Displaying items by tag: wealth management

In an article for AdvisorHub, Jeff Nash the founder and CEO of BridgeMark Strategies discussed what financial advisors need to consider when they are thinking about switching firms or shifting to a different business model. 

He recommends that advisors start with the basics which means thinking about your current level of satisfaction, the impact on your staff and clients, and the different options that are out there. First, he recommends not falling into the trap of too much analysis which is a common occurrence given the plethora of options for successful advisors. In order to avoid this, he recommends thinking about what is currently missing from your practice that you want to add, what you want to keep, and what responsibilities you don’t want to add. 

The next step is to think about what type of business model is ideal whether it’s a hybrid model, an RIA, a smaller, more regional focused firm, an independent broker dealer, or a traditional wirehouse. 

Finally, he concludes by saying that hiring a consultant who is experienced and fully knowledgeable about the space can help you make the best decision in terms of financial rewards and personal satisfaction. 

Finsum: Recruitment of financial advisors is picking up pace. Here are some things for advisors who are considering a move to think about. 

In an article for AdvisorHub, Steven Brod of Crystal Capital Partners discussed how alternative investing options are increasingly important when it comes to financial advisor recruiting. He believes that having a robust alternative investing platform is essential for small and mid-size wealth management firms to successfully recruit advisors. 

Alternative investments have exploded in popularity following the poor performance of stocks and bonds in 2022. These investments typically provide increased diversification and the potential for higher returns. 

An effective alt platform will give advisors access to all sorts of strategies and the requisite technology to manage these investments. Interest in alternative investing is especially high among the younger demographic so not having a sufficient platform could repel advisors with such clients. 

Some examples of offerings include hedge funds, private equity, private credit, SPVs, and venture capital. Overall, the platform should offer a broad variety of investing strategies and tools to evaluate these options from a quantitative and qualitative perspective. The final step is to ensure that there is an alignment of interest between the platform, advisor, and clients. 

Finsum: Alternative investing is exploding especially among younger, entrepreneurial advisors. Here is what to look for in a good alt investing platform.

In an article for SmartAsset, Rebecca Lake CEPF discussed the importance of a workable retirement plan for financial advisors. Many advisors spend their careers helping their clients achieve their financial goals, so they can retire in peace. Yet, they don’t apply the same diligence to succession planning for their own practices.

Instead, advisors should think about the ultimate outcome they want for their business and then work backward to create a plan to achieve that goal. Of course, the plan needs to have some flexibility built in as circumstances can change. But, an end goal is essential to ensure that all of your efforts translate into ultimate success. 

The next step is to have a rough estimate of the net worth of your business. This will help you understand how much your practice would generate in the event of  sale. In tandem with this, advisors should also ensure that their personal financial planning is on track in terms of retirement planning, disability insurance, life insurance, budgeting, etc.

Following this, you should be transparent about your succession planning with clients and employees or anyone else who could be potentially impacted. Employees want to have some sort of clarity about their careers and potential roles, while clients want to be reassured that they will be in good hands with a new management team. 

Finsum: Succession planning is an essential step for financial advisors especially as these decisions will have a major impact on clients and employees.

In an article for LPL Financial, the firm discussed some methods for how financial advisors can build a pipeline of potential clients to ensure the growth and longevity of their practice. 

The first step is to identify your prospecting strategy. This entails identifying key goals and metrics for each step of the client journey to ensure that consistent effort and focus is being applied at all stages. There should also be some sort of system to monitor outreach to prospects, quickly follow up, assess whether the prospect is a good fit, and conversion into clients.

The next step is to identify your key values and differentiators. Then, share this with your target audience. This step is critical in helping prospects understand why you chose the profession, and what you stand for. 

An important element of this step is to figure out your ideal client and then focus your outreach efforts on this niche. Then, you can brainstorm ways to connect with that target audience whether it's through advocacy groups, social media, community events, etc.

Finally, you should ask for referrals from existing clients as they are likely to have the best understanding of who among their friends and colleagues would be receptive to learning about your approach to helping them reach their financial goals. 

Finsum: Financial advisors need to build and nurture their pipeline of prospects to ensure that their practice continues to grow and has longevity. 

In an article for InvestmentNews, Jeff Benjamin discussed the need for succession planning especially as there are about 100,000 advisors that are expected to retire over the next decade. In total, they are estimated to control $10 trillion in assets. 

Of this group, 45% intend to transfer ownership to employees or a family member. Around 30% are looking for an external transition, while 25% do not have a firm succession plan. According to industry insiders, this is a major challenge for the industry especially as succession plans take time to prepare. Additionally, there needs to be guidelines for alternative scenarios especially as fewer young people are entering the industry.

Even in the event of a sale, there are complications and contingencies that need to be considered such as your clients’ comfort and the financing of such a transaction. With internal transitions, unexpected events can also arise such as relationships souring with prospective owners that result in a shift of strategy or advisors being recruited away to other firms. 

Finsum: Financial advisors need to have a succession plan. This is especially critical given the wave of retirements that is expected to hit over the next decade.