Displaying items by tag: clients

New York)

Yesterday we ran a piece explaining the level of AUM advisors need to successfully breakaway (cheat sheet: $50m-$100m). Today, we wanted to hit on another key topic: what percentage of clients typically come with an advisor when they break away? Now, this obviously varies a great deal based on particular circumstances, but according to Kestra, the typical rate is 80% in their experience.

FINSUM: This is useful, but only to a point because many advisors will have a great deal of their assets concentrated in a small group of clients, meaning it is a fairly tight number of make or break accounts.

Published in Wealth Management
Monday, 30 December 2019 11:35

Why Advisors are Really Going Independent

(New York)

There is a little known stimulus behind the current trend of advisors breaking away from wirehouses. While many cite freedom of operations and compensation as key reasons for leaving wirehouses, one of the big driving forces is much less appreciated: the requests of clients themselves. According to Shirl Penney, CEO of RIA network Dynasty Financial Partners, “Clients are not simply following their advisors, but sometimes giving them the idea to break free … That’s the dirty little secret that not a lot have been talking about”. High net worth clients increasingly want their advice separated from the manufacturers of the products they buy, which means going independent makes sense for advisors. “So if you’re a million-dollar client of one of our advisors, you now can get independent advice, separate and safe custody and products from around the street the same way that may have been reserved for a billionaire 20 years ago”, according to Penney.

FINSUM: This topic is quite poorly discussed, but seems very salient. We would welcome any emails/opinions from advisors about the extent to which they hear this from clients. Reach us at This email address is being protected from spambots. You need JavaScript enabled to view it..

Published in Wealth Management
Wednesday, 27 November 2019 12:47

What You Need Before Going Independent

(New York)

A lot of advisors have been going independent lately. Whether you are moving to start your own RIA or want to join a large independent broker-dealer network, there are a lot of intricacies involved with running your own shop. Before you even think about the logistics of moving, it is important to assess whether you have the skills to succeed. There are essentially three skills that one needs to become a successful independent advisor: operational experience, in-depth relationship management skills, and sales/business development acumen. Operationally, you will likely have a tight budget when first breaking away, so understanding the nuts and bolts of the business, like migrating client accounts, is critical. Secondly, you will need to be able to concisely define the nature and scope of your relationship with clients in order to keep them happy for the long-term. Finally, you will need to be able to convince people why they should manage your money (without the weight of a wirehouse brand behind you!).

FINSUM: As a companion to the above, Michael Kitces notes that most successful independent advisors had seven years experience before going it alone.

Published in Wealth Management
Monday, 22 April 2019 12:41

Why Financial Advisors Should Work in Teams


The lone wolf financial advisor is steadily becoming a rarity in the wealth management industry (Edward Jones advisors aside!). For instance, 77% of Merrill Lynch advisors now report that they work in teams, up from 48% in 2013. Whether you work solo or in a team, one thing many might not know is that FA teams tend to grow their AUM and client base much faster than solo advisors. The advantage seems to be derived from two key aspects. The first is that a team has a wider variety of skill sets to help deliver comprehensive services to clients. The other is that having a team in place makes clients worry less about the impact of losing a single advisor via illness, death, or leaving the firm.

FINSUM: The team approach seems to be working across the industry, with clients liking the change. That said, forming teams comes with its own set of significant risks and considerations.

Published in Wealth Management

(New York)
“Cross-selling” has been the name of the game at Bank of America Merrill Lynch for years, but Merrill is about to take the idea to new heights. Partnering with BofA, the Thundering Herd is now offering mortgage discounts of up to half a percentage point to clients if they bring more of their business to the brokerage or the bank. According to Barron’s “Merrill is testing the rate reductions in California, Oregon, Washington, New York, New Jersey, Connecticut and Florida. The 50-basis-point reduction is available to clients with $500,000 in deposits or investments to qualify for the half a percent mortgage reduction.”

FINSUM: This could be a considerable competitive advantage for luring clients away from other brokerages. We expect Wells Fargo will follow suit, but it will be harder for Morgan Stanley and UBS to do so.

Published in Wealth Management
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