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Technology > Investment Platforms > Turnkey Asset Management

Celebrity Advisor David Bach Launches ‘Business in a Box’ for Advisors

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Celebrity advisor and New York Times bestselling author David Bach is on a mission to help advisors become celebrities in their marketplace.

The co-founder of AE Wealth Management recently assumed a new role in the firm as director of investor education, and is spearheading the firm’s ongoing initiative to offer educational and training seminars for independent advisors.

Speaking at the MarketCounsel Summit in Miami Beach Wednesday, Bach described a “paint-by-the-dot system” to help advisors grow their business.

“We’ve created a firm designed to help 1,000 RIAs become celebrities in their marketplace,” Bach said.

In a separate interview with ThinkAdvisor, Bach said “there are three principles and 11 things that we do for our advisors. We have a turnkey manufacturing plant right now basically to help these advisors grow their business; it’s primarily marketing first, but we’ve also created a turnkey system for asset management and a turnkey system for technology — basically a business in a box that an advisor can plug in to.”

What advisors really need, and the AE platform offers, is “turnkey marketing,” Bach said. “The biggest problem this business faces is that people don’t know how to market.”

AE Wealth, Bach said, is specifically targeting RIAs that are below $100 million to join its platform — advisors with between $25 million and $100 million in assets “that want to Five-X their business.” He noted that 50% of RIAs are below $100 million in assets, and that 20% of RIAs — or hybrid advisors — are below $10 million in assets.

“If you have a business today that is below $25 million in assets, which makes up nearly 35% of the industry, you will be out of business in five years,” Bach told ThinkAdvisor.

“We are in a world where fee compression, competition and DOL [fiduciary rule] is going to make the day of a solo practitioner with a $10 million RIA history. So we’re telling people with $25 to $50 million in assets: ‘If you’re new to the business and want to get growing faster and not take 20 years, we can show you how to do this in five’” years.

“Whatever DOL [fiduciary rule] ends up being, your business is going to cost you more, cost more to run, be more complicated, and have more liability issues,” Bach said. “By being part of a bigger organization with a complete compliance overlay, with turnkey marketing solutions and asset management and technology, you are well more protected than being a solo practitioner with a couple assistants.”

If an advisor has been in the business for 20 years and is “stuck” at $50 million in assets, “because you’ve hit a ceiling of complexity, we can show you how to build a business that takes you from $50 million to at least $100 [million] within 36 months,” Bach continued.

What if the firms would prefer to merge, or consolidate with a larger firm, rather than grow?

“We’re looking for 1,000 RIAs that want to grow,” Bach said. “Once we’ve grown them with our systems and they are all on our platform, we will be able to candidly consolidate them, buy them, merge them. By having an organization which is truly a network, we will be able to help these advisors either grow by acquisition of each other, or we’ll be in a position to ultimately buy them.”

AE Wealth’s model is not a “rollup,” Bach says.

“We’re not buying anybody, so we’re not writing any checks, we’ve raise no outside capital. What we are doing, though, is providing all the turnkey solutions, and we’re not rebranding them.”

As it stands now, the AE Wealth Management network consists of nearly 380 IARs and RIAs spread across 225 offices throughout the U.S., with $2.8 billion on the platform, Bach said.

“We think we are now set up to handle inflow,” Bach said. “We have 50 employees and now that we’ve been doing this for 18 months, we’ve gotten pretty good at it — there’s a lot of work involved in transitioning RIAs; we’ve transitioned nearly 50,000 accounts. Our goal is 50 to 100 RIAs a year.”

During his Wednesday remarks, Bach cited four reasons that advisors should strive to be stars in their markets:

  • It’s easier to get clients;
  • It’s easier for your clients to refer their friends to you;
  • For advisor who are already celebrities, “there’s a lot of kissy-kissy going on in the buying of firms; when you’re the pretty girl you have a better chance of getting a date”; and
  • It’s easier to raise money.

Upcoming educational sessions that AE Wealth will be conducting include:

  • The “Smart Couples, Smart Retirement” seminar program. starting in January, based on the new edition of Bach’s New York Times bestseller Smart Couples Finish Rich.
  • The “Understanding Market Corrections” seminar, to help advisors get ahead of current market conditions, which indicate a possible correction next year.
  • “The Art of the Client Referral,” a training program designed to help advisors turn their best clients into effective advocates. 
  • The “Smart Women, Smart Retirement” seminar, which will begin in the third quarter of 2018, based on the new 2018 edition of Bach’s New York Times bestseller Smart Women Finish Rich.

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