Displaying items by tag: clients

The case for model portfolios has never been better. Investment managers are expanding their model portfolio offerings while turnkey asset management platforms continue to grow. Since portfolio management is just one piece of a financial plan, why wouldn’t advisors want to take advantage of model portfolios to free up time to spend with their clients? However, some advisors have a reason for resisting this trend and insist on managing portfolios themselves. For instance, Ryan Johnson, managing director at Buckingham Advisors told InvestmentNews, “By managing our own portfolios, we’re adding value.” Johnson added that they feel they have a lot of control over the individual stock selection, especially when it comes to tax planning. Paul Schatz, president of Heritage Capital also mentioned control as to why he builds client portfolios from scratch. He stated, “Control is a huge driver.” Robert Steinberg, chief executive at RIA Blue Chip Partners told the magazine that they focus on individual securities since “clients are more involved, it’s easier to tax-loss harvest, they know what they own.” While a 2020 research report from InvestmentNews cited numerous reasons for outsourcing portfolio management such as freeing up time, some advisors still see portfolio management as a core component of financial planning. The report also listed the top reasons for not using a model portfolio such as investment research strength, flexibility, and cost.

Finsum:While model portfolios continue to gain steam among financial advisors, there are still some that prefer to build portfolios themselves due to control, adding value, and getting clients more involved.

During a recent ThinkAdvisor FMG sponsored webcast titled “How to Drive and Close More Leads in 2023,” Samantha Russell, chief evangelist at FMG, and Susan Theder, chief marketing, and experience officer at the firm, outlined ways advisors can improve their lead generation efforts this year. Both Russell and Theder believe that holding webinars and other events is a great way to generate leads, but have found that only 23% of advisors are utilizing them. They recommend that advisors pick topics that go beyond financial issues as most people are not thinking about their financial issues all the time. For instance, Theder said that in the “most successful webinars I’ve seen, advisors do combine multiple different professions.” So, an advisor could talk about wellness and bring on a nutritionist, an estate planner, and a mental health professional and have a discussion that covers more than just the financial aspect. They also recommend picking topics that are timely. For instance, during February, tax issues are a great topic to discuss. They also suggest keeping the webinars short. Russell says “Between 30 and 60 minutes is really ideal for a webcast or webinar.” In terms of marketing your webinar, make sure you’re really specific with the title. Russell and Theder also recommend sending at least three promo emails and use Google Reviews if your firm allows it for SEO purposes.

Finsum:During a recent ThinkAdvisor webcast, Samantha Russell and Susan Theder of FMG recommend utilizing webinars to generate leads this year.

Direct indexing was one of the hottest topics in the financial services industry last year. The strategy has typically only been utilized by wealthy clients with complex portfolios, but that’s a mistake, according to Randy Bullard, global head of wealth at Charles River Development. Bullard, who was presenting along with Ben Hammer, a sales executive at Vanguard, at the ETF Exchange conference, pushed back on the notion that direct indexing is a niche product for select clients. He stated, “A direct indexing solution is uniquely designed to catch money in transition, and it’s suitable for all types of investors. That’s the transition the industry is starting to go through. Once you conquer the operational complexities of direct indexing, it becomes a broad market solution.” In fact, Hammer believes that it gives “advisors an additional edge with clients.” Hammer added that the volatility of 2022 provided the perfect environment to showcase the strengths of direct indexing. He stated, “Right now, most of the reason people are using direct indexing is for taxes, but we’re telling people not to fall in love with that after-tax return from last year. Volatility created an opportunity last year, but the opportunity hasn’t passed by. Every year there are some stocks that fall in an index.” Hammer is also seeing increasing adoption among accounting firms that work with advisors.

Finsum:While direct indexing has primarily been a tool for the wealthy, two panelists at the ETF Exchange conference believe that all investors can benefit from it, which gives advisors an edge with clients.

According to a recent announcement, Raymond James Financial has nabbed a Merrill Lynch advisor managing $250 million in Miami. Daniel Laiter, who has been in the industry for 25 years, joined Raymond James’ Alex. Brown unit on January 20th. He started his career at Lehman Brothers in 1997, joined Credit Suisse by way of its Donaldson Lufkin & Jenrette Securities predecessor in 2001, and returned to Lehman for two years between 2006 and 2008 before joining Merrill. Laiter, who focuses on clients in Mexico, will report to Eric Termini, regional executive for South Florida. As part of the announcement, Termini said “Danny represents one of the top advisors in the industry.” Laiter was convinced to move in part by a “client-centric” culture and the “experienced management team” at Raymond James. In June, Raymond James folded Alex. Brown into its core employee channel, Raymond James & Associates, led by Tash Elwyn. The unit had around 150 advisors at that time, a small fraction of the roughly 3,450 advisors in the RIA division. Raymond James announced four additional hires into the unit last year, including three who joined in Miami.

Finsum:Raymond Jamesadds to its Alex. Brown unit with the recruitment of a Merrill Lynch advisor managing $250 million.

According to a new report, advisors may be missing out if they are reluctant to target next-gen investors. Research from Fidelity Institutional Insights found that investors under the age of 40 are inheriting more than $540 billion in the United States every year, 30% of the total wealth transferred. In addition, data from Cerulli Associates shows that the demographic will control three-quarters of $84 trillion in inherited wealth by 2045. The Fidelity report is a wake-up call for advisors that shy away from young clients due to higher debt, fewer assets, and generational differences. Fidelity Investment’s vice president of practice management and consulting, Anand Sekhar, said the revenue-weighted age of the average Fidelity advisor’s client is 65. According to Sekhar that creates a huge problem for advisors in the future. With older client rosters, advisors could see widespread drawdowns and not enough clients to take their place. Making matters worse is that only 13% of advisors are engaging with clients’ children and grandchildren, which puts billions currently managed at risk. Fidelity’s data suggests that if firms can reduce the revenue-weighted age of clients by just seven years, from 69 to 62, it can increase a firm’s growth tenfold. The research also suggests that establishing those relationships now could produce greater returns as investors under 40 are investing earlier than their parents and are willing to pay for advice.

Finsum:With the average revenue age of clients nearing 70, many firms could see soon see massive withdrawals with no clients waiting in the wings, which is why advisors need to start engaging with clients’ children and grandchildren now.