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The Bear Stearns veteran deliberately chose Uber-, Twitter- and Dolby-adjacent offices in a trendy San Fran neighborhood
September 14, 2015 — 6:01 PM UTC by Brooke Southall
Brooke’s Note: This article was a first for me in that I was invited into the office of a breakaway broker who was just hours removed from life at the wirehouse, in this case, J.P. Morgan. The walls of his new San Francisco space were mostly white and bare. Wires hung treacherously about. The guard downstairs wasn’t 100% sure I had the right place. But I was also intrigued by the fact that this person is also restaurateur and I simply wanted to see for myself what kind of a human being could straddle those two worlds — apparently more than successfully. David Steele did not disappoint. He looks more Hollywood than Wall Street with his Don Johnson-like two-day’s growth of facial hair, a buzz-cut at his temples and more abundant hair atop his head. Steele has a restless quality that makes a reporter fear that a boring question might trigger a trap door to open under his feet. Still, there was a warm humility underlying it all, even a vulnerability, that makes it evident why Steele is compelled to try so hard on so many levels of the life game. His story should also be affirming for other financial advisors in that although Steele owns blonde-wood restaurants populated by the hip and beautiful, he sees financial planning as his ultimate creative challenge.
Lily Tomlin used to do a routine about the drudgery of toiling away as a successful actress until she got the job she really wanted: head waitress at a Howard Johnson’s.
David Steele’s story is a variation on that reverse-commute dream. For him, opening six acclaimed restaurants in six years in America’s most competitive “foodie” city wasn’t an end — it was the warm-up for embarking on his bigger dream of starting his own RIA — One Wealth Advisors — under the Dynasty Financial Partners umbrella.
Growing up in Philadelphia, Steele, now 48, earned a Bachelor’s degree in business administration from the Fox School of Business at Temple University then moved to San Francisco and went to work for Bear Stearns before it was sold for scrap in 2008. Steele then became a financial planner at J.P. Morgan Securities, the wealth management division of J.P. Morgan, which absorbed Bear Stearns’ 500 brokers. Steele becomes literally misty-eyed recalling Bear Stearns’ entrepreneurial culture and how it was a place where what school you attended hardly mattered. See: How Raymond James finally landed a big Bear Stearns team after JP Morgan retained and detained it for six years.
He has worked closely with his brother Jonathan, 42, for the past 17 years, who worked as a chef at top Philly restaurants before moving to San Francisco and switching careers. (Jonathan has virtually no involvement with his older brother’s restaurants.)
But for all David’s success in restaurants, something wasn’t quite right.
“I still wasn’t an entrepreneur in what I was best at,” Steele says. “Nobody knew that.”
How hard could it be?
Steele opened his first restaurant, Flour + Water, serving Italian cuisine, in 2009. The eatery gained favorable notice on both coasts, and Steele, as managing partner of Ne Timeas Restaurant Group, followed it up with bars and restaurants including Central Kitchen, Salumeria, Trick Dog, Aatxe, and Cafe Du Nord.
Opening a chic restaurant is a notoriously effective way to blow some money in style — all that design, food and panache for elegantly dressed patrons flashing American Express cards. Figuratively — and sometimes literally — the owner’s name is in lights. But for every sweet dream like this one, so many more turn to nightmares after the chef quits, the landlord doubles the rent, the health department finds roaches or the cash going into the till never makes it to the bank. Owners burn out.
But Steele had worked in restaurants during high school and college. Managing them was easier for him than managing wealth. So if the best practices in the hospitality industry are such universal concepts then why are restaurants so volatile?
“I just don’t think people apply them to restaurants,” says Steele, who attributes his success in both venues of business to the careful formation of partnerships where identifying good partners and “celebrating” them is paramount. He is in the process of writing a book on this topic called: “The Power of Partnerships.” See: Why a $6 billion New York RIA is finally making its California debut. He is also co-writing a play — “Vignettes on Love” — and takes in 30 to 40 plays a year.
