Ex-football star launches new OSJ as Securian pitches indie offerings
A former college football star who has spent the past dozen years as a financial advisor is launching a new office of Securian Financial.
Michael Sheppard finished his North Dakota State University Bison career as the powerhouse FCS program’s leading career solo tackler in 2003 and later signed with the Tampa Bay Buccaneers. He joined Securian in February after four years with Principal Securities.
Sheppard will operate Milwaukee-based Ironwood Capital Group as one of roughly 40 Securian independent broker-dealer affiliates functioning as offices of supervisory jurisdiction for its 1,100 advisors, according to Tony Martins, Securian’s vice president of career distribution.
Twin Cities-based Securian shares the same parent firm as several insurance firms. While many have been spinning off their IBDs in recent years amid tightening margins and rising expenses for compliance and technology, Securian’s IBD remains a separate, independent subsidiary.
The setup makes Securian different from other insurance-affiliated IBDs that are “run by the manufacturers,” Martins says. The company has no quotas for the insurance affiliates’ proprietary products and product-neutral incentives for advisors.
Indeed, Sheppard aims to hire about four to six “planning-based advisors” per year who are fully licensed and are CFPs or are willing to pursue becoming one. Sheppard has been a CFP since 2011, and Securian has more than 200 CFP advisors.
“The opportunity to have my fingerprints on the blueprint and the startup culture — it was more attractive than, say, taking over an agency where the culture is already established,” Sheppard says. “You hire the right people who have the right focus and appreciate an organization that begins with the client first.”
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Representatives for Principal didn’t respond to requests for comment. Principal generated $299.6 million in revenue in 2017, making it the No. 22 firm on Financial Planning’s most recent annual FP50 list of the largest IBDs. As the No. 20 firm, Securian produced $346.4 million.
Sheppard affiliated with the firm on Feb. 26, according to FINRA BrokerCheck. His 12-year financial services career also includes tenures with Northwestern Mutual and Northern Trust.
He has a retirement-plan book of business with medium-sized firms between $5 million and $50 million in assets, he says. Securian supports entrepreneurial advisors who grow their offices and the wider network with the help of the IBD firm’s resources, Martins says.
“We pride ourselves on being able to bring the right people into the business and to help them build the business,” Martins says, noting high retention of the firm’s advisors. “The way to do it is to be very selective on who we bring in. We don’t do the mass recruiting. We look for the right people at the right time.”
In addition to common industry conflicts of interest such as 12b-1 fees, program sponsorship agreements and arrangements from strategic partnerships, the latest SEC Form ADV from Securian’s corporate RIA discloses incentives relating to the IBD and its affiliates.
Securian advisors receive credits entitling them to reimbursement for expenses related to the firms’ promotional conferences, along with other non-cash benefits which may cost clients more and compensate advisors more than some available alternatives, the ADV brochure states.
“The amount and/or structure of such compensation may influence your financial advisor to favor certain investment options over others,” the document says.
In a follow-up email about the ADV disclosures, Securian spokesman Jeff Bakken wrote that the firm “does not require the sale of proprietary products for an advisor to qualify for non-cash compensation.”
“Our structure is product-neutral,” Bakken says. “We currently have advisors who sell zero ($0) proprietary products and qualify for non-cash compensation as well as those who sell a large amount of proprietary products, and the range in-between.”
Sheppard named his new office Ironwood after the street near a military base where his family lived after his father returned from military service with post-traumatic stress disorder, he says. It was also after the deaths of his biological mother and a sister who later adopted him, he says.
He wanted to “honor my mother and my sister who raised me,” Sheppard says.
The former Division II NDSU Bisons moved to Division I the year after Sheppard’s senior season, in which the strong safety and defensive back led the squad with 83 tackles, including 11 for loss. The Bisons later won five straight FCS championships between 2011 and 2015.
Similar merit-based measures of success in the two fields — as well as Sheppard’s aspiration to make financial tools available to clients that could have served his family well when he was growing up — drew him to the industry after his football career, he says.
“I've had the opportunity to work at some really good companies,” Sheppard says, praising the new partnership with Securian at his Milwaukee office. “It allows me to build something where we can really do something special in this community and beyond.”