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The Latest In Financial Advisor #FinTech (January 2020)

January 6, 2020 07:06 am 4 Comments CATEGORY: Technology & Advisor FinTech

Welcome to the January 2020 issue of the Latest News in Financial Advisor #FinTech – where we look at the big news, announcements, and underlying trends and developments that are emerging in the world of technology solutions for financial advisors and wealth management!

This month's edition kicks off with the big announcement that Fiserv is spinning off its 'tiny' (at least relative to Fiserv’s banking and payments business) investment services unit, valued at $880M, to a private equity firm focused on aggressively growing Fiserv’s presence in the enterprise ‘WealthTech’ space, positioning the company to become an even more direct competitor for large-broker-dealers and large-RIA enterprises with Envestnet, Fidelity, Morningstar, and Broadridge, in what may spur a heavy reinvestment cycle into more capable enterprise systems for large advisor platforms.

From there, the latest highlights also include a number of other interesting advisor technology announcements, including:

Invesco acquires RedBlack rebalancing software as asset managers increasingly look to (vertically integrated) model marketplaces as the future of ETF distribution
Pershing launches its own “Subscribe” fee-based annuity marketplace, integrated directly to its Managed Accounts platform, to compete against Envestnet’s own new Annuity Exchange
Merrill Lynch abandons the ‘bring your own device’ approach of the 2010s and stakes its compliance oversight in the 2020s on brokers carrying two smartphones (personal and business)
SEI launches a Developer Portal with new APIs in an attempt to become more of an advisor FinTech platform hub (perhaps eyeing the potential demise of TD Ameritrade’s VEO after the Schwabitrade merger closes?)

Read the analysis about these announcements in this month's column, and a discussion of more trends in advisor technology, including Envestnet announcing new enhancements to PortfolioCenter (and signaling that PortfolioCenter isn’t ‘doomed’ to be deprecated under Envestnet, and may simply become ‘Tamarac Lite” instead), Schwab launches a robo-for-retirement-income offering that overlays tax-sensitive retirement distributions on top of its robo-investments-plus-human-CFPs offering, Investor.com rolls out a new advisor-vetting platform that aims to present consumers aggregated regulatory data to spot relevant disclosures and conflicts, and Vanguard capstones its 2-year battle with TD Ameritrade over pay-to-play access by dropping stock and option trading commissions to $0 (on top of its already-free ETF trading platform) as TD Ameritrade is queued up for a sale.

And be certain to read to the end, where we have provided an update to our popular new “Financial Advisor FinTech Solutions Map” as well.

I hope you're continuing to find this column on financial advisor technology to be helpful. Please share your comments at the end and let me know what you think!

*And for #AdvisorTech companies who want to submit their tech announcements for consideration in future issues, please submit to [email protected]!

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#FASuccess Ep 154: (Re-)Igniting Your Advisor Marketing By Defining Client Avatars And Removing Impediments To Action, With Mary Beth Storjohann

December 10, 2019 07:11 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Welcome back to the 154th episode of Financial Advisor Success Podcast!

My guest on today's podcast is Mary Beth Storjohann. Mary Beth is the chief marketing officer for Abacus Wealth Partners, an independent RIA based in Santa Monica, California that oversees nearly $2.6 billion of assets under management for almost 1,700 clients.

What's unique about Mary Beth, though, is that up until very recently, she was the founder of her own independent advisory firm, Workable Wealth, and despite (in fact, because of) the successful growth of her solo practice, Mary Beth decided the best way to continue advancing her own personal mission of expanding her financial planning impact was to sell her firm and to take on a marketing leadership role in an even larger firm instead.

In this episode, we talk in-depth about what it means to be a chief marketing officer of a large independent advisory firm. How Mary Beth allocates a marketing budget of just 2.5% of revenue that still adds up to nearly half a million dollars to allocate for marketing purposes, the relative split of marketing dollars towards staff to help implement marketing strategies versus direct spending on sponsorships and advertising, and how Abacus's marketing team funnels all of its activity to a lead intake team, whose job is to screen all the firm's prospects to determine who is qualified and who should be referred out instead.

We also talk in-depth about how Mary Beth developed avatars for the firm's marketing, formerly defined marketing personas like builders, protectors, and changemakers that the firm uses to more clearly determine where they should be and not be targeting their marketing dollars, how the firm developed a brand style guide so all the advisors of the firm can communicate in a consistent manner when marketing, and why Mary Beth decided to remove the contact form from the Abacus website altogether and instead, just install an embedded scheduling app to let prospects instantly and immediately set up a time for an initial call with the firm.

