Displaying items by tag: wealth management

There is no magic solution when it comes to growing your client base as a financial advisor. Instead, you should adopt a variety of strategies which include understanding your strengths as a financial advisor, defining your ideal client, developing a branding strategy, and pursuing effective partnerships.  

Rebecca Lake, CEPF, wrote an article for SmartAsset on how to expand your client base. First, she counsels that advisors should not make the mistake of sacrificing quality of service in the pursuit of adding more clients. Advisors should always ensure that they are providing adequate attention and services to clients to ensure retention and loyalty.

Next, advisors should get clear and specific on their ideal target client in order to construct an effective marketing plan. They should also consider the ideal type and mix of services that would appeal to this audience. 

Another source of client growth is by leveraging your existing client base and asking for referrals. This can be highly effective as people are more willing to trust personal recommendations, but the request must be made tactfully. Finally, branding is an essential element to differentiate yourself from other financial advisors. Once you settle on your brand, keep it consistent.

Finsum: Financial advisors can grow their client base by picking a specific niche, developing a consistent brand, form partnerships with other professionals, and targeting your ideal client.

While direct indexing might be ready for added use this year, according to one expert, it’s hasn’t quite hit prime time when it comes to the majority of the wealth management industry, reported fa.mag.com.

“I’m not necessarily of the view that 2023 will be the year that direct indexing becomes broadly democratized,” said Anton Honikman, CEO of MyVest. “There’s a different discussion about bringing direct indexing to a broader market. What’s hindering that is the need for more of an experience with direct indexing.”

He continued: “I’m a fan of direct indexing,” said Honikman. “I think it will continue to grow, and I think it’s emblematic of an inexorable trend towards more personalized solutions.” That said, he also noted it’s “emblematic of the real interest and desire for more tax management -- particularly among the affluent and high-net-worth investors. For those reasons, I’m really positive about its future.”

But this year, however, when it comes to wealth management, direct indexing won’t be omnipresent.  Thing is, the technology that will abet the ability of direct indexing to maximize its potential isn’t in place, he noted. The personalization of financial plans and portfolios at scale would be enabled with such technology.

Rather, this year’s game plan will see technologists and wealth management firms remain on the road toward investing in overcoming issues evolving around personalization, added Honikman.

Based on a report by Cerulli Associates, over the next five years, direct indexing’s assets are expected to spike by more than 12% annually, according to investmentnews.com.

Jonathan Foster, president, and CEO of Angeles Wealth Management, recently penned an article on MarketWatch where he listed the benefits of direct indexing for retail investors. Foster noted that while direct indexing is primarily used by high-net-worth investors that are seeking to optimize their after-tax returns, the widespread elimination of brokerage trading fees and the growing availability of fractional share trading have led to greater adoption of direct indexing. According to Foster, the advantages that direct indexing can bring to a portfolio include ‘dirty money,’ outmoded mutual funds, and personalization. Foster says that ‘dirty money’ refers to investors expressing concern about how the companies they invest in make money. For instance, direct indexing offers advisors the ability to craft portfolios that exclude what their clients believe to be “dirty money.” Foster uses tobacco as an example. In this instance, direct indexing can help an investor craft a tobacco-free portfolio. Outmoded mutual funds refer to investors using mutual funds in taxable accounts and not having the benefit of starting with their own individualized cost basis, which can lead to distributable annual taxable gains. With direct indexing, investors can take advantage of tax-loss harvesting. Direct indexing can also offer investors an opportunity to customize portfolios with strategies such as ESG.

Finsum:A wealth management executive recently wrote an article on MarketWatch advocating for direct indexing due to benefits such as excluding certain securities, employing tax-loss harvesting, and customizing a portfolio for certain strategies.

While direct indexing might be ready for added use this year, according to one expert, it’s hasn’t quite hit prime time when it comes to the majority of the wealth management industry, reported fa.mag.com.

“I’m not necessarily of the view that 2023 will be the year that direct indexing becomes broadly democratized,” said Anton Honikman, CEO of MyVest. “There’s a different discussion about bringing direct indexing to a broader market. What’s hindering that is the need for more of an experience with direct indexing.”

He continued: “I’m a fan of direct indexing,” said Honikman. “I think it will continue to grow, and I think it’s emblematic of an inexorable trend towards more personalized solutions.” That said, he also noted it’s “emblematic of the real interest and desire for more tax management -- particularly among the affluent and high-net-worth investors. For those reasons, I’m really positive about its future.”

But this year, however, when it comes to wealth management, direct indexing won’t be omnipresent.  Thing is, the technology that will abet the ability of direct indexing to maximize its potential isn’t in place, he noted. The personalization of financial plans and portfolios at scale would be enabled with such technology.

Rather, this year’s game plan will see technologists and wealth management firms remain on the road toward investing in overcoming issues evolving around personalization, added Honikman.

Based on a report by Cerulli Associates, over the next five years, direct indexing’s assets are expected to spike by more than 12% annually, according to investmentnews.com.

Financial advisors? The bulk of them have the horizon over their shoulder. Nice setting, but you get the drift. Over the next decade, reported advisorperspectves.com last year, about one third of advisors will call it a day. While that’s not exactly raise red flags, what does stand out is that no one’s stepping into their shoes.

The load down: On average, each year, 30,000 people sat for the series 7 examination to become a financial advisor. Now, not is it only closer to 5,000, most applicants are taking it with an eye not on becoming financial advisors, but registered assistants. You read that right.

You don’t need Wikipedia to get the meaning: among clients of advisors who lack a formal succession plan in place, the best clients can do is gird themselves to restart with a new advisor. Problem is, that advisor knows neither them or their goals. Double whammy.

That said, last year, Avantax announced 66 recruits in the fourth quarter, according to thinkadvisor.com.

The company was a regular magnet for the year, attracting 258 recruits, Todd Mackay, president of Avantax Wealth Management, the firm’s independent broker-dealer division, stated.