Displaying items by tag: wealth management

Bringing home the bacon.

Before taking their talent to UBS Wealth Management, a five person Connecticut team was grinding, managing $700 million in Greenwich, according to a recent announcement, reported advisorhub.com. The team had been at Merrill Lynch.

Also bidding Merrill adieu was John Foley, who managed $340 million in client assets. He landed at RBC Wealth Management, the announcement indicated.

In terms of recruitment, it seems Merrill’s been a favorite target of UBS. That includes a group of 18 in Columbia, South Carolia. A total of $2.6 million was managed by the team. 

In other industry activity, LPL Financial scored a group of finance advisors with $260 million in client assets, according to investmentnews.com. Specializing in retirement programs for schools, universities and hospitals, known as 403(b) plans, the group had previously been at Valic Financial Advisors Inc.

“We specialize in financial education and breaking down complex financial situations to a place where clients can better understand and be more comfortable with their decisions,” said financial advisor Angelo Burns in a statement. He’d been at Valic since 2011.

Picking the right niche can really help an advisor differentiate themselves in a crowded market to create a unique brand. Typically, a niche means that an advisor is focusing on a particular demographic such as a particular profession or demographic. But, it can also refer to advisors who specialize in specific areas such as financial planning or alternative investing.

Specialization can lead to more knowledge and expertise. It’s also likely that prospects will seek an advisor out who has more experience in their area of interest or need. In terms of the best niches, one strategy is to specialize in a particular stage of the planning process.

Nearly everyone’s most important financial goal is to prepare for retirement. Therefore, retirement planning is an evergreen niche for advisors and also where they can be most impactful. This involves becoming well-versed about various retirement plans and options. Ultimately, it’s about helping retirees and prospective retirees have the best quality of life. 

Another possible niche is to focus on younger clients. This would involve being digitally savvy and understanding their needs and goals with a major emphasis on education around personal finances and investing. Many younger clients also stand to inherit money from older generations given the country’s demographic realities.

Finsum: Picking the right niche is an important decision for every advisor. Here are some tips on picking the right niche and some examples.

Although the advisor recruiting frenzy is certainly slowing down, two trends clearly standout. One is that LPL Financial has been a big winner with its variety of models and offerings for incoming advisors. The second is that Merrill Lynch has been a big loser with several high-profile exits.

This continued this week with two teams leaving Merrill Lynch who collectively manage over $1 billion in assets. The Coutant Group which is led by Kevin and Keith Coutant announced that they are leaving for UBS. The five-person group manages $700 million in assets with lead advisors Keith and Kevein having spent 23 and 20 years at the company, respectively. At UBS, they will be joining Soundview Wealth Management and continue operating in Connecticut. 

So far in 2023, UBS has recruited away nearly $4 billion in client assets from Merrill Lynch. Reportedly, the bank has been offering generous packages to brokers including guaranteed back-end bonuses and deals that are in the 400% range. 

The other major exit from Merrill was John Foley who managed $340 million in assets and left for RBC. According to reports, the exits are motivated by competitors offering more generous compensation and providing more freedom in terms of product recommendations and client relationships.

Finsum: Merrill Lynch has seen a steady stream of exits from advisors and brokers with large books. The latest are more than $1 billion in assets leaving for UBS and RBC. 

With major technological disruption happening in every industry, it’s natural to consider how the financial advisor industry will change over the coming decades. After all, the industry is unrecognizable to how it was a few decades ago. Here are some of the trends that will shape how the industry evolves. 

People, especially the younger generation, are increasingly spending more time in the digital world including when it comes to managing their finances. Many in this cohort would rather communicate with their advisors over text, email, or video calls. 

Artificial intelligence (AI) presents a threat and opportunity to advisors. AI is being used to augment robo-advisors and give them more interactive capabilities and personalized advice. While this could lead to some market share gains, advisors can also utilize AI to augment their own businesses by improving back-end operations, automating low-level processes, reducing expenses, free up time for client services, and boosting marketing efforts.  

Another major opportunity is the massive aging of the population and retirement of the baby boomer population. As this generation passes, trillions in wealth will be passed down to Generation Z and Millennials. Successful advisors will be able to form trust and relationships with older clients and their children.

Finsum: The financial advisor industry is going to face major challenges and opportunities over the next couple of decades. Demographics and technology are two of the most impactful.

Financial advisors pour so much time and energy into building their businesses and cultivating high-quality relationships with clients. Yet, they often don’t put in a fraction of the thought when it comes to succession planning even though the implications are massive in terms of maximizing the firm’s value or ensuring that employees remain satisfied and business continues successfully operating. 

For ThinkAdvisor, Buckingham Strategic Wealth’s MIchael Kitces shares some advice on successful succession planning. He recommends starting with honest and frequent dialogue between owners and younger advisors who may have expectations about their role in the firm’s future. Older advisors can also choose to transition at their own pace and may give up certain responsibilities while continuing to do the parts of the job they enjoy. 

Part of this communication strategy is to be open about uncertainty rather than repeatedly changing plans which can lead to frustration. Another common mistake is to think about every decision as being binary rather than thinking about compromises between valid, competing interests. Finally, remember that succession planning is ultimately about maximizing the value of the firm in the present and setting it up for success in the future. 

Finsum: Succession planning is the final major decision that advisors will make in their careers. Here are some ways to maximize your chances of success.