Displaying items by tag: wealth management

Monday, 25 September 2023 11:15

More Merrill Exits

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. 


Published in Wealth Management
Friday, 22 September 2023 09:49

The Future of Financial Advice?

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.


Published in Wealth Management
Friday, 22 September 2023 09:45

Succession Tips for Advisors

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. 


Published in Wealth Management

VettaFi announced that it would be acquiring EQM Indexes, a provider of custom thematic indexing specialists. It marks VettaFi’s second acquisition in the space as the indexing and ETF data provider continues increasing the amount and quality of offerings for asset managers. In April, it acquired ROBO Global Index suites.


EQM uses a quantitative approach to construct customized, niche indices for industries like e-commerce, rare earths, block chain technology, etc. Most of its customers are advisors and wealth managers who are based in North America, Europe, or Asia. 


Following the completion of the deal, VettaFi will have more than 300 indexes that comprise $19 billion in assets including ETFs and direct indexing products. The firm was founded in 2022 through a merger of various entities in the ETF data and indexing space.


Clearly, the firm believes that direct indexing has more room for growth. According to Brian Coco, VettaFi’s head of Index Products, “A great investment idea can often remain just that: an idea. But with a well-constructed index, great investment ideas can become great investments. Building custom indexes is something at which EQM has long excelled, and we are very excited to add EQM’s expertise to our index offerings.”

Finsum: VettaFi announced the acquisition of EQM Indexes, a provider of custom indexing solutions. It marks a continuation of the firm’s investment in the direct indexing space.


Published in Wealth Management
Friday, 15 September 2023 11:20

Advice on Acquiring a Practice

For financial advisors who are serious about growth, the most effective strategy is to simply acquire another practice. Of course, this requires significant resources in addition to a well-thought out plan to integrate the new practice into the existing one. It also means making tough decisions when it comes to headcount, organizational structure, and management. Most importantly, there can be no compromise when it comes to the client experience on both sides of the ledger. 


Advisors should consider this possibility especially as it’s going to be a buyer’s market given that so many advisors are nearing retirement age. Based on research from Cerulli Edge, nearly 40% of advisors will be retiring over the next 15 years. Additionally, advancements in technology mean that overhead costs don’t necessarily have to meaningfully rise with an acquisition. 


According to Bill Williams, the president of acquisitions at Ameriprise, the most important step is to conduct proper due diligence to ensure that no regulatory issues arise, and there is no issue with the financials of the firm being acquired. He also says that a common mistake is to use an acquisition to solve a problem. Instead, the buyer must come from a position of strength which means that you have a thriving, profitable practice with a healthy culture. 

Finsum: While there are many growth strategies for advisors, acquiring a practice can supercharge growth. Here are some important considerations. 



Published in Wealth Management
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