From High School Dropout to Redefining Modern Wealth Management

[00:00:04] Hello and welcome back to the Startup Builders and Backers podcast. How often do we hear Startup Founder stories that follow a neat, predictable path? And how often do we hear the ones that are shaped by risk, failure, reinvention, serendipity and even sheer stubborn belief? Well today's guest is going to bring his story to life. It's one that doesn't fit the usual mould.

[00:00:30] His name is Stephen Woods, founder and CEO of a company called Stirlingshire Investments. And he joined me from Midtown Manhattan while I was recording here in the UK. And his journey stretches from dropping out of high school at 16 to working behind a bar, breaking into Wall Street during the chaos of the financial crisis and going on to build a fintech business designed to challenge the very way that wealth management works.

[00:00:57] So in our conversation today, we'll talk about what the traditional broker deal model still gets right, where it quietly fails both advisors and clients, and how incentives, transparency and technology can all be leveraged to better align trust with outcomes. And yeah, we'll also dig into the mindset shifts that happen when founders move from scarcity to scale,

[00:01:22] and why changing a broken system often means accepting discomfort before you get to the progress. Before introducing today's guests, I just want to give a big thank you to my friends at Denodo, who are helping enterprises make sense of the data world. Now, whether you are a CIO, architect or analytics leader, Denodo will help you engage faster and deliver real results.

[00:01:49] And with their partners, you can also modernize without disruption. So if you're finally ready to make sense of the data world, visit denodo.com today. So enough from me. Let's get Stephen onto the podcast now. So a massive warm welcome to the show. Can we tell everyone listening a little about who you are and what you do? Hi, my name's Steve Woods. I'm the founder and CEO of Sterling Share Investments.

[00:02:17] We're a fintech broker dealer and RA located here in Manhattan, but with operations all across the United States and some clientele around the world as well. Well, it's a pleasure to have you join me. One of the things I try and do every episode is to dig a little bit deeper on the origin story of startup founders and your journey. When I had a quick look from high school dropout to Wall Street advisor to studying at Harvard and Oxford is far from linear.

[00:02:46] So looking back, which part of that path helped shaped you where you are and helped you or how you think about risk, trust, capital and more than any credential ever could? It feels like a real university of life kind of story here. Tell me more about that. Yeah, well, I mean, honestly, my view on risk came from the fact that I was at the very bottom. So I had nothing really to risk at that point, right? So everything was complete upside to me, right?

[00:03:17] So, you know, I was a decently smart kid. But I dropped out of high school when I was like 16, went to a military program, got my GED. You know, one thing led to another. Next thing I know, I find myself as a bartender at the age of 26. Stock markets tanking in 2008. I'd always had a huge affinity for the market. And I said, you know, that thing's going to come back. And when it does, I have to be part of it, right?

[00:03:45] So I started sending out my resume every single Monday to like 50 different firms. You know, I had nothing to lose. So my view on risk was it's like now or never, right? And so that's helped get me, that view helped get me onto Wall Street, right? And, you know, I started at a probably, I didn't start at Goldman Sachs, right? I started at a pretty, pretty terrible place.

[00:04:12] But from there, you know, I just listened to what they told me. I did very well, worked, made a decent living. And then from there, it really became like, okay, I see some segments of the market that are a little messed up and what can I do to improve them first for me? And then, because you can't help others unless you can help yourself, right?

[00:04:38] So help make things better for me as an advisor and in turn, make things better for clients. And then one thing led to another, COVID presented another opportunity. And then we just kind of moved forward. And I've always just been really good at spotting opportunities and chaos and then trying to maximize them for as much as they're worth. And looking at what you do and some of your online content, I was reading how you've been

[00:05:05] quite vocal about rethinking the traditional broker deal model and something, obviously, you've got a lot of experience in. So I'm curious from your perspective, what does the model or where does the model genuinely still work today? And where is it quietly failing the very people that it claims to be serving? Right, right. Um, so it works very well.

[00:05:29] The current model works very well for the really, really, um, wealthy individuals, right? Who have access to, you know, top level IPOs and stuff. And by the way, these aren't people that get allocated out these, these things, generally speaking, these are generally speaking, going to be pension funds and very large clientele.

