Displaying items by tag: advisors

Financial advisors intuitively grasp the importance of planning to help their clients reach their financial goals. As business owners, advisors need to apply the same principles with succession planning to maximize the value of their practice. A succession plan should provide a contingency plan for unforeseen circumstances in addition to detailing how the practice will transition in the future. Here are some common mistakes to avoid.

The first mistake is to not have a proper understanding of the value of your practice. This includes financial as well as other considerations such as the impact on your clients, the organizational structure of your firm, and how the firm will function without you.

Another mistake is to be unclear clear about your needs and wants in order to determine the ideal successor. With this selection, it’s important to find alignment in terms of investment philosophy, location, mission statement, and how they will continue to serve your clients effectively.  

Many advisors also err by not sharing their succession plan with key stakeholders like employees, clients, family members, etc. Rather, the succession plan and any iterations should be shared with everyone to ensure that there is no lack of clarity. It can also help with client retention and recruitment. 

Finsum: Succession planning is quite important for financial advisors for several reasons. Here are some mistakes to avoid. 

The steady stream of brokers exiting Merrill Lynch continues as the Ruccio Group, based in Miami and managing $1.37 billion, left for RBC Wealth Management. The team is led by Jeremy J. Ruccio and is composed of 2 advisors and 6 client associates. 

In a statement, Ruccio attributed the decision to wanting to retain the group’s personalized attention and smaller firm feel with the resources, leverage, and insights of a global financial institution. Ruccio started at Merrill Lynch in 2008 and was ranked #24 on Forbes’ best in state wealth advisors list this year and #29th on the America’s best next generation wealth advisors list in 2021.

Currently, RBC has around 2,100 brokers and has $544 billion in client assets. Although its wealth management division is smaller than many of its peers, it’s had success in recent years luring brokers from larger firms. To compare, Merril Lynch and parent company, Bank of America, have over 19,000 advisors across its wealth management division. 

Last week, it lured a $450 million team from Morgan Stanely which was based in Philadelphia. In September, it recruited a 41-year Merrill broker who managed $340 million in assets. In the prior month, RBC landed a UBS team based in Atlanta which had $5.5 billion in client assets and $22 million in annual revenue. 

Finsum: RBC is having success luring brokers from larger competitors. It recently landed the Ruccio Group, based in Miami which manages $1.37 billion in client assets.

Model portfolios can help many financial advisors save time and focus more energy on their clients. They are based on the research, experience, and work done by asset managers and have been shown to offer better performance with less volatility during periods of market turmoil. 

The category is rapidly expanding with 18% growth over the last 5 years and expectations that total assets will exceed $10 trillion over the next 5 years. These offerings can also be customized according to every client’s circumstances. 

In terms of the best way to introduce model portfolios to clients, WisdomTree’s research shows that the best results are with smaller and tax-exempt accounts, where there may be less hesitancy when it comes to trying a new approach. 

The research also indicates that younger clients who are more open to risk will be quicker to embrace model portfolios. In contrast, clients who are closer to retirement age are less likely to change course. However, more than 50% were willing to use model portfolios if properly explained. 

The research also suggests that clients will be more willing to use model portfolios if the experience and credentials of the asset manager are emphasized.

Finsum: Model portfolios offer many benefits to advisors. The primary one is it frees up more time for client service. 

Succession planning is increasingly important with the heightened pace of M&A activity and the ‘greying’ of the industry. It can ensure the smooth transfer of clients, assets, and responsibilities when an advisor retires. 

The process entails identifying who is best qualified to be your successor, ensuring clients concerns are addressed, and regulations are followed. The goal is to ensure that the business continues operating without interruption while preserving the value of the practice.

In terms of identifying potential successors, it’s important to determine whether there is the right alignment with the firm’s values, vision, and approach towards clients in addition to the proper experience, knowledge, and skills. They must also possess some leadership ability as they will have to make important decisions and lead the firm. Finally, these attributes can be developed through mentoring and guidance. 

Another element is maximizing client satisfaction and retention through the process. This can be done by introducing the new advisor to clients well in advance and working in tandem for some period before fully shifting responsibilities. It’s also important to stay in regular communication with all stakeholders during the process including clients, employees, and other partners. 

Finsum: Succession planning is increasingly important due to the ‘greying’ of the industry and increase in M&A activity. Here are some important considerations.

For AdvisorHub, Holt Hackney interviewed Kimberly R. Nelson, an advisor at Coastal Bridge Advisors, on the factors behind her success, and what makes her practice unique. Nelson was ranked #5 on AdvisorHub’s Top 100 RIAs to Watch List and credits her success to using empathy to understand the emotions that are driving the behaviors and actions of her clients. 

Nelson is an empath which means she can intuitively empathize with her wealthy clients. Despite having wealth, her clients still face the same challenges as others along with additional complications. 

Empathy helps her connect with her clients and provides support and resources when it’s needed most. She’s also pioneered serving female clients after divorce who may find themselves with a windfall but no professional network to help them manage this money. 

In terms of her investing philosophy, she believes that quality assets will provide value to a portfolio and outperform in the long-term. She believes that her job is to ‘shepherd’ her clients through periods of volatility and recommends diversified asset allocation and a well-constructed financial plan that reflect the needs and concerns of the clients. 

Finsum: Kimberly R. Nelson is an empath, and she attributes this to her success as a financial advisor.