Fairness and honesty provided the twin North Stars for Bill Sowell’s professional journey
(Photos by Dwain Hebda)
In 1990, freshly bought out of the travel agency that was his first entrepreneurial venture, Bill Sowell gravitated to the financial planning business. His natural way with people and a burning desire to succeed matched the job ideally save for one nagging thing: Sowell disliked the commission structure by which he was paid, not because he thought it did not provide enough earning potential, but because of how he felt it cast him in his clients’ eyes.
“I never liked the commission system. I always felt like there was an inherent conflict of interest in that,” he said. “The company I started with presented themselves as being independent, but like most of the larger broker-dealers in the business, they had a way of influencing how you did business.
“They did that by saying we have all these products and services, and if you use ours, you get paid X, where if you used the others, you get paid Y. It put me in the position of even if I felt like this product was better, I’m gonna get paid more by selling that. That was something that, you know, you don’t really understand when you get in the business, but once I did and I started figuring that out, I just didn’t like it.”
Sowell could have been forgiven for shrugging the situation off as just the way the game was played, or his conscience could have been such that he abandoned his career before it even got started. He chose neither, opting instead to adopt a fee-based system that did not incent purchase of one product over another, even if he had to go out on his own to do it. The audacious mission was noble but hardly assured.
“My first concern was I’m leaving a large, well-known brand to go out on my own,” he said. “All right, well — is anybody gonna follow me?”
If there is one thing Bill Sowell has never had to worry about in his life, it is the desire people have to follow where he led. His parents’ divorce instilled a mentality of greater responsibility and self-reliance than his peers and a fundamental confidence that he has carried ever since. That mentality expressed itself in several ways, most notably in athletics. Sowell was a play-everything kind of kid while attending the old Northeast High School in his native North Little Rock.
“I was always more of a leader type, and I didn’t really set out to be that way. I was a good athlete, and I always tended to end up being one of the team captains or just more of a leader in general,” he said. “Maybe it was just my personality; I certainly didn’t mind voicing my opinion about things, and it just seemed like it came relatively easy for people to want to follow me for whatever reason.”
Sowell attended what is now the University of Arkansas at Little Rock but left short of earning a degree to accept a job with the airlines. During his decade in the industry, deregulation arrived and sent the competitive landscape into upheaval. Sowell moved 10 times in 10 years, and four different airlines were shot out from under him by bankruptcy along the way.
Looking to gain more control over his career, he stepped out of the maelstrom to form his own specialty travel agency, All Sports Travel, by which he arranged travel packages with, among others, the National Football League’s Dallas Cowboys and Major League Baseball’s St. Louis Cardinals. He sold the business in 1989 and started looking for his next challenge.
“Financial services was an industry I’d always been interested in,” he said. “I like helping people, and I thought this would be a great way to not only help myself but also help others plan for their futures.”
On one hand, Sowell had a ready roster of prospective clients from the customers he had served through the travel agency. On the other hand, he said, it was a tall order to convince them he was just as capable of managing their money as he was of getting them to the big game and back. Undaunted, he forged ahead and was soon a top producer.
“All the people that I called on knew I was new in the business, but I relied on the support of the office I was in and the people that I really connected well with,” he said. “In this business, that’s pretty common; you tend to do more things jointly when you’re new where you’d bring somebody else in and split the business, so early on, especially with my bigger clients, I was more of the lead as far the relationship, but I depended heavily on other people around me for the detail work that takes years to really learn.”
By 1995, however, when Sowell was ready to launch his grand experiment, there was precious little by way of backup or a safety net. By his own estimation, less than
1 percent of the industry at that time followed a fee system. However, he was determined to prove there was a path to great success that did not feel like compromising one’s principles or abandoning one’s fiduciary responsibility.
“I’d met the person that had the most influence of me over in this industry, Allan Mendel, who unfortunately passed away a few years ago. He and I got to be really good friends,” Sowell said. “He ran a large trust department, and it’s always been common for bank trust departments to do everything on a fee basis.
“The more I talked to him and the more I learned about it, the more it became apparent to me that, OK, well, there is another way to do this business.”
Sowell did not have long to wait for proof of concept — the marketplace responded resoundingly.
“My clients loved it,” he said. “Once I explained to them what I was doing, my clients really cared and appreciated what I was doing and how I was doing it. That’s when I realized the depth of the relationship I had developed with them. I was amazed.”