One Wealth manages $300 million of assets and advises on an additional $200 million. Aside from his brother, Steele’s key partner in One Wealth is New York-based Dynasty. He briefly considered Focus Financial Partners LLC and carefully considered HighTower Advisors LLC. Peers, he says, consistently rated Dynasty as tops, adding that the ownership structure at HighTower was not to his liking. See: How Tony Robbins co-opted Elliot Weissbluth (and HighTower data) and vice-versa.
Steele’s new office on Market Street is nearby most of his eateries — Cafe du Nord is just blocks away — though not by design. Rather, he chose the seedy but trendy spot between 7th and 8th streets for its proximity to the headquarters of hot startups Uber, Twitter and Dolby, hoping for an “osmosis” effect. Steele lives a block from the office with his pet Rottweiler, Jo Jo.
I arrived late for my interview, getting a bit lost because of a nearby street that was blocked off due to a film shoot. Hearing of the delay, Dynasty sent its media rep, Sally Cates, on ahead to ensure that Steele’s Uber ride didn’t leave without him en route to his next interview.
After the interview, on the elevator ride down to the colorful lobby area, Steele peppered me with questions about RIABiz and how I came to start it up. In that less-formal atmosphere, he also asked me whether I’d ever met Shirl Penney and I let him know I had. Steele’s decision to make the leap to independence really boiled down, he said, to sitting face to face with the founder of Dynasty Financial and hearing his pitch and pep talk. See: The inner orchestration of Dynasty, Addepar and Pershing/BNY Mellon it took to harmonize a $1.4 billion Merrill Lynch family office team.
West Coast wealth
Steele speaks in superlatives describing the transition form J.P. Morgan to Dynasty.
“It has been the single greatest experience of my life,” he says, in large part due to a factor he hadn’t anticipated: the degree to which his clientele — mostly technology entrepreneurs — exulted in his move from Wall Street. Those clients have assets with him ranging from $1 million to $25 million and consist of corporate executives, retirees, small business owners and foundations. Steele insists that he is not looking to create a substantially larger practice.
Steele says he advises a defined client niche — those who cashed out their valuable stakes in technology companies in order to live enjoyable, fruitful lives rather than seek second act in business. His most loyal and grateful clients are the ones he convinced to cash out of the late 90s dot-com boom before their shares became worthless after the 2001 tech crash.
“At Dynasty, we are seeing significant growth on the West Coast in the independent space,” says Austin Philbin, senior vice president of client service, who leads Dynasty’s West Coast office based in San Francisco. “The message of advisor independence resonates in California— both with advisors and with their clients. David, Jonathan and their team are in the forefront of the movement toward independence on the West Coast.” See: Why the San Francisco Bay area is almost certainly the capitol of the RIA business. This RIA is only the second West Coast client for Dynasty, according to a spokeswoman.
That West Coast presence for Dynasty includes: True and Cable Hill in Oregon, and Intellectus and Summit Trail in San Francisco.
Joining the Steele brothers at One Wealth are Alexander J. Schmitz, director of financial planning; Kevin M. Cohen, director of operations; and Samuel A. Stephens, senior client service associate — all of whom hail from from J.P. Morgan. See: JP Morgan gets a 39-page blasting of its corroded culture and ground lost to Silicon Valley robos — authored by its CEO Jamie Dimon.
In addition to his RIA and the restaurants he owns, Steele has done consulting for five other successful California restaurants, all of which he says are still in business. And, by the way, Steele is building up a chain of yoga and fitness studios, Moxie Yoga & Fitness Studios, the third of which is launching now, and is a partner in major food and music festivals in the Bay Area, including Treasure Island Music Festival and the San Francisco Street Food Festival.
So Steele is a workaholic, right?
Not at all, he says. Steele makes a religion of not working more than 40 hours a week, a logistical feat he attributes, again, to strategic partnering and a non-liberal definition of work. The snow boarder, mountain biker and all-around life-gorger has never been married but he is still looking for the right partner.
Mentioned in this article:
Dynasty Financial Partners
Consulting Firm, Specialized Breakaway Service, RIA Set-up Firm
Top Executive: Shirl Penney
Fidelity Clearing & Custody Solutions
Top Executive: Sanjiv Mirchandani
Top Executive: Jud Bergman
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