The June issue of Investment Advisor is our annual Broker-Dealer issue. Look for special coverage of the issues broker-dealers are facing now and in the future. We also present our 2011 Broker-Dealer Reference Guide and Directory, a compendium of which broker-dealers are top in five major categories.
Speaking of issues the industry is up against, there are a lot — increased due diligence, adapting to an ever-changing regulatory environment, improving efficiency, finding alpha-producing investments, slow economic growth — the list goes on. Envestnet, though, has positioned itself at the center of those issues in order to provide advisors with the tools they need to face their challenges head on and grow their firms.
According to Philip Palaveev, president of Fusion Advisor Network, the biggest obstacle to growth that firms face is the ability to define and deliver a value proposition that goes beyond the skills and expertise of the small group of owners. He explains how advisors need to work past those limitations in order to grow their firms.
And, Ken Fisher, founder and CEO of Fisher Investments, responds to an article in the April issue of Investment Advisor. Sales and service are equally important to a successful firm, he says, but there's another factor that advisors often overlook.
Click through the following slides to preview the June Investment Advisor features, or click here to see the entire issue.
These are the major issues facing advisors in 2011: performing increased due diligence on investment products; adapting to a fluid regulatory environment; improving efficiency in the back office and directly with clients; finding alpha-producing investments at a time of slow economic growth and continued volatility in the markets; succession planning; deciding which business model—broker-dealer or RIA—to adopt; and providing holistic financial advice to clients on all their investments, not just those over which the advisor has control.
Group Editor in Chief James J. Green talks with leaders at Envestnet, which has placed itself squarely at the crossroads of the major issues facing advisors. Its tools will help advisors tackle those issues, leading to growth for all.
Jason Apollo Voss became co-manager of the Davis Appreciation & Income Fund in 2000. During his five-year tenure, the fund beat the total return of the Nasdaq Composite by 77%, the S&P 500 by 49% and the DJIA by 36%. It was ranked No. 1 in its investment category by Lipper, and received Morningstar’s highest rating for ethical stewardship of investor money.
In October 2004, Voss’s intuition warned him of the financial collapse and global recession that would start little more than three years later. At the age of 35, he retired and devoted himself to studying martial arts and practicing meditation. He writes a blog titled “What my intuition tells me now,” and recently published “The Intuitive Investor: A Radical Guide for Manifesting Wealth.”
Olivia Mellan sits down with Voss to learn how advisors can use intuitive investing to make better decisions for themselves, and their clients.
Steve Luckenbach’s article in the April issue of Investment Advisor, “The Path to Authentic Client Service,” centered on an indisputable point: The poor image the financial services industry suffers can’t be elevated without improved service. But is it as easy as sales or service? Ken Fisher responds to Luckenbach’s directive to “serve, not sell” in order to regain investors’ trust.
Once upon a not-too-long-ago time, most investors believed that a simple dichotomy between stocks and bonds in a portfolio would provide the diversification necessary to withstand the effects of a market downturn. That approach, though, proved to be a fallacy in recent market history. Regardless of the stock/bond breakdown that an investor might have had, and regardless of the mix between corporate and sovereign bonds, between small-cap, mid-cap and large-cap stocks, and between international and domestic assets, the fury of the 2008–2009 debacle proved a force too great to surmount.
Savita Iyer-Ahrestani explains why now, for true diversification, clients need to add commodities to their portfolios.
If clients want to put their money in socially responsible investments, wouldn’t they want to invest with a socially responsible advisor, too?
With SRI investing growing exponentially, advisors will have new opportunities to differentiate their firms and capitalize on the SRI “mega-trend” currently happening in the wealth management industry. But first, advisors need to not only talk the SRI talk, but to also walk the walk and back it up with tangible initiatives to demonstrate their commitment to making the world a better place for current and future generations.
Louise Barnes of Tred-Lite Consulting and Timothy Welsh of Nexus Strategy LLC demonstrate how to establish a sustainability plan and communicate it to your clients.
Investment Advisor surveyed over 70 presidents and heads of broker-dealers big and small. We asked about the regulatory environment, compliance, recruiting, and the long- and short-term challenges they face. Not content with the answers as they were, we asked broker-dealer recruiting expert Jon Henschen, president of Henschen & Associates, an advisor placement firm, for his “color commentary” on what the responses mean for the larger industry as a whole, and what advisors should be looking for from the broker-dealers with which they choose to partner. True to form, Henschen, a well-known writer and speaker known for his sometimes brutal honesty, didn’t hold back on his frank analysis of the state of the industry, what it means for reps and—more importantly—what it means for clients.
To say it’s a time of flux in the broker-dealer and independent advisory industries doesn’t do it justice. Compliance, fiduciary standards, succession planning, margin squeeze—not to mention lawsuits related to Medical Capital and other poorly thought-out products—all mean more for BDs and reps to think about in addition to the baby boomer retirement, recovery from the worst global financial crisis in history and … oh yeah, the day-to-day pressures of running a business. With all that in mind, which broker-dealers are thriving, which are merely surviving and which are shutting their doors? We present the 2011 Broker-Dealer Reference Guide, a review of the top BDs in each major category to help you sort it all out, and ensure a lasting and profitable relationship for you and your clients.
Large financial advisory firms are more profitable, grow faster and have higher equity value per dollar of profit. The largest firms also have an advantage in attracting talent and have an easier time establishing referral relationships with CPA firms and banks. Yet, very few firms manage to reach the size and scale where they can reach these advantages. While the entire industry continues to grow and the average size of an advisory firm has more than tripled since the year 2000, by our estimate no more than 300 firms have reached over $1 billion in assets under management (AUM) – an arbitrary mark for what we could consider a large firm.
The biggest obstacle to growth that otherwise successful firms face is the ability to define and deliver a value proposition that goes beyond the skills and expertise of the small group of owners. “Trapped” in the physical limitation of time, energy and knowledge that the three or four principals possess, firms struggle to create a business model that can transcend that limitation and allow them to reach the true advantages of size – most of all market dominance, reputation and ability to add talent.
Philip Palaveev, president of Fusion Advisor Network, explains how advisors need to work past their skills and expertise in order to grow their firms.