[00:05:55] Whenever you think of the large clientele at banks, these are not individuals, right? These are endowments and things like that. Right. So it, it works at that level. Right. Um, but from that, from the general, uh, mass affluent side of things, like if you have $2 million at JP Morgan, right? You're just another number. Yeah. You're just another number.

[00:06:18] And, um, you know, a lot of times what happens is the client kind of just gets put into cookie cutter, uh, portfolios. And what happens is when the market goes up, the financial advisor is a genius. And when the market goes down, oh, the market is, is bad. And the whole entire time, the, the, the goal of the financial advisor at that point is kind of just keep the client happy enough so that they don't leave.

[00:06:46] And that their advice per se kind of just works as like a tax on the portfolio, on the portfolio as a whole. Um, and generally speaking, the firms, in my opinion, my opinion, the firms take advantage of the actual frontline employees who actually deal with those clients and deal with those, those relationships. And that culture rolls downhill where you get in a situation where the advisor, like I said,

[00:07:14] just tries to do enough to keep the client happy so that they don't leave. And so that they can spend all of their time going and trying to find a, another client. Right. So that's, that's one of the things we're trying to do with showing charge, just kind of like turn the, turn the, um, entire structure of the asset management model on its head and improve it for both clients and advisors. And transparency and ethics are often talked about in finance, but seldom operationalize

[00:07:42] or at least that's the way it feels sometimes. So how do you actually design incentives, technology and governance so that those values do actually show up day to day in day to day decision-making rather than just being, you know, BS marketing language that we've probably seen examples of as well. So how do you do that? It's incredible what you're doing here. Yeah. So from the, it's, it's super easy to understand from the advisor perspective, right? So if I'm an advisor at a wire house firm, right.

[00:08:12] And I have a hundred million dollars in assets and I'm charging, you know, 1% management fee, that's, you know, a million, a million dollars, right. Um, in, in asset management fees. If I'm working at that firm, I'll probably take home 350,000. That's going to be 150 base, 200 bonus. Roughly. If I go to one of the large independents and I do that same business, right. They literally exact same business. I'll probably take home 750,000. Right.

[00:08:40] Which is a big jump up right now with our technology here at Sterlingshire. How we built it is now the advisor keeps a hundred percent of their asset management fees and commissions with, with zero costs to them whatsoever. Right. So now they walk with the full million. So from a transparency perspective, it's very cut and dry, like X's and O's like, here is, here's what you get. Right. Um, then from the, from the client's perspective, a couple of different things we do, like our,

[00:09:07] our, we have an advice on demand model that I, that I really like, uh, we're trying to pioneer this where instead of the asset management model looking like here, here's my money, keep 1% of it every single year. Right. The, the clients we're dealing with a lot, the new, especially the younger clients, they're very informed. They are super highly educated, uh, as far as the world of finance, much more so than their parents were.

[00:09:33] They understand they've, they've grown up with the Robin hoods and the wee bowls of the world and eat Toros. Right. And so they, they have some understanding of what they're, they're doing. And so what we're trying to do is we're trying to say, instead of here, we're going to take your money. We're going to keep 1% of it every single year, which we can do that. We can fully manage everything. What we're trying to do is we're trying to provide a new, a new model where they can come in, they can self-direct at zero, uh, zero commission like the other firms, but they

[00:10:02] can also access a real high level personalized professional advisor and on-demand basis and say, you know, what do you think I should do? I got a quarter million dollars in cash here. That, that real licensed professional, this not somebody who's like spouting off on TikTok, right? This real licensed professional can now use their decades of experience or our AI tools in our system to rip through the client's portfolio, look at their risk tolerance, investment

[00:10:27] objectives, like the client profile, and begin to build a holistic plan for them instantaneously. And the key here is that high level personalized professional advice that we're giving an on-demand basis. There's not an AUM fee on that. If you're operating in this model, it, how it works is the only time you actually pay that advisor is in the future. Whenever you sell something that he specifically said, I think you should, I think you should buy this. Right. And only whenever it actually makes them money.

