firm.