Tag Archives: Client Relationships

RIA Succession Planning

“We are an industry of planners who have planned for everyone but ourselves and our own businesses” Ryan Zeeb

Succession-Simplified is a recently published piece that caught our eye. Written by the CEO of Camelot Portfolios, a strategist available via the Adhesion UMA platform, it provokes a number of thoughts that are relevant to advisors at any career phase.

The sad story that sparked this paper is a reminder of how much lies outside of our control, and how important it is to move in the direction of a more sustainable enterprise that can extend beyond its present identity. This movement benefits a) the clients and their heirs, b) the owners and their heirs, and c) the firm’s existing support team, by adding a level of stability in a world of uncertainty.

As a specialist serving the outsourcing needs of RIAs, we see often just how much of a firm’s identity can be tied directly to the “brand” of the founder.  In working with Adhesion to institutionalize firm operations, a critical step that is often included is a rebranding of the firm that can sustain after the founder decides to step away.  Together, these steps can help position the firm for smoother transition and greater enterprise value.

A few starting points to provoke action include the following:

  1. Start with simple – answer the essential questions before worrying about every detail
  2. Challenge your ego and identity- create repeatable processes to extend the firm’s reach beyond today
  3. Quit talking and start doing – think of the succession planning process as a video, not a snapshot

And of course, control. When to put a plan in place, how early to start the transition, who the successor(s) will be…these are among the rare outcomes that actually lie within the advisor’s control. To continue considering key ways to tackle the succession issue, enjoy the full discussion here…


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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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Front Office vs. Back Office: Key issue for the future of Financial Advisors at TDAI 2014

At the TDA Conference, awareness was raised among financial advisors that investment and asset management strategies are no longer differentiators.  Brent Brodeski, CEO of Savant Capital, stated during a panel session Thursday that financial advisors’ investment management does not drive growth.  Rather, RIA firms drive growth when their financial advisors “get clients, manage relationships, convey their wisdom to newbies and mentor the next generation of advisors. They can delegate and outsource everything else.”   Ron Carson, founder of Carson Wealth Management Group, told financial advisors: “Don’t sell yourself on performance.  If that’s what you’re leading with, it’s a losing game.”

Client Value is Transitioning

Our own Michael Stier, president and CEO of Adhesion, said in wealthmanagement.com that the value a financial advisor brings to the client is not in driving investment returns.  Instead, an advisor’s real value (or Alpha) is in doing things like being an emotional coach for clients; that is, guiding them through turbulent times in the market, as well as helping them manage savings plans and maintain tax awareness.  Michael also pointed out that while most advisors spend 50 percent of their time mired in the back-office high-end RIA practices typically spend 75 percent of their time on client-facing activities.

Does branding bring in more clients?

What we are learning as well is that most RIAs have simply not been successful in building their brand.  This is intricately tied to the front office vs. back-office paradigm.  Through close client relationships and creating a top-shelf client experience, RIAs build for themselves a dynamic brand identity that acts as a strong differentiator. Tweets coming from the TDA Conference show that less than 6% of RIA practices have a brand that is truly worth something.  Don’t get stuck in the back-office and let your brand suffer.  Focusing on the front-office and your clients sets your business apart from the competition in multiple ways; one of the most overlooked is the building of a strong brand that resonates and brings in new business on its own.

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2014: Increased Competition in the RIA Market

Client Expectations are Shifting for Financial Advisors and RIAs

In our last post, we mentioned that in 2014 your competition would be stiffer than ever.  Add to this changing dynamics in the way advisors are doing business and shifting client expectations, and it becomes clear that the successful financial advisors will be the ones who embrace the changing market and adapt to the times.

Michael Stier, Adhesion’s President and CEO, addresses this issue in a short interview with Financial Advisor IQ entitled “Can Advisors Thrive in this Changing Market?”  The answer is of course yes, but as Michael explains:

Thriving in today’s market means moving away from the financial advisor’s traditional role of simply providing investment services.

The paradigm has shifted due to a combination of two factors: increasing competition in the investment services realm, and shifting client expectations that their advisor will give them a high level of personal service within the context of a “trusted advisor” relationship.  As Michael points out in the video, online advisors (or robo-advisors) can give their clients investment tips and stock picks; what Alpha are you adding above and beyond what robo-advisors can do? Investment services are no longer a meaningful differentiator.  Advisors must set themselves apart through client experience and building relationships.

How do Financial Advisors and RIAs stay relevant?

Michael concludes by illustrating these points with a great metaphor.  For years, patients have been able to access medical advice over the internet, usually for free.  What keeps a doctor relevant to his patients? The relationship he has with them, and the personal experience he delivers when they come into his office.  The same goes for financial advisors.  To stay relevant, you must provide what the competition cannot: an advisor who understands his clients and what’s driving them.  Someone who knows what his clients’ long-term financial goals are, and will be there with them every step of the way until they are reached.

Click here for the full interview.

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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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