[00:10:55] So instead of here, take my money, keep 1% of it every year, it's here. Here's my money. When you make me some, I'm going to give you a portion of it in that advice on demand model. So that's that we think, uh, we think tying the compensation directly to the outcome of the specific advice that's being given, uh, makes it, uh, uh, better for everybody involved and it creates a lot of transparency around it. And I'm curious on behalf of any founders that could be listening to this show, maybe

[00:11:23] they're building their own companies while also trying to manage their personal wealth for the first time. What are there any mistakes that you see entrepreneurs repeating when they, they suddenly move from scarcity to scale? Anything that you see here? You know, I was one of those people that went from scarcity to scale, but not necessarily like in the founder space. I just went from making not much money to making a lot of money pretty quickly.

[00:11:49] People that come into money easily spend it easily typically, right? Because you don't think that it's going to stop. Right. And so you're splurging on those vacations to Miami, renting that, you know, $5,000 Lamborghini for the weekend. Right. And you're doing silly things with your first, your first real big chunks of money. The thing I would say first and foremost is that's all fine and good, but you first want to differentiate your revenue streams.

[00:12:19] So do something with, with money that's going to produce more money for you. Right. And then that, those additional revenue streams, then you can begin to have fun with those additional revenue streams. So first build, build up that significant, you know, a block of capital that you use to generate additional steady income for yourself. And then you can, then you can just have a little bit of fun.

[00:12:46] And technology is reshaping asset management, but it also can distance advisors from their clients. So how do you use these next generation tools without losing that human judgment and accountability that that trust that that gets built depends on? And you've probably seen more of this with the introduction of AI over the last three years, but how do you get that balance? Right. Yeah.

[00:13:13] So, um, we just, we put into our, uh, our app, the ability for the clients to, uh, reach out to their advisors pretty, pretty seamlessly. Right. So we don't, we actually prefer that. Like we actually prefer that the clients speak with the advisor, right? We have the ability to do everything, um, you know, fully digitally, but that human component,

[00:13:38] the human element, um, still exists and is at the very forefront of our, of our, um, of our technology. So it really comes down to the individual client. Like we can't make a 25 year old client, pick up the telephone and speak to a, to a human, like if they don't want to. Right. Um, but the responses that they're getting are not computer. They're not computer driven, right? It's not, it's, you're not talking to a robot, like you're talking to a real human.

[00:14:07] So that, that, that's one of the, one of the things that we do. A quick thank you to the sponsor that supports every podcast across the tech talks network and every episode, because their help allows me to publish 60 interviews a month with founders and technologists who are keeping this industry moving. And this month I'm partnering with Alcor. And if you've ever tried to hire engineers in another country, you probably know just how painful it can be.

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[00:15:28] So if you want to take a look, visit alcor.com slash podcast or tap on the link in the show notes. But now on with today's show. And obviously you're someone that's lived and worked in very different worlds from Kansas city to Manhattan, where you're talking to me from today. And I'm curious, has that contrast ever influenced how you think about money, ambition, and what success actually looks like outside of financial returns?

[00:15:56] Because you've kind of been on both sides here. You've got quite a unique vantage point, I would think. Yeah. You know, I try to stay grounded. There's a lot of people in this industry that they look at what they're doing and the numbers associated in their bank account as like scoreboard. Right. Yeah. I, beyond that, I'm looking at the impact that we can have on, on society as a whole.

[00:16:24] Um, and I think that that goes back to my roots in Kansas city. I didn't look at money the same way. Right. I grew up like super poor, didn't even realize I was super poor, um, till much, much later in life. And, uh, I didn't feel like I was missing out on anything, but now as I got more cultured and access to different people, you know, I understand that a lot of this wealth that's

[00:16:54] created within organizations remains behind the golden, uh, uh, behind the hedges at the, at the country clubs. Right. And what we're trying to do here is essentially build a new bulge bracket bank from the ground up in a fully digital manner and do this in such a way where it keeps a lot of the actual revenue that's being generated within the organization at the lower levels of the organization. So rather behind the hedges, it's, it's in the communities. And we think that that is going to help out overall.

[00:17:22] Listen, I'm not, I, I obviously want to make a lot of money. I want to do well with the company to do well, but my goal is not to become the richest person in the world. My goal is to create a system that hopefully will help drive other firms forward and change the way that they do business. Like if you think about how Robin hood changed the discount broker dealer, Robin hood went after like the E trades and TD Ameritrades of the world. Right. Our goal here is to push the large independence forward.

