Are You Willing to Pay and Manage More to be TRULY Independent?
The strive to be an independent financial advisory firm comes riddled with ironies in the wealth management industry.
I question what “independence” means when advisory firms are required to use their institution’s technology to enter tasks assigned the institution’s staff, have documents e-signed, or respond to alerts and notices. And how much labor (money) is spent tracking the progress of tasks you have assigned to that institution in their software?
We understand completely why Broker Dealers, custodians, and outsourcers are requiring firms to use their own technology – it is about compliance. It is also about profitability and reducing labor costs. The more you use the institution’s systems, the less work their staff has to do AND less need for their managers to oversee their work. Less work equates to less labor cost.
So what if an advisory firm was offered two choices regarding technology:
Choice 1: Pay for your own software and pay the institution more money. The extra fees will pay the institution’s compliance team to review documents and service team to manually enter requests into their technology to then process.
Choice 2: Use the institution’s technology and pay them less for servicing and reduce your expenses.
Choice 1: Pay more to the institution to use their staff while having less control over the pace of progress and quality of servicing.
Choice 2: Pay less to the institution and more to your own staff to enter tasks and service the clients. You will have more control over the pace of progress and quality of servicing. You will also spend more time managing staff and less time on business development.
If you still can’t choose, pretend you are a client of your firm and choose:
Choice 1: Pay more for financial planning because your advisory firm has to manually collect and enter data into the financial planning tool
Choice 2: Pay less for financial planning and self-enter bank account credentials or values, mortgage balance, credit card balance, etc into your planning or data collection software
Choice 1: Pay more for the advisor to email or mail the investment report and communications
Choice 2: Pay less and view investment performance reports and messages in the advisor’s online portal
How do ya like them apples?
As you consider your own passion for being TRULY independent, you might want to consider what level of independence you want. And what is the impact of this decision on your business?
If this is too much for you to think about, please feel free to distract yourself with a short clip from Good Will Hunting’s “how do ya like them apples” and forget about this mind numbing blog post on determining you and your client’s independence.
Seeking operational excellence? Drop us a line by connecting HERE
Most Read IRIS Articles of the Week: April 24-28
Here’s a look at the Top 11 Most Viewed Articles of the Week on IRIS.xyz, April 24-28, 2017
Click the headline to read the full article. Enjoy!
Robo advisors can complement—not threaten—any bank’s business model and improve customer engagement. Regardless of age, income, or gender, 75% of bank customers surveyed by KPMG said they would be likely or somewhat likely to consider a robo advice service from their bank. — Greg Vigrass
I’ve had some extremely interesting conversations the last few days. We’ve been discussing sales, sales management, leadership, motivation etc. I am very fortunate to have the opportunity to meet with these inspiring business leaders. One question keeps coming up: Why do you love sales so much? — Tove Zilliacus
We all know the drill: the Fed raises interest rates, and the bond market falls. That’s an important equation to consider now that the decade-long era of historically low interest rates is slowly but surely coming to an end. — Salvatore Bruno
A quiet revolution is taking place in the alternatives world. The idea of alpha/beta separation has finally made its way from traditional to alternative investing. This development brings with it a more transparent, liquid and cost-effective approach to accessing the “alternative beta” component of hedge fund return and a new means for benchmarking hedge fund managers. — Yazann Romahi
I’ve had financial advisors for more than 40 years. Not once in those years have I called my advisor to find out what stock/funds I should buy or sell. But I have called to find out where I should get my first mortgage, when to sell my house, or how much income I could get in retirement. — Paulette Filion and Judy Paradi
Many financial advisory firms want the silver bullet solution to outsourcing investment management so the focus can be on client interactions and business development. However the jargon in this outsourced space has become very confusing so here is a brief summary of our understanding. — Jennifer Goldman
You probably aren’t aware of this, but it’s true: financial planners are heroes. Yep, it's the truth. And when you think of the America's top killer, you might think about smoking, cancer or obesity. Or maybe even a serial killer. — Ronald Sier
How to effectively stay on your clients’ minds (for all the right reasons), even though they may not see you for months. — Paul Kingsman
Do Less Better practitioners are fanatical about focus and de-complexity; herein lies the secret of their success. Yet, do less better isn’t something most leaders embrace. The seemingly more attractive (and logical) option is to do more and more — John Bell
Often advisors ask us, “How should I get started in marketing?” It’s a fair question. They just want to make sure they’re putting their time and resources in the right place. — Jud Mackrill
Serious carnivores will go to the ends of the earth to seek out a perfectly marbled, expertly seared steak. And so, it seems, will we. We've visited the best butchers in France, reacquainted ourselves with the idea that everything (steaks included) is bigger in Texas, eaten at celebrated parrillas of Argentina, and enjoyed the elegant ambiance of metropolitan steakhouses. — Andrew Harper
- 1 of 1148