Top Wealth Managersare looking to gather new clients and assets, recruit professionals, and use technology to help them better communicate and manage relationships with clients, aggregate data, rebalance and manage portfolios this year.
Getting a great start in the new year will mean making progress with these initiatives and being poised to jump at all of the new year’s opportunities. Here are some takeaways regarding these important Top Wealth Manager initiatives that will help you get going.
Growing the Firm
The firms that will benefit the most from an economic recovery will be those that are poised to capture new clients and assets as the recovery gains steam, according to Philip Palaveev (left), president of Fusion Advisor Network. How can firms prepare to do that? In part by recruiting the right people to advise new clients and help gather more assets from existing clients. Folding these additional advisors into the firm so they can sprint into the recovery can help prepare the firm for new growth. A firm’s “capacity” makes an enormous difference in whether they are ready to bring aboard new clients and new assets, according to Palaveev.
Though many advisory firms want to bring in only advisors with large amounts of existing assets, one alternative is to bring in a junior advisors and have them manage a large group of existing accounts (under supervision, of course), as they bring in their own assets, Palaveev notes. That way, the firm’s principals can concentrate on capturing new clients while the junior advisor has 100 accounts to call his own, something that will make said junior advisor much more attractive to new clients, he asserts. After all, what major new client would want to come aboard with someone who is only advising a handful of clients? Jumpstart a terrific junior and see how fast they can grow. Read more in, “Recruiting Advisors: Fusion National Conference.”
Palaveev also shares his wisdom about overcoming the challenges this year in “Top Wealth Managers Q2 2010: Lowered Expectations,”and“Top Wealth Managers: Make Your Firm Recession-Proof.”
How can Top Wealth Managers overcome the “big branding” client and recruiting issues? This is an important question as Top Wealth Managers, and indeed all independent registered investment advisors (RIAs) move into the new year. Part of the issue is figuring out why there aren't more highly capable brokers going independent. This issue so bothered Jeff Spears (left), co-founder and CEO of San Francisco-based Sanctuary Wealth Services, that he conducted a study about it. He believes it is possible now to recruit high quality brokers who are disillusioned about the big bank broker-dealers, and want to go independent RIA but are unsure of how to counter the branding issue that plagues the independent RIAs and independent brokers as well.
Spears counters the big-brand argument with an anecdote of a broker turned RIA who had a client with a $10 million account at Lehman. As the broker-turned RIA spoke about independence and the client’s best interests, “the light bulb went on for the client,” and “they requested the independent RIA do a proposal, but on a $50 million account, not the $10 million,” says Spears. The new independents can bring higher share of wallet, more assets, Spears says, and that helps counteract the effect of an advisor skipping the up-front broker payments. One of the arguments that resonates with clients, according to Spears, is when the new RIAs “tell clients it’s in their best interest to go to the independent firm.”
Read more about Spear’s findings in “Broker Compensation Not as Advertised at Wirehouses: Sanctuary's Spears,” and “Broker Compensation Not as Advertised at Wirehouses: Part 2.”
This year, many Top Wealth Managers had technology initiatives as a part of their strategic plan. There are a number of new developments on the technology front that RIA firms can benefit from, among them, data aggregation; loads of new wealth management applications for Apple’s iPad—which looks like a real game-changer; cloud computing and other more classic technology fare. Here are just a few articles that may help wealth managers hone their technology strategies for 2011:
- HighTower Announces New 'Anywhere' iPhone and iPad App for Advisors
- Apple's iPad Wins Favor With Advisors, Says FiServ-AdviceAmerica 'Tech Geek'
- Apple's iPad Is Example of "Disruptive" Technology, Says Black Diamond's Reed Colley
- Will the iPhone Change My Practice, and Professional Advice?
- The Power of Data Aggregation
- ByAllAccounts Survey: Account Aggregation Important for Small Advisor Firms
- Better Advising Through Technology
- Moving to the Cloud for My CRM
- Over- vs. Under-Engineering: Getting the Most Out of Your CRM
- Laserfiche Announces Salesforce.com ECM-CRM Integration for RIAs
Top Wealth Managers and their clients have come through a very challenging few years. There is enormous opportunity on the horizon for firms that epitomize the thoughtful RIA model that embraces best practices and an independent advice, client-centric model. Firms that are prepared to leap into the new year ready to grow through truly serving clients should be rewarded as the recovery heats up.