Displaying items by tag: clients

In an article for SmartAsset, Rebecca Lake, CEPF, discussed some networking strategies that advisors should implement to grow their business. First, networking will ensure that advisors have a pipeline of future opportunities. 

Networking is also effective to help you establish a reputation in your community and can help you connect with people who could be potential clients. It’s especially important as word of mouth remains the primary way that people choose their advisors. 

The simplest step is to join a professional association that is national or locally based. These will regularly put you in face-to-face contact with people in your industry and potential clients in an informal, relaxed setting. Local organizations will also give you the opportunity to participate in community events which can provide organic opportunities to form relationships with people in your community.  

Another important piece for advisors is to grow a presence on social media. It can help display your personality and thinking on a deeper level, and it can help you find potential clients within your niche. And, you can also use social media to try to understand whether or not these prospective clients are a good fit for your practice based on their digital footprint.

Finsum: Networking is an integral part of success for any financial advisor as it will ensure that you have a pipeline of potential clients.

Model portfolios continue to be a major beneficiary of current volatility and uncertainty as evidenced by Charles Schwab seeing $4.6 billion in inflows to its bond ETF according to an article by Bloomberg’s Carly Wanna.

These inflows are being attributed to adjustments made by a model portfolio and are offered by many large asset managers. Currently, there is no firm estimate on the size of the model portfolio industry, but manu speculate that trillions are managed through them. And, they are offered by the largest asset managers including Vanguard and Blackrock. 

But, the best indication of their size and influence is the massive inflows and outflows from ETFs which tends to happen at the beginning or end of quarters. Additionally, it’s easy to match the inflows and outflows from various ETFs. In this case, the model portfolio seems to be reaching for increased yield as it moves out of Treasuries and into lower-rated corporate debt. 

Overall, model portfolios are booming due to the strategy providing the benefits of active management with lower costs and increased transparency.

Finsum: Model portfolios are having an impact on Wall Street as evidenced by the huge inflows into Schwab’s bond ETF.

In 2022, Commonwealth Financial Network onboarded 270 new advisors, comprising a total of $11.2 billion in total client assets. The majority of the company’s advisors are fee-based, while the company is privately owned. The company also offers broker-deal and insurance products. 

In a statement, Wayne Bloom, CEO of Commonwealth said, “Despite the difficult headwinds our advisors, their clients, and the industry faced last year, our team was extremely successful in bringing top-caliber financial advisors to our firm.” As Bloom looks forward, he is targeting $1 trillion in total assets under management, while maintaining the values that have enabled the company to succeed. 

The company added that the new advisors came from a variety of backgrounds including RIAs, independent brokers, regional practices, and wirehouses. The company is also looking to continue targeting ensembles and larger firms. It’s especially interested in targeting those with an entrepreneurial bent, offering them services like a Virtual Transition Support team and an expanded offering of Outsourced Business Solutions. 

Finsum: In 2022, Commonwealth Financial Network had a record-breaking year with 270 new advisors onboarded. 

In an article for Vettafi, James Comois laid out some ways that direct indexing can help reduce taxes. Direct indexing essentially lets investors create their own customized indexes that are appropriate for their personal situations and can help them reach their financial goals. 

Rather than buying an ETF or a mutual fund, investors buy the holdings directly. The obvious advantage is that it leads to more personalization so that portfolios can reflect an investors’ values and/or accommodate a unique situation.

A secondary benefit is that it can lead to a lower tax bill, so it may have additional utility for investors to offset capital gains. In essence, losing positions can be sold and then rebalanced into equities with similar factors.

Some of the likely factors that make it more likely that direct indexing can be useful are a high federal or state tax bracket, large investment pool, a steady replenishment of assets, volatile markets, and short-term capital gains. In contrast, the benefits of direct indexing are not substantial enough to offset the additional complications.

Finsum: Direct indexing can be a better choice for certain investors who need greater customization and have high tax bills.

Growing a financial advisor practice is a challenging but rewrarding journey. It will force you to build new skills and marketing yourself in order to find the best clients. In an article for SmartAsset, Rebecca Lake CEFP laid out four key steps for advisors to grow their business.

The first step is to determine who is your ideal client and what niche will you be serving. Specializing in a particular segment will lead to more expertise and trust, leading to longer-lasting relationships and a more sustainable practice. It will also lead many people to seek you out, because they will find greater comfort.

The next step is to write a mission statement. This will help clarify your values, priorities, and motivations. It should be shared with your prospective clients so they have an understanding of how you do business. Not only will it help with conversion, but it will screen out candidates who aren’t a good fit.

Another important step is to get involved in the community which will increase the visibility of your brand and create opportunities for connection with prospects. This also leads to face to face interactions which are often the most impactful.

Finally, advisors should also embrace digital marketing. Younger clients are likely to find you online and will also likely have read reviews. You should have a comprehensive digital strategy and utilize social media, a user-friendly website, and email marketing. You can favor the platforms where your clients are likely to be found.

Finsum: Growing a financial advisor practice can be challenging but rewarding. Rebecca Lake CEFP lays out 4 steps that advisors should take.