And be certain to listen to the end, where Mary Beth shares her ideas about what any advisory firm regardless of size can do to better improve its marketing, given her own experience in both a very large advisory firm, and having previously worked as a solo practitioner. Why often the biggest improvement that advisory firms can make is simply removing the impediments they're unwittingly creating that may reduce their marketing effectiveness, and Mary Beth's philosophy that the long-term key to marketing is all about brand consistency, which means it's better to spend a small amount of marketing dollars in a very consistent manner for a long period of time than to spend a large amount of money in a very short period of time.

#FASuccess Ep 151: Expanding Your Advisory Firm’s Reach With A Retail Prosperity Pie Shoppe, with Luna Jaffe

November 19, 2019 07:04 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Welcome back to the 151st episode of Financial Advisor Success Podcast!

My guest on today's podcast is Luna Jaffe. Luna is the founder of Lunaria Financial, an advisory firm in Portland, Oregon that oversees nearly $55 million of assets under management for 100 client households.

What's unique about Luna, though, is that in an effort to solve the challenge of building an advisory practice that ends out with minimums too high to work with everyone, she launched the Sacred Money Studios & Prosperity Pie Shoppe, an actual pie shop across the street from her advisory firm office that offers low-cost financial education programs on budgeting and what Luna calls her Wild Money process.

In this episode, we talk in-depth about what Luna has learned in trying to expand the reach of financial education through a retail store. Why she ultimately decided to charge a standalone fee for each money class instead of an ongoing membership fee, the budgeting philosophy in the Wild Money process she teaches that she has found resonates with those seeking help with their finances, and the real-world challenges that come with opening up a retail store that has to manage retail employees.

We also talk about Luna's own advisory firm. Her unique year-long financial planning process that can run up to 18 meetings by incrementally helping clients implement changes step by step along the way, the exercises she uses from mind mapping to vision cards she created to having clients write a love letter to their money, how Luna integrates the eMoney Advisor portal into her somewhat non-traditional process, why the firm uses the You Need a Budget, YNAB tool to help clients actually change their spending behaviors and the flat fee structure that Luna adopted to ensure she is properly compensated for her time-intensive planning process.

And be certain to listen to the end, where Luna shares why despite the retail challenges, she hopes to ultimately take on investors and expand the reach of Sacred Money Studios, the additional challenge she faced when she decided to break away from Edward Jones to start her own independent firm, and why her biggest tip to other advisors is the importance of finding a mentor, not just one who will listen to you, but one who will pull you forward into what you can really become.

Weekend Reading for Financial Planners (Nov 16-17)

November 15, 2019 02:59 pm 3 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "weekend reading for financial planners" – this week's edition kicks off with the industry announcement that independent broker-dealer network Advisor Group is acquiring fellow IBD network Ladenburg Thalmann, which will create the 2nd largest independent broker-dealer (behind only LPL), with more than 11,500 advisors overseeing $450B in assets across 9 broker-dealer subsidiaries.

From there, we have several practice management articles this week, including a look at the ever-growing breadth of CFP programs for undergraduates (providing students more choices for their CFP education, but arguably making it harder for advisory firms that are hiring to figure out which are the 'best' programs with the best-prepared students), the emerging trend of large advisory firms hiring CTOs (Chief Technology Officers), the new business role of a "Chief Of Staff" that can be used to leverage the efficiency of a founder/CEO (and/or to groom talent for future leadership positions), and an idea on how to better unleash the creativity of your own employees.

We also have several marketing-related articles, from exploring the 'right' way to diversify your marketing (not by diversifying the types of clients you're trying to reach, but instead by diversifying the marketing channels you use to reach a narrower set of target clientele), to tips on figuring out if your niche just isn't working for you yet or if you've picked the wrong niche altogether, the benefits (or not) of hiring a publicist to help an advisory firm with PR (depending on the natural proclivities of the owner towards social media and blogging), and how to build your confidence in your own blogging writing or video abilities to get over the "Imposter Syndrome" of thinking you don't have enough expertise to be valuable (when in fact you do!).

We wrap up with three interesting articles, all around the theme of managing our time: the first looks at how the decade of the 2010s has become the decade we 'lost' control of our time (with the rise of the smartphone and becoming ever-reachable by anyone, anywhere); the second delves into why we seem to have such trouble protecting our time in the modern era; and the last provides some valuable tips on how to get better control of your time by saying "No" more often, and how to change your mindset to get more comfortable with saying "no" more often in the first place!

