In late 2022, the SEC amended its marketing rules for financial advisors. One change was that client testimonials were permitted under certain conditions. Many practices are seeing success by showcasing testimonials from satisfied clients. 

Michelle Tigani, the director of marketing and communications at Cassaday & Co., added a client testimonial page to the firm’s website, which simply shares positive feedback that the practice has received over the years. She plans to use these testimonials in ads, emails, and targeted campaigns. She notes that the client testimonial page is the most visited on the firm’s website, underscoring their efficacy.

Susan Wilkinson, the founder of Wilkinson Wealth Management, recommends reaching out to long-term clients to ask if they would be willing to share a testimonial. The firm displays these on their website and integrates quotes from clients into various marketing mediums such as social media, emails, and print. She believes it’s more effective and authentic for prospects to hear from satisfied clients rather than traditional forms of marketing which many instinctively tuneout.

Finally, Terra McBride, the chief marketing officer at Prime Capital Investment Advisors, asserts that financial advisors are in the relationship business. Client testimonials are the most effective way to communicate your ability to form positive and successful relationships. She recommends using testimonials in multiple formats, including websites, videos, and marketing campaigns. Ultimately, it adds more credibility and layers to help prospects get a feel for the client experience.  

Finsum: Late in 2022, the SEC amended its rules for client testimonials. Here’s why they are effective and how some practices are integrating testimonials into their marketing strategy.

Grayscale has been a pioneer in terms of bringing crypto investments to a wider group of investors with the launch of Grayscale Bitcoin Trust (GBTC) in 2016. For some time, it was the primary vehicle to get exposure to the asset through traditional means. However, the SEC’s approval of bitcoin ETFs means that the landscape is more competitive, with offerings from leading asset managers at lower costs. 

Now, Grayscale is launching a spinoff version of GBTC, which will have a much lower fee of 0.15% vs. 1.5% for GBTC. The new ETF, Grayscale Bitcoin Mini Trust (BTC), will have the lowest fee among all spot bitcoin ETFs. At launch, about 10% of GBTC’s assets will be moved to BTC, which means GBTC shareholders can convert holdings into BTC without having to pay capital gains taxes. 

With the launch of several spot bitcoin ETFs, there were net outflows from GBTC despite bitcoin’s impressive gains over the past few months. Previously, gains in bitcoin would coincide with a surge in inflows into GBTC. 

The success of new bitcoin ETFs from Blackrock, Fidelity, Bitwise, and Ark also shows that there is strong demand for low-cost ETFs in the crypto space. In contrast, GBTC was structured more like a mutual fund. 

Finsum: Grayscale is launching a spinoff version of its Grayscale Bitcoin Trust (GBTC), which will come with significantly lower costs as the asset manager looks to compete with the launch of several bitcoin ETFs.

JPMorgan had six advisor groups, managing a cumulative of nearly $15 billion in assets, leave the company on April 19. In total, 50 employees left the company to join competitors including Merril Lynch, Morgan Stanley, Citizens, and Wells Fargo.

Notably, all of the teams were originally from First Republic Bank, which collapsed last year during the regional bank crisis and was taken over by JPMorgan. About a third of its advisors departed First Republic during its turmoil, prior to the acquisition. Following these exits, First Republic’s private banking segment still had over 200 financial advisors, managing $200 billion in assets. 

First Republic was a leading provider of private banking and wealth management solutions for high-net-worth clients. It was also an aggressive recruiter of advisors and brokers from Wall Street banks, luring them with generous packages. In fact, one departing team was recruited from JPMorgan by First Republic in 2020.

Currently, JPMorgan has $3.3 trillion in client assets, managed by advisors at bank branches and its wealth management group, which services high  and ultra high-net-worth investors. It’s an indication that growing wealth management through acquisitions is not a straightforward process and is dependent on retaining advisors. 

Finsum: JPMorgan had six advisor teams depart the company last week. These advisors came to the company through the acquisition of First Republic and managed nearly $15 billion in assets.

The prospect of integrating alternatives can be daunting for many advisors due to the complexities involved, including numerous strategies, managers, and differing operational and tax processes. Nonetheless, there are key considerations for advisors navigating this terrain such as understanding that not all alternatives are alike, categorized broadly into growth, income, and diversifiers, allows for tailored allocations to meet client objectives. Also accessibility to alternatives has increased substantially, with platforms like iCapital and CAIS democratizing access and simplifying investment processes.

Additionally, the inadequacy of the traditional 60/40 model has led advisors to seek non-correlated strategies to bolster portfolio resilience, particularly during market dislocations. Historical analysis indicates that adding a 20% allocation to alternatives in a 60/40 portfolio can enhance returns and lower volatility, supporting the case for inclusion.

Shifting perspectives on longevity and retirement planning diminish the importance of liquidity, making less liquid investment opportunities, like private equity, viable options for younger investors. Overall, as accessibility to alternatives grows and traditional strategies face challenges, advisors are primed to deliver superior performance and resilience to clients through diversified portfolios.

Finsum: Advisors have more options and opportunities in the alt space than ever and should pass those uncorrelated returns on to investors.

In the daily rush of managing your practice, finding ample time to focus on client relationships and business growth can be a challenge. According to Cerulli Advisor Metrics, advisors globally spend just 55.3% of their time on client-facing tasks, with the remainder consumed by administrative duties, investment management, and professional development. Some advisors opt to delegate investment management responsibilities to third-party firms, allowing them to devote more attention to client engagement and asset growth.

Introducing managed portfolios into your practice can yield several benefits, starting with addressing capacity constraints. With each client possessing unique goals and risk tolerances, crafting individualized plans and managing portfolios can be time-consuming. While some practices employ in-house specialists or investment teams, scaling these resources may prove costly and logistically challenging.

By recommending third-party discretionary portfolio management, advisors can access experienced professionals without bearing the burden of direct development expenses. This approach not only offers clients access to seasoned investment professionals but also frees up advisors' time for more client interaction and personalized service. Ultimately, leveraging professional portfolio management services can enhance efficiency, scalability, and client satisfaction within your practice.

Finsum: Its important to realize the that your expertise could be best served by being in the middle of a client and the portfolio construction leveraging technology to your advantage.