Displaying items by tag: wealth management

The last thing a retiring financial advisor might want to consider is making a significant change to their business. Their focus is often on finding the perfect partner to join their practice so they can transition out over the next few years. However, an overlooked option with significant benefits lies in switching broker-dealers.

Think of it as a reverse recruitment process. Just as firms entice top advisors with cutting-edge technology, competitive compensation, and career development opportunities, these same features can attract a larger pool of potential buyers for a practice. Joining a progressive firm can also expand an advisor's recruitment options, giving them access to a broader range of advisors who might be interested in taking over their business.

Making a switch might seem like extra work at the tail end of a career, but the advantages can be substantial. By aligning with a forward-thinking firm, an advisor may find a smoother transition to their succeeding partner and potentially even a higher purchase price for their practice. Advisors should not dismiss the power of changing broker-dealers as part of their succession plan – it could be the key to a successful and rewarding exit.

Finsum: Financial advisors planning their succession should explore how switching broker-dealers could be their ticket to a rewarding exit.

UBS Wealth Management Americas posted a small increase in advisor headcount and added $300 million in new assets during the third quarter. Both are the first gains after two quarters of declines. Last quarter, UBS had outflows of $3.4 billion. 

The unit posted profits of $307 million, which was $231 million less than last year’s Q3. The bank attributed this to lower commissions as more clients shift towards a fee-based planning model. Another factor is that UBS CEO Sergio Ermotti noted that it doesn’t include interest and dividends when calculating asset growth unlike US competitors. In future quarters, the company will be calculating asset growth in this manner. 

In the quarter, advisor headcount increased from 6,071 to 6,142. However, headcount is still down 2% on a year-over-year basis. The company said in part this is due to its recruitment efforts focusing on a small group of high-producing advisors. Ermotti added that the company is resuming growth bonuses for any advisors who add million-dollar clients. 

Overall, US brokers managed $1.76 trillion in client assets which was up 16% compared to last year primarily due to asset price appreciation. UBS’ Americas unit is a laggard relative to other geographies within the company and its US-based competitors when it comes to asset growth. 

Finsum: UBS posted a small increase in net new assets and advisor headcount. The company is focused on boosting asset growth through the recruitment of high-earning brokers. 

Having a strategy to acquire new clients is necessary for any financial advisory practive to grow and thrive. Yet, there are multiple paths to accomplishing this goal. Some examples are cold calling, digital marketing, in-person networking, etc.

While the tactics can vary, the principles are the same. This entails identifying your target client, figuring out your unique value proposition, and identifying the best medium to reach prospects in a way that is complementary to your personality.

It can also be helpful to spend more time with your existing clients. This will strengthen these connections and increase the chances of getting a referral. These types of referrals have a higher chance of conversion given a stronger foundation of trust. It’s also a reminder that the most important job of an advisor is to build relationships which can only be done by spending time with clients and prospects.

By making financial planning a family affair, you can increase your chances of serving the next generation. This will give you an opportunity to spend time and build a relationship with multiple family members which could ultimately be assets in terms of recruiting, retention, and finding leads. 

Finsum: There are many tactics when it comes to landing new clients for financial advisors. However, many successful strategies have some important principles in common. 

A major consideration for many firms is the aging of financial advisors. It’s estimated that over the next 5 years, 25% of advisors will be approaching retirement age. This demographic reality means that recruiting will be a greater challenge and of even more importance. 

Similar to financial planning, effective recruiting means setting clear goals and identifying what your firm needs. This will ensure that your decisions and actions are in alignment with the long-term vision. 

When looking at which groups to target, some common pools to consider are interns and recent college graduates, emerging advisors, and paraplanners. In terms of finding the best candidates, it can be helpful to do some research on competitors to see what they are offering recruits in addition to understanding what prospective hires value. 

Many may not be familiar with the various opportunities and career paths of an advisor. Nor will they be familiar with how an advisor can have a meaningful impact on their clients’ lives so having some personal examples of helping clients and building relationships will be particularly useful. Many candidates also will want some visibility around how the business works, and how the progression will work in terms of professional development, compensation, responsibilities, and partnership opportunities.

Finsum: A major challenge for the financial advisor industry is that 25% of advisors are approaching retirement age. This means that effective recruiting is of greater importance and value.

Being a financial advisor certainly has its challenges due to the unique nature of the industry. One aspect of this is the difficulty of differentiating your offerings and services from your competitors especially when it comes to attracting new clients. 

This means that an effective marketing strategy is essential to long-term success. It can help in building a solid pipeline of prospects and increasing your conversion rate. There are many well-trodden templates that advisors can follow such as building a website or a newsletter. However, your marketing strategy can be more creative and go beyond these generic ideas.

Additionally, it can result in more chances of success if it’s something you enjoy, can be consistent with, and reflect your personality which will lead to a more authentic connection with prospects. 

Some of the more outside-of-the-box ideas include sharing ideas on online forums or message boards. Here, the key is not to make a hard sell but instead show your expertise. It can be valuable in building SEO visibility while creating a more genuine connection than other marketing channels.

Some other ideas to consider are direct mail marketing, hosting a client appreciation event, or sharing quizzes or polls on social media. The commonality of these marketing ideas is that you can experiment with different approaches, show off what makes you unique, and target your ideal clients. 

Finsum: Marketing is more important for financial advisors than most industries given that it can be difficult to easily differentiate services and offerings. Here are some out-of-the-box ideas to consider.