Enjoy the 'light' reading!

#FASuccess Ep 148: Building A Small-Town LGBTQ Niche While Coming Out To Your Broker-Dealer, With Laura LaTourette

October 29, 2019 07:03 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Welcome back to the 148th episode of Financial Advisor Success Podcast!

My guest on today's podcast is Laura LaTourette. Laura is the founder of Family Wealth Management Group, a hybrid advisory firm in Dahlonega, Georgia that oversees $45 million of assets under management for 86 client households.

What's unique about Laura, though, is the way she's built her advisory firm to work primarily with the LGBTQ community in her rural Georgia town while navigating her own challenges of figuring out when and how to come out of the closet to her own broker-dealer.

In this episode, we talk in-depth about Laura's financial planning process. The series of four financial planning meetings she goes through with every client that includes a unique draft plan meeting, where she presents a tentative series of recommendations to clients not for their implementation, but simply for their feedback, how Laura sets her minimum of financial planning fee that's separate from what she's subsequently paid to help clients implement, and how in recent years, she's begun to refine everything from her website to her data gathering form to better speak to her core LGBTQ niche clientele.

We also talk about Laura's own journey through the financial services industry and building her firm. The way she started out trying to build a multi-advisor agency with centralized support but ultimately found it just wasn't profitable to do so, the path she took to shift away from the multi-advisor model after 10 years to operate a solo advisory firm that she's enjoyed far more, how a desire to build a succession plan is leading her once again to start building towards a multi-advisor ensemble practice, and why she recently decided to hire a new CEO to support her solo advisory firm, who specifically does not have client relationship or business development obligations.

And be certain to listen to the end, where Laura shares her perspective on why it's so important to be authentic to who you are when you're working with clients to build trust, what she's done to find support for herself through the challenging ups and downs of being a lesbian advisor in both a town and an industry that are still not very accepting of the LGBTQ community, and why she joined the Women in Financial Services organization and is now launching her own Rainbow Network to support LGBTQ advisors.

So whether you're interested in hearing about Laura's challenges (and successes) as a part of the LGBTQ community in a small town in northern Georgia, how she structures her entire financial planning process, or how she's developing a network for other LGBTQ financial advisors, then we hope you enjoy this episode of the Financial Advisor Success podast.

Scaling The Efficiency Of Comprehensive Financial Planning By Creating Repeatable Expertise

October 21, 2019 07:48 am 3 Comments CATEGORY: Practice Management

Social Image Scaling The Efficiency Of Comprehensive Financial Planning

In the early days of being a “financial advisor” at a broker-dealer or insurance company, having ’expertise’ meant being well-trained on the company’s products and their features and benefits. ‘Training’ at large financial services firms was primarily focused on product training (and perhaps training in how to sell those products), with the benefit that when the scope of required knowledge is fairly understood – just the features of a handful of the company’s most popular best-selling products – it takes relatively little time to train in the first place. In other words, training up an advisor’s expertise was rather simple and speedy, because the advisor just had to master the inner workings of a few select products.

In the modern era, though, as financial advice is increasingly comprehensive and holistic, the breadth of what it takes to have ‘expertise’ goes far beyond what was required in the product-centric world of 20 years ago. Yet unfortunately, the reality is that the minimum bar to become a “financial advisor” – generally, a Series 6 and 63, 7 and 66, or a Series 65 exam – is largely unchanged through this shift, built around 3 hours of regulatory exams that most can study for and pass in just a few weeks. The end result is that ‘advisors’ are licensed to provide comprehensive financial advice, with no actual requirement to have any training, education, or experience, in personal finance or advice itself.

On the one hand, a voluntary desire to improve financial planning expertise has led to rapid growth of CFP certification in recent years, with more than 5,000 CFP candidates completing the exam process in 2018, up from approximately 3,000 in 2013. Still, though, the total penetration of CFP certification is still less than 86,000 out of approximately 311,000 financial advisors (or barely more than 25%). Which makes it incredibly difficult to deliver financial planning advice efficiently… when the advisor has to research any and every question the client asks, because they lack the depth of expertise to actually know those answers offhand in the first place.