[00:17:51] And to an extent the, the wire houses forward to you in the, in the way that they, that they think. So it kind of, kind of probably goes back to some of the Midwest roots. Yeah. A hundred percent. And for builders and backers listening who might want to play a role in creating the next generation of financial interest institutions or investment firms that look very different from what came before them and hungry to make some big changes.

[00:18:19] What's the hardest truth that they might need to accept before trying to change the system or change the world with their, their startup. Any advice that you would pass down there? Um, yes. Don't think for a second that it's going to, that, um, let me rephrase that. Um, just, just do it because if you start thinking about and digging into like everything

[00:18:47] that it's going to take from a regulatory perspective, listen, I was a financial advisor on wall street doing millions of dollars in production for years. And I told myself, you know, I understand this business. I understand regulations, right? I'm just going to, I'm going to go and do this thing and it's going to be great. We're going to, we're going to change the world. Listen, you don't know anything about regulations until you're actually in the, in it until you're actually doing it. But don't let that be a detriment.

[00:19:17] Like if you go down some giant rabbit hole on your, every little thing that could potentially be, you need to be thought of before you, before you start, you will never start. And the only way that you're going to make a difference is by actually getting out there and doing it. And so don't get, don't talk yourself out of it. Don't think yourself out of a good idea. That's what I would say. Fantastic advice.

[00:19:47] And for anyone listening that have been hearing today for the first time about Sterlingshire investments, maybe they want to find out more information about that. Where, where can they find that? Where can they find you online? Maybe tell them a little about the services that you offer there too. So we can send a few people your way. Yeah. So basically you can find me on social media. I'm super, super easy to find Stephen Woods at Sterlingshire.

[00:20:15] Um, website is Sterlingshire.com. S T I R L I N G S H I R E.com. Um, yeah, basically Sterlingshire. What we've done is we've built technology that allows us to be the highest paying firm for, in the industry for financial advisors. So financial advisors, if you're seeing this, you know, everybody's on a real 100% payout. Everybody keeps a hundred percent of their asset management fees and commissions.

[00:20:40] And then on the, on the actual client side, we do the robo investing. We do self-directed trading. We do full service management where advisors, you know, for a fee handled all the asset allocation and things for you. Uh, we also offer that advice on demand model, which is kind of, uh, kind of builds a hybrid lane where you can self-direct most of the time, but when you need it, there's a professional there to assist you.

[00:21:07] And, um, in that model, a couple of different ways, like you, you can, uh, operate under the hybrid model where you only pay that financial advisor commission on the sell side, whenever we're taking profits on an idea that they have actually generated for you. Um, so yeah, happy to be able to, uh, help anybody out from a client or, or advisor perspective, um, here at strong share. Awesome. Well, I'll be adding links to everything to the show notes so people can find you nice

[00:21:37] and easy. And I love what you've done here in flipping the traditional broker deal model on its head, completely disrupting that traditional model with a strategy rooted in transparency, ethics, personalized services, and of course, next gen tech. It's something that we don't typically see from those big bulge bracket firms, but I think more than anything, what's so powerful is that unique story and journey that you've been on and how that

[00:22:03] shaped you from dropping out of high school at 16 to becoming a wall street advisor to earning credentials from Harvard and Oxford purely it's so inspirational for other startup founders listening early on in their story. But, uh, just thank you for sharing yours with me today. Thank you. Thank you very much for having me. Um, you know, uh, if I can do it, your listeners can do it. So just get out there and, and, and give it a go. I appreciate it.

[00:22:30] So a big thank you to Stephen for joining me on the podcast and for being so open about his journey. And what really stood out to me was the honesty around risk, ambition, and the responsibility that comes with building something meant to last beyond personal success. And also appreciate the way he framed money, not as a scoreboard, but as a tool that can either stay locked behind closed doors or flow back into communities through better systems and fairer incentives.

[00:22:59] And that that perspective feels especially relevant for founders and backers who want to build businesses with impact, not just scale. So for everyone listening, I'll add links to Sterling share investments and Stephen's work. So you can explore the model for yourself and indeed, if this episode sparked any ideas about how you approach risk wealth or building something meaningful, again, I want to hear your thoughts. So drop by tech talks, network.com.

[00:23:27] You'll find all eight of my podcast along with how you can leave me an audio message. So why don't I hit that button and send me a quick message now, but that is it for today. So thank you for listening as always. And I will speak with you all again very soon. Bye for now.