Tag Archives: Bob Veres

Around the Web with RIA Ideas

A few great reads from the month of February, highlighting some of the key conversations we’re having with advisors. Growth, technology, investment design, outsourcing, recruiting, compliance…all are key discussion points for RIA firms and we share the following for your own discussions:

Before hunting for new clients in the name of “growth”, advisory firms would do well to consider who they want to serve and how they plan to serve them. A Vince Lombardi-inspired read from Julie Littlechild on remembering the basic fundamentals of winning.

We desperately want to do it all and be a hero to our clients, colleagues, and family. Greg Menefee reminds us that we CANNOT effectively be everything to everyone, and empowering others really empowers ourselves to leverage our strengths where it really matters.

Finding prospective clients can be hard, and finding the right clients who appreciate the uniqueness of your offering can be even harder. Why not build and feed a virtual platform that is uniquely you, and tells a compelling story differentiating you from your competitors? Michael Kitces applies lessons from a best-selling book for a master class in narrowcasting.

This narrowcasting platform can also serve as the beginning of earning trust and loyalty. As Josh Brown writes, this key piece of the relationship is not an event but an ongoing process of earning investor loyalty requiring consistent, clear communication.

Diversification is said to be the only free lunch in finance, but 2015 left just about every investor starved for returns. Great set of graphics here from Resolve Asset Management shows how even perfect foresight led to pretty lame outcomes.

The TDA National LINC Conference was great, and focused heavily on growth and the integration of open-architecture technology into an advisor’s practice. A few perspectives from Adhesion and beyond.

A good advisor should hire themselves for planning and investment management, right? Seems obvious, but Bob Veres points out a few reasons why engaging an outside professional may be a better solution.

The upcoming DOL legislation is the great unknown for the financial services space, with “suitability” and “commissions” being replaced by “fiduciary” and “fees”. Michael Kitces chronicles the history of the broker-dealer model, and how firms would be wise to adopt a business model built upon the delivery of objective advice.

Innovation is great until it isn’t. The proliferation of novel ETF ideas has created the illusion of improvement, but can lead to complex, illiquid, overlapping allocations where simple, liquid, clearly-defined solutions may serve investors better. 3D Asset Management writes here on the dangers of complex design.

Growth-oriented firms are constantly thinking about the right team for the future. Financial Advisor magazine reminds us that the process of hiring and managing people is not to be taken lightly.

At some point, all successful business owners wrestle with capacity issues that directly impact the client experience. As the business evolves, which areas are most ripe to be handed off? TD Ameritrade shares a very cool infographic on Maximizing Your Resources as an advisor.

We all know this, but it never hurts to be reminded that working with the right clients and right colleagues are common elements to building a successful investment firm. Ben Carlson shares some common sense wisdom from an old interview with Charlie Ellis.

Adhesion continues to work behind the scenes in helping advisors grow, with new options allowing the integration of Outsourced CIO implementation via Mercer and robo technology via Riskalyze. We welcome your feedback at solutions@adhesionwealth.com, and encourage you to subscribe on the upper right of this page to receive our regular blog updates.


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What Really Differentiates the Top Advisory Firms?

Like many of us, Bob Veres’ take on practice management was fairly basic. In his words, “Use your technology efficiently, break your routine tasks into repeatable processes and compensate for what you want the staff to accomplish.” However during a recent coaching session, he came to the realization that for top firms these are just the table stakes. Says Veres:

“One key insight for me was the importance of a systematic approach to talent: You can get more leverage and growth out of developing your staff into future leaders and partners than out of pretty much whatever else it is you’re doing now: marketing, doing planning chores or tending client relationships.The analogy is that you’ll get more fruit (read: revenue) if you grow an orchard instead of a few big individual trees.”

In an April 29th article in Financial Planning, Bob Veres discusses some of the insights he gained into practice management when attending the group coaching program of the Ensemble Practice.

Veres went on to share what he took from some of the sessions he attended. In one, consultant Bob Bunting explained that, since there are only a small number of people with the qualifications and motivation to be leaders, firms must hire opportunistically and quickly. This is especially true since the window where these prospects are available tends to be much smaller. Bunting also suggested that firms should facilitate key employee development by creating highly visible leadership tracks with the goal of moving talented people to partner as soon as possible. This can act as a motivator for the rest of the firm, and lets employees know what they need to do to move up without having to ask. Bunting also suggested that when a new initiative comes out, those who jump in early should be pointed out and praised. This shows employees who is and is not making things happen, and eventually help bring skeptics onboard.