Sowell eventually bought out his partner and friend Mendel, and in 2001, he and his wife, Cindy, formally organized the company as Sowell Management. Over 23 years, they have grown the firm to 91 advisors, as well as registered independent advisor firms, offices in 35 states, and more than $4 billion in assets under management or advisement. The firm serves clients in all 50 states, Washington, D.C., and Puerto Rico.
The company grew at such a breakneck pace that the industry had no choice but to sit up and take notice. As reported in Arkansas Money & Politics earlier this year, Sowell Management has been nationally recognized multiple times as a top RIA by The Financial Times and Barron’s, and last year, SHOOK Research, in partnership with Forbes, ranked Sowell as one of the top 100 RIAs in the country. Most recently, Sowell Management was named a top-three SEC-registered RIA firm in the United States by the prestigious Wealth Solutions Report.
More than all that, Sowell is regarded nationally as a visionary whose pioneering belief in the fee-based system as a more ethical alternative to commission sales led to its adoption by thousands of other firms across the industry. Even so, he said, it is just the beginning.
“Concerning the fee-only side of the business, I don’t think we’re even at first base,” he said. “There’s so much more room for growth, it’s unbelievable.”
Opportunity or not, a person who has made his fortune on numbers the way Sowell has cannot escape the most fundamental element on an actuarial chart. At 67, he is in the later innings of his career and is putting considerable energy into planning what happens when he steps aside. He does so with trademark optimism, knowing that when the day comes, the firm will be carried by the capable leadership team he and Cindy have built, a team that includes their children, Abby and Evan, who, like their parents, are staking their claim in the family business.
Looking around the company’s North Little Rock offices, there is a lot to be proud of in house and even more so outside in living rooms and offices and across dinner tables of clients from one end of the country to the other.
“This business really hasn’t changed. It’s just grown a lot,” he said. “It’s the relationships that allow you to overcome hard times, you know, when the market’s going south and people are getting ready to make the worst decision they could make, that they just need to sell and get out.
“It’s the relationships and the trust that give you the ability to calm people down and get them to think rationally. After everything else we’ve done, that’s what’s still fun about this industry to me. I love helping people.”
BILL SOWELL ON ROOTS
“Arkansas gets a bad rap about certain things, and there’s jokes about us not wearing shoes and whatnot, but the bottom line is I love this state. Especially moving around in the airline industry all those years, it made me realize how lucky we are in Arkansas. From a business perspective, is there as much money as you’ll find in some of the other areas? No, but there’s so much business in our industry, I don’t care. If you do business the right way and you treat people the right way, the business is going to come.”
BILL SOWELL ON ENTREPRENEURISM
“There’s never been more opportunity for people who have an entrepreneurial spirit, but people must first do a very good self-analysis of who they are. Do they have the confidence to go off and do something and, through thick and thin, stay on that path? There are people who can’t. They want to know that one way or another, at the end of two weeks, they’re gonna get paid versus someone like me who was always comfortable with not getting a steady paycheck. An honest self-assessment is critical for deciding if you have the personality to go off on your own.”
BILL SOWELL ON SELLING
“I think the No. 1 lesson for anybody in any kind of sales is to learn to ask a question and then shut up. I think so many people in sales are so busy trying to impress who they’re selling something to, they ask a question, and before the people can respond, they keep selling and they keep talking. I ask people questions, and I shut up and I listen, and I take notes so they can answer and answer honestly. That’s something I learned a long time ago, and I would say that’s still one of the biggest things.”
BILL SOWELL ON INSTINCT
“Most of what I’ve done business-wise has been by gut. Over the last several years we’ve started seeing all this private equity money coming in, offering to buy up firms, and there’s aggregators out there gobbling up firms like ours, cobbling them together. We’ve certainly been approached by quite a few of these firms, and the money that’s been tossed around is great, but it just never felt right. To me, you know, if something just doesn’t feel right, that means it’s time to take a step back and either not do it or do a hell of a lot more analyzing.”
BILL SOWELL ON RISK
“Anybody who has a dream should follow that dream by taking chances. Sometimes they’re not going to work out. Well, you know what? Get up, dust yourself off, and just run at it again. I guess I wasn’t smart enough to realize I could possibly fail. All I ever thought about was here’s what I’m going to do, here’s why I think it will be successful, here’s my pathway, and I did it. I never stopped to think that it could possibly fail. If you’re passionate about something and it makes sense, then how can you not be successful?”
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