Relationships are the center of Jim Wyland, WealthStone’s success

Invest in the due diligence

Wyland says working with the right people has been critical, whether those were internal hires — the average tenure of WealthStone’s 25 employees is about 20 years — or outside alliances. He’s worked with partners like Valmark Financial Group, which provides insurance back office, underwriting and other resources, for nearly 40 years, or Charles Schwab, which became the firm’s custodian in the mid ’80s, the first year it took on independent registered investment advisers.

“Picking the right partners has been the best thing we’ve ever done,” he says.

And picking the wrong partners has led to the biggest regrets.

“You trust somebody. You believe in them. You form an alliance, thinking it’s the right synergy, and it doesn’t work out,” he says.

Take the analogy of marriage: you start out as friends, get to know each other and slowly become committed, taking time to build the relationship. But, Wyland says, in business, you often don’t have the luxury. Everyone puts their best foot forward and suddenly, they are part of your organization.

“You really don’t know somebody until you live with them for a while,” he says.

If you’re going to bring someone into your inner circle and team or trust them as a partner, slow down and put in the work getting to know them first, Wyland says.

“It’s about people and it’s about picking the right partners. If there’s one message, it’s really, really get to know the people you’re working with,” he says.

Luckily, there are more resources today to help you do that. You can work with consultants or a coach who specializes in recruiting and vetting, while utilizing things like screening tests.

“My biggest mistakes were moving too fast, trusting too much and then finding out later I could have probably figured out that that was the wrong company or the wrong person to trust. I just didn’t do my job well enough,” Wyland says.

Partners can be either someone who is equal, where you both co-own something, or it can be an alliance partner who brings something you don’t. You trust them to add that value to whatever you’re doing. But what a partner isn’t, Wyland says, is the guy you met on the golf course or the lady you met at a party.

“Do the due diligence. Talk to their clients. Get multiple people that do what they do and pick the best and brightest,” he says. “It takes a lot of time to do that, but it’s the best time you’ll ever invest.”

Working with the right partners is just one piece of the puzzle, although admittedly a big piece. Proper due diligence is even larger than that.

For example, Wyland says, a real estate venture needs four components to be successful. And like four legs to a chair, if you’re missing one, it will fall over.

It has to be a viable service or asset that will succeed in the marketplace because there’s a demand. It needs the right team who can build it, lead it, market it and service it. It needs capital, whether that’s equity or debt. And it needs the right structure, which considers the ownership, compensation, how taxes are allocated, and preferences for things like capital versus sweat equity.