Sam Allred, a director at Upstream Academy, explained that leadership can be simply defined as “creating better results.” A couple of common mistakes, Allred pointed out, are promoting people who spend most of their time in the office and creating a flat management structure that treats everyone the same. Instead, Allred said that people must be challenged in order to grow. He suggests that future leaders be encouraged to take on one project a year that’s beyond their current abilities. This forces them to acquire new knowledge, and work with other people who have the skills needed to complete the project.

As Veres puts it, he realized that what separates the future haves and have-nots is how they treat and nurture the prospective leaders in their midst. Ask yourself these questions that Veres poses at the end of the article:

“Are you willing to identify, engage and mentor extraordinary people? Are you willing to shift your role from doing to mentoring? And will you encourage evolutionary change, or resist it?”

Leading firms have discovered how to add more value to their clients by leveraging technology and people. Adhesion is taking those businesses to new levels. Check out this video for a quick overview.

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New Fee Structure Based on Adding Alpha

There’s a new revenue model taking shape in the financial planning business and, in the words of industry thought leader Bob Veres, we should probably be paying attention.  In Bob’s recent article in Financial Planning, “Advisors: New Fee Model Taking Over?”, he discusses recent developments in the way some younger advisors are structuring their fees.

Gen Y Changing the Game

To quote from the article: “Over the past few years, a number of Gen Y advisors have become dissatisfied with the idea that they should spend the first decade of their careers writing plans in the back office, safely away from all client contact.”  As Bob points out, the other option available to these advisors is starting their own firm.  However, out of necessity they generally end up working with clients their own age; clients whose assets fall below the standard million-plus minimum.  With fewer assets to manage, fees based around the traditional investment management model no longer make sense. These advisors are changing the game by charging fees based on the advice they are giving clients.  In other words, structuring fees around the Alpha they are providing.

Flexible Model

This “advice-for-fee” model that Bob is talking about is, as he points out, extremely flexible.  There are a number of “advice-based” financial issues that Gen Y-focused firms can address; for example, developing good saving habits, avoiding credit card debt, strategies for paying off student loans, business start-ups, and insurance issues arising from marriage and children just to name a few.  But as Bob reminds us, this model also works with retirement planning.  Bob relates the story of one Gen X advisor who schedules fun events like golf lessons for clients to “practice” for their retirement.  Regarding the managing of assets, he states: “If there are assets to manage, these can be delegated to the online firms that so many other planners disparage as ‘robo advisors,’ or outsourced to companies like Adhesion Wealth Advisor Solutions or Frontier Asset Management.”

Adding Alpha More Relevant Than Ever

We think this article makes clear two key points: back-office sprawl continues to be an issue, and more importantly that providing a remarkable client experience by adding Alpha is becoming more and more essential to attracting and retaining clients.  We’ll let Bob take us out: “If you want to leave your successors the kind of firm that they will want to manage, and if you want your practice to remain relevant 10 or 15 years down the road, then you should allow your younger planners to join the revolution, and experiment with delivering advice profitably to a whole new market of potential clients.”

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Handling RIA Burnout with Bob Veres

Bob does a great job of addressing the phenomenon of RIA Burnout, and offers lots of helpful tips and insights for addressing it.  For example, have you tried making a “To-Don’t” list of the things you don’t want to do that could be delegated?

Check out the replay below for Bob’s thoughts on advisor burnout and putting more joy back in the job!

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Advisor Burnout is Affecting More and More Advisors

Let’s talk about stress.

This is the most stressful week so far this year for many investment advisors. There are quarterly reports to reconcile, fees to bill and taxes to finalize. Sound familiar?

If you’ve been feeling more and more stressed and less and less joy then you may be suffering from Advisor Burnout.  Bob Veres, one of the foremost thought leaders in our industry and former editor-in-chief of Financial Planning magazine, has put together a groundbreaking white paper entitled Solving the Burnout Crisis.  Based on feedback from over 200 investment advisors, Bob not only identifies some causes and variations of Advisor Burnout, he also shares feedback from other advisors on ways to deal with stress and other root issues.  Click here to read the white paper.

Adhesion recently launched our inaugural stress survey to help give you even deeper insight into the sources and solutions for this problem. Please accept our gift of a $25 card after you complete this surveyClick here for the link to the survey.

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Technology is Important, but Relationships Remain the Key to RIA Success

Innovation is Trending

Check out this article in RIABiz, “The 6 biggest trends affecting the RIA business”, and the shout-out to Adhesion!  Specifically, take a look at the first trend: tech-innovation is back in wealth management.

