Displaying items by tag: clients

Managing investments can be overwhelming for advisors amidst their busy schedules, but model portfolios offer efficiency, diversification, and transparency, allowing advisors to focus more on their clients. Advisors have the option to create their own portfolios or use third-party models, with the former being more popular as it allows them to tailor investments while maintaining efficiency. 

The primary benefit of model portfolios is the quick and efficient implementation of advisors' best ideas, essential for business growth. While clients benefit from the advisors' expertise, there may be instances where they desire investments outside the model, requiring advisors to balance client preferences with their investment strategies. 

Overall, model portfolios streamline investment management, enabling advisors to concentrate on building strong client relationships and providing personalized financial guidance.

Finsum: Models not only meet the clients’ needs but they give more opportunities to develop a relationship with clients to better understand financial concerns. 

Following the collapse of First Republic, many believed that there would be a negative impact on financial advisor recruiting. However, this concern was unfounded as more than 9,600 experienced advisors switched firms last year, which was a 7.5% increase from 2022 according to a report from Diamond Consultants. 

Jason Diamond, executive VP of Diamond Consultants, authored the report. He considers an experienced advisor to be one with a minimum of 3 years of experience. He believes that the healthy recruiting figures reflect that advisors are ‘taking a long-term view of the business in terms of what move will best position them for the next five years, not just today.” 

The two biggest moves were a team from UBS, managing $5.5 billion in assets, moving to RBC, and a private banking group at Bank of America, advising on $4.5 billion in client assets, joining Fidelis Capital, an independent wealth management practice. 

Most moves were within the same channel, such as wirehouse to wirehouse, even though many headlines focus on large teams going independent. For 2024, expectations are for another strong year of recruiting, although weakness in financial markets could lead to less activity. Many wealth management firms now offer multiple affiliation channels for incoming advisors. Additionally, private equity has also been getting more involved which has also pushed valuations higher. 

Finsum: Many thought that financial advisor recruiting would drop off in 2023 following the collapse of First Republic. However, this was incorrect as recruiting was up 7.5% compared to 2022. Expectations are that recruiting in 2024 should be strong as well.  

Bank of America CEO Brian Moynihan is looking to increase the profitability of the bank’s wealth management unit. He wants to achieve this by increasing scale, hiring more advisors, promoting more cross-selling of products, and investing in technology. 

In Q4, Bank of America had a net gain of 175 brokers with most of the growth coming from graduates of its training program. It ended the year with 18,916 advisors across all units which was a 2% decline from the end of 2023. The bank has also sought to stem the tide of defections over the past few years by upping compensation to match its competitors.

Moynihan wants to expand headcount and increase the bank’s presence in underserved markets. A key aspect of this is its revamped broker training which was integrated with Merril in 2021 and has increased retention rates of new advisors. 

Another element of the growth plan is to increase use of Bank of America financial products across its ecosystem. This means getting wealth management clients to use Bank of America financial products such as home loans or bank accounts, or private banking customers should be using Merrill for wealth management rather than an outside firm. He sees this as an opportunity to increase sales with minimal expense compared to other channels. 

Finsum: Bank of America CEO Brian Moynihan was positive on the wealth management unit’s performance. He sees future growth coming from adding advisors, investing in technology, and increasing cross-selling of products. 

A major trend in wealth management is personalization. Due to new technology, financial advisors are now able to offer customized products and solutions without sacrificing scalability. It can help clients reach their financial goals while also creating a stronger relationship between advisors and clients.  

A survey conducted of high net worth investors by PwC showed that 66% are interested in more personalization, while 46% are looking to change or add new advisors within the next couple of years. For advisors, offering personalized solutions will be increasingly important in terms of recruiting and retaining clients.   

Personalization is also impacting model portfolios. Until recently, most model portfolios were built around the traditional portfolio, combining stocks and bonds, which limited customization. Now, there are more options to customize model portfolios including by factors, themes, and values. 

According to research from MSCI, wealth managers can allocate to these strategies without worry that it would have an adverse impact on a portfolio in terms of returns or diversification. Further, these model portfolios are customized but still retain their core benefits. For advisors, this means spending less time on investment management and more time on client service, financial planning, and growing the business.

Finsum: Personalization is a major trend in wealth management. Now, model portfolios can be customized which is bringing a variety of benefits for advisors and clients without an adverse impact on returns or diversification.

Understanding the evolving landscape of women's financial influence is crucial for advisors, as women are increasingly controlling wealth and making key financial decisions. With studies projecting women to control $30 trillion in U.S. assets by 2030 and their wealth growing faster than men's, this demographic shift presents significant opportunities for advisors to tailor their approach. 

Women often have different financial goals, risk tolerances, and longevity considerations, emphasizing the need for advisors to understand their unique needs and priorities. Building trust and establishing personal connections are essential for long-term client relationships in the women's market, as women value communication and partnership with their advisors. 

To effectively engage with female clients, advisors should focus on education, empowerment, and holistic financial planning, addressing their specific concerns and objectives. Tailoring strategies, asking meaningful questions, and using storytelling techniques can help advisors connect with women clients and build successful, lasting partnerships.

Finsum: Better understanding the financial needs of female clients will help you be more strategic in growing your platform. ad