December 21, 2009

Can a Roadmap Help Wealth Managers?

Sometimes, even when you know how to do something, a constructive comment from a keen observer can remind you how to do it more efficiently, more easily or productively. Any athlete can identify with this. Of course, there is great value in these observations--if you can put them into practice. For that, a map can be helpful.

So, it is not too surprising to learn that registered investment advisors who custody with TD Ameritrade Institutional have embraced the firm's one-year-old Roadmap Program, an online set of tools, created by Minneapolis-based ActiFi, that enable RIA firms to develop a customized plan for achieving their highest priority goals. It's, "the killer-app for practice management consulting," the custodian's Managing Director of Advisor Advocacy & Industry Affairs, Brian Stimpfl, told Wealth Manager on December 16.

In the year since the program was launched, 700 of the 4,000 advisory firms that custody assets with TD Ameritrade Institutional have requested and received 2,349 Roadmaps. Of the advisors who have participated in the program, 60% reported an increase in assets or accounts in the "first six months of implementing," the recommendations. "On average," says the custodian, "these advisors doubled the number of new accounts or added four times as many assets compared to the six months prior to starting the program."

The online tool--free for RIA firms that custody assets with TD Ameritrade Institutional--is an offshoot of a program in which Stimpfl's consultants would "go and sit with [large RIA custodial] clients for a couple of days and develop a practice management report of recommendations," he says. While these reports and recommendations were comprehensive, there was sometimes too much in them for firms to actually implement it all, and the program was very labor-intensive. As such, the program was, "not scalable."

The online Roadmap Program breaks down a firm's priorities into smaller goals for which specific recommendations are made. In that way they are easier to implement than a comprehensive plan with a lot of different moving parts. "Advisors are so good at working in the business, but sometimes not so good at working on the business," Stimpfl notes. "What are the most important things you need to do as a firm?" he asks. His consultants now use the online version of Roadmap to help firms chart their strategies to achieve their "smart goals--specific and measurable."

Most popular goals

Of the 2349 Roadmaps requested since the coaching program's online debut, "almost half" are about goals concerning growth in "AUM and number of clients," the "size of firm," in terms of employees, and how to "enhance marketing and communications." Productivity is the second-most-requested Roadmap--how to "work fewer hours" and "increase productivity." Next is how to increase client, employee and owner satisfaction. Managing risk; systematizing the firm's business to increase its value; increasing revenue and decreasing expenses; and developing wealth management, business and media expertise round out the top concerns and goals of RIA firms for which they've requested Roadmaps.

Stimpfl says these Roadmaps are not cookie-cutter solutions: they are, "truly like snowflakes--different for every advisor."

Comments? Please send them to kmcbride@wealthmanagerweb.com. Kate McBride is editor in chief of Wealth Manager and a member of The Committee for the Fiduciary Standard.

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