Here’s a great quote from the article:

“Much of this innovation is largely a matter of hitting various points of price, service, outsourcing, mobility and integration…”

We definitely agree.

We have said repeatedly that the paradigm for how advisors do business is shifting.  The post-2008 environment has clients being more skeptical and discerning in how they choose an RIA, and coming up with new and substantive differentiators has taken on a whole new importance.  We at Adhesion have long recognized that staying one step ahead of the competition through innovation is essential; more importantly, we recognize that innovation should be focused on  allowing advisors to spend more time with clients.

Client Relationships Remain the Differentiator

With robo-advisors and other online alternatives coming on strong, this is no time to rest on one’s laurels.  Fundamentally, it’s a question of finding new and better ways of doing things and learning how new technology can facilitate client face-time and building client relationships.  This is the real differentiator in the post-2008 landscape, and something robo-advisors cannot do: the client relationship piece.  See this article in Financial Advisor:  “Improving Financial Advisor Effectiveness By Building Relationship Skills.”  Robo-advisors can compete on investment performance; it is in the client relationship that RIAs will continue to leave them in the dust.

Use Technology to Facilitate the Relationship Piece

Here’s another good article from Bob Veres featured in Advisor Perspectives: “Five Technology Trends that are Reshaping the Industry.”  After attending the T3 conference this year, Veres states:

“But what struck me in the midst of this technological wonderland was how slowly these remarkable innovations are being incorporated into actual business practices.”

Veres speaks of advisors’ need to get a big picture view of how to actually utilize these new technologies in their business practice.  For example, one of the trends Veres identifies is Alerts: notifying you or the client of a specific occurrence or lack thereof that requires action.  It’s this kind of feature that can help advisors see the “big picture” Veres refers to.  The Alert is a great way to know how and when to integrate some of these powerful technological tools into your practice. Again, we are looking for ways to build and strengthen client relationships through superior solutions. Ultimately, the goal should be utilizing new innovations and features to improve efficiency and performance in such a way that RIAs can spend more time on client-facing and business building activities.

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Outlook for 2014

What can we expect in 2014? A continuation of the amazingly unexpected returns we saw in 2013?  Will we hit a period of stagnation? Is there an unforeseen fiasco in the works reminiscent of 2008? Perhaps the only thing we know for sure is that advisors must be prepared to communicate to their clients the unexpected.

Providing Alpha in Client Relationships

During our recent webinar with Bob Veres “The ‘Other’ Alpha”, Bob explained that in 2014 advisors should be ready to “reset the expectations” and actively communicate with their clients.  We agree whole-heartedly with Bob that communication is an essential part of the service that advisors provide, and that it will be extremely important in 2014.  The client relationship is a key piece in providing Alpha to your clients.  You can bet that at some point in 2014 we will all be in for a rocky ride, and it is during times of unrest that client communication and Alpha truly shine. In 2014, expect the unexpected and be prepared to guide your clients through the tough times.

Delivering a First-Class Client Experience

However, what steps will advisors take in 2014 to ensure their ability and capacity to provide clients with a new level of communication and service?  In his new article “Ten Predictions for Advisors in 2014”, one of Bob’s predictions is the appearance of front-office-only advisory practices.  It simply doesn’t pay anymore for advisors to remain tangled up trying to manage increasingly complex back-offices.  Advisors have to put their priorities where clients expect them: in the front-office, delivering a first-rate client experience.  In doing so, advisors foster client loyalty and pave the way for better and more dynamic business development.  Furthermore, it doesn’t make logistical sense when there are incredibly powerful and efficient outsourcing options out there that augment advisor Alpha without detracting from any real or perceived value.  This aligns with one of our own predictions for 2014: that this will be the year of the client experience.

Don’t expect that your competition will be any less fierce in 2014. Robo-advisors and Big Brokerage are gunning for you.  Clients are being tempted with DIY solutions. The advisors who build exceptional businesses and increase their market share will be those who focus their time and resources into enhancing the experience of the clients who walk through their doors.  You can differentiate yourself from the competition by offering white glove service and a truly value-adding relationship.  This relationship piece is particularly important with the challenges facing clients like retirement income planning, healthcare concerns for themselves and their parents, and the myriad of additional issues that their trusted wealth manager should be working with them to overcome.  Through good communication and raising the bar on client experience, advisors can do more than ride out 2014:  you can prosper.


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