In fact, recent Kitces research on “How Financial Advisors Actually Do Financial Planning” finds an emerging “Experience-Expertise” gap, where having CFP certification reduces the time it takes to complete the first-year financial planning process by 22%, and that amongst the most experienced advisors, having CFP certification reduces the time of the financial planning process by a whopping 44%. As the more experienced the financial advisor, the more confident they tend to be, and the more affluent and complex clientele they tend to attract… which means advisors with more experience actually end out spending even more time to get through the financial planning process (despite the availability of technology, and their years or decades of experience doing it!).

Similarly, more experienced financial advisors also tend to increasingly struggle with the time efficiency of financial planning, because an increasingly complex range of clientele means an ever-widening range of complex situations that the advisor must provide advice on. Notably, though, the real challenge isn’t that more experienced advisors tend to have more sophisticated clientele with more complex needs, but that their needs are differently complex. Which means formulating a niche or more specialized expertise for a particular target clientele can not only be effective for marketing purposes, but also becomes a substantial efficiency improvement, as once the advisor researches and ’learns’ how to handle a particular complex situation, it becomes repeatable expertise for the future as well.

In addition, crafting a more repeatable financial planning process also makes it possible to improve the efficiency of financial planning by leveraging paraplanners who can do not only a portion of the back-office work in financial planning preparation, but even limited-scope portions of the financial planning meeting process as well. Such that, in practice, solo advisors who leverage a paraplanner are able to service an average of 64% more clients and generate 80% more take-home pay by better aligning the tasks being done to the skill and experience (and compensation) level of the team member.

The bottom line, though, is simply to recognize that the majority of the time spent in the financial planning process isn’t actually in the phases of Analyzing and Developing the financial planning recommendations themselves, but also in Establishing the relationship, Gathering data, Presenting the plan, Implementing it, and the ongoing Monitoring process (and the never-ending stream of financial planning questions that crop up from clients along the way). Most of which are human-to-human interactions and communication (either in-person, by video, or via email)… which means the key to improving their efficiency is not necessarily investing in the technology to better automate those processes, but instead investing into the human capital of advisors themselves with deeper and more focused expertise, and a wider range of skill levels to which various financial planning tasks throughout the process can be appropriately (and cost-effectively) matched.

The 20 Best Conferences For Financial Advisors To Choose From In 2020

October 14, 2019 07:46 am 10 Comments CATEGORY: Conferences

It was Benjamin Franklin who once famously quipped “An investment in knowledge pays the best interest”. The caveat, however, is that like any investment, it’s still important to do your due diligence in researching whether any particular allocation of dollars will be a good investment. And with the proliferation of financial advisor conferences in recent years, it has become more and more difficult to figure out which events are most likely to actually provide a good “Return On Investment” (ROI) in fruitful knowledge that advances your success as an advisor. Even if it often takes just one good takeaway from a conference that can be implemented to make the whole trip worthwhile.

The matter is further complicated by the fact that advisory firms themselves are evolving in an ever-wider range of directions, with small, mid-sized, and large firms, independents versus employee advisors, RIAs versus broker-dealers, and an ever-growing range of niche specializations… which means an objectively ‘good’ conference may be the absolute ‘best’ conference for one advisory firm (or one advisor within a firm)… yet be totally irrelevant for another.

As someone that has been speaking at nearly 70 conferences a year for almost a decade myself, I’ve seen the good and bad of our various industry events, which are spread across membership associations, broker-dealers, insurance companies, RIA custodians, product manufacturers, trade publications, private events, and more. And as a result, I am often asked for my own suggestions of what, really, are the industry’s ‘best’ conferences to attend.

Accordingly, back in 2012, I started to craft my own annual list of ’best-in-class’ top conferences for financial advisors in various categories (to allow advisors to match the available conference specialties to their own needs), and have updated it every year since, in what has become one of our most popular annual articles.

And so now, I’m excited to present my newest list of “Top Financial Advisor Conferences” for the upcoming 2020 year, broken into 5 broad categories: Go Home (to your broker-dealer, RIA custodian, or network conference); Go Local (to network at your membership association's local chapter meetings); Go Scale (whether it’s making your big advisory firm bigger, or your lifestyle practice more efficient); Go Specialize (in the various industry niche conferences for those cultivating deep subject matter expertise); or Go Broad (to one of the major regional or national association conferences).

In addition, we've also launched a new "Master Conference List" of all financial advisor conferences in 2020, for both advisors looking for a wider range of events to attend, and vendors looking for more conferences to exhibit at!

So I hope you find this year’s 2020 conferences list (and our new Master Conference List) to be helpful as a guide in planning your own conference budget and schedule for next year, and be certain to take advantage of the special discount codes that several conferences have offered to all of you as Nerd’s Eye View readers!

#FASuccess Ep 145: Systematizing Reviews Of Client Tax Returns By Building Software To Automate Them, with Roger Pine

October 8, 2019 07:07 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Welcome back to the 145th episode of Financial Advisor Success Podcast!

My guest on today's podcast is Roger Pine. Roger is the co-founder of Holistiplan, a new kind of tax planning software for advisors built to systematize and automate the process of reviewing a client's tax return to find the potential planning opportunities.

What's unique about Roger, though, is that he previously spent 10 years as a financial advisor in an independent advisory firm where he taught himself computer programming on the side implementing custom technology improvements for his own firm, before deciding to shift into becoming a full-time FinTech entrepreneur himself.

In this episode, we talk in-depth about the Holistiplan software that Roger developed. From leveraging optical character recognition to scan all the relevant information from an entire tax return PDF in just seconds, to converting that information into relevant tax observations about the client's tax bracket, phased-out deductions or tax credits, and the eligibility for tax preference contributions to retirement accounts, to the forward-looking tax planning tools that Holistiplan is now building to identify the client's true marginal tax bracket, taking into account all the phase-ins and phase-outs to make better forward-looking tax recommendations.

We also talk about the ever-blurring line between where a CPA's tax services end and a financial advisor's begin, the dynamics of trying to balance providing tax guidance and not unwittingly competing against potential CPA referral sources, and why Roger views Holistiplan's tax analyses as only the beginning of developing a comprehensive expert system that helps financial advisors craft more consistent recommendations across the full spectrum of the financial planning body of knowledge.

And be certain to listen to the end, where Roger shares his own journey and what it's like to transition from being a financial advisor to an advisor tech entrepreneur. Why he ultimately decided to take the leap despite being on a partnership and succession track in his current advisory firm, and his suggestions on what other advisors can do if they too see an opportunity to develop advisor technology solutions to fill the gaps in today's marketplace.

So whether you're interested in learning about the process behind taking an idea for an application and actually bringing it to market, lessons Roger learned when transitioning out of the advisory business and launching a startup, or about his goal to advance the financial planning profession by helping develop "normative practices", then we hope you enjoy this episode of the Financial Advisor Success podcast.

#FASuccess Ep 144: The Past, Present, And Future Evolution Of The RIA Custody Model, with Tom Bradley Jr.

October 1, 2019 07:05 am 3 Comments CATEGORY: Financial Advisor Success Podcast

Welcome back to the 144th episode of Financial Advisor Success Podcast!

My guest on today's podcast is Tom Bradley. Tom is the former president of TD Ameritrade Institutional, one of the leading RIA custodial platforms serving nearly 7,000 independent RIAs with almost $600 billion of assets held in custody.

What's unique about Tom, though, is that he led the original Waterhouse Advisor Services platform when it was first started back in 1992, and has been a part of the growth and evolution of financial advisors operating as independent RIAs on the custodial platform for more than 25 years.

In this episode, we talk in depth about the evolution of the RIA custody model itself. From the early days when advisors had no direct means to actually trade across multiple client accounts and had to manually enter transactions off paper trade confirmations into their portfolio performance reporting systems, to the development of the first wave of RIA custodial tech integrations when few advisors had more than $20 million of AUM and couldn't demand much of their providers, to TD Ameritrade's unique pivot into an open architecture system with its Veo Open Access platform, because their acquisition by Ameritrade in 2006 gave them a unique opportunity to leverage the first wave of APIs that other RIA custodians hadn't fully developed yet.

We also talk about the nature of the RIA custodial business itself. The not always apparent ways that RIA custodians generate their revenue from advisors and their clients, why the RIA custodial options for how cash is invested has become such a hot-button issue, what it really costs an RIA custodian to service an advisor on average and what clients actually pay as a percentage of their assets, and what it would take to develop an RIA custodial platform that itself operated on a truly fee-only basis.

And be certain to listen to the end, where Tom shares his perspective on the future of the RIA custodial business. The gaps he still sees in how advisory firms manage succession plans and the transition of clients after a founder passes away, and why in the end, the fact that RIA custodians may also compete with their RIAs for end investors in their retail brokerage businesses can still be a net benefit to most advisors because it brings down the cost of the custodial platform in the first place.