5 Ways Wealth Management Firms Can Power Their Growth by Rohit Mahna | As seen on fa-mag.com The financial services industry is facing a period of change like no other. Even the most successful firms are facing headwinds to their growth, with factors like uncertainty in the markets and an evolving geo-political landscape outside of their control. As a result, customers are expecting more from their advisor than ever before. So how can firms build better strategies to stand out from the competition and create organic growth outside of traditional referrals? It starts by recognizing that creating a durable business is a long-distance race, not a 100-meter dash. We’re living in a time where there’s no shortage of great options available to improve your business, but making the right selections in areas such as new technology can feel overwhelming. To get started powering growth for long-term success, here are five key areas wealth management firms should consider. Expand Your Customer HorizonsClient segments that were once thought of as “niche” are now core to wealth management firms’ growth strategy. Now is the time to strategically engage with growing client segments that increasingly control more U.S. wealth, such as: Solo investors: One in seven Americans lives alone, according to a Fidelity analysis of U.S. Census data. More young people are forgoing marriage and children, and many older people are living solo due to a divorce or death.  Soloists face unique challenges including lower retirement savings, higher expenses, and fewer employee benefits. With the number of soloists expected to rise, firms should consider anticipating how to tailor advice and life event planning to their distinctive needs. Women investors: Despite the growing share of wealth controlled by women, the Fidelity Investments 2022 Investor Insights Study revealed that women report less satisfaction with their financial advisors and less knowledge of their services than men. They also report having 24% fewer conversations and engagements with their advisors over the course of a year than men. Fewer interactions and other communication disparities are likely a contributing factor to women’s reduced advisor satisfaction and knowledge levels. As more Baby Boomer wealth shifts to women, it’s imperative that firms understand how well they are serving their existing clients – and identify opportunities to grow the number of women they serve. Next Gen investors: A great wealth transfer is underway. 57% of existing client assets will pass on to Millennial and Gen Z individuals by 20452, but Cerulli is predicting that more than 70% of heirs are likely to fire or change financial advisors after inheriting their parents’ wealth.3 These warnings also present an avenue for opportunity. This group is motivated to improve their financial situation, values professional advice – and is willing to pay for it. To get started, create an ideal profile of a young client, considering behaviors like savings habits. Next, make sure you are fulfilling the basics like reaching out to children of clients and provide services like financial education. Finally, evaluate your digital presence, as many young investors are seeking financial advice from online resources. Engage At ScaleIt’s no secret that our lives have rapidly shifted more to digital channels. As a result, more marketing must shift online to reach people in the context of their daily lives. So how can firms set themselves up for success to reach potential new business? This can be attained by creating and committing to a digital marketing strategy that can endure the rapidly evolving environment we live in today. A good place to start is to remember the “Marketing Rule of Seven.” The idea behind this maxim is that a prospect needs, on average, seven interactions with a brand before they’ll act. When drafting a marketing strategy, firms should think of channels or technologies that will scale them to help get them in front of clients again and again – as well as help personalize the approach for each prospect. Evolve Your OfferingRegardless of how you reach them, another key element to bringing in new clients is offering the products they seek. If a firm cannot provide the fresh solutions that will satisfy their expectations for performance, they may risk losing clients to someone who can, as research continues to show that one of the top reasons a client switches advisors is to gain access to new products and services. From alternative investments to direct indexing– the tools are available, and investors want access. Rising investor sophistication demands innovative solutions. The first step firms can take to stay ahead of the curve is to require education on evolving asset classes, even if their advisors aren’t bought in yet. The next step is to find ways to offer an intuitive experience to access the products through a single platform. If an advisor must go through multiple screens and programs, you have lost them. It’s essential to make sure everything works together seamlessly. Finally, a firm should evolve how their advisors approach portfolio conversations. In today’s environment, advisors will need to explain the portfolio and underlying investments in context of the client’s personal goals and preferences rather than using absolute or traditional benchmark relative returns. Optimize Your TalentWhile Cerulli predicts advisor headcount to remain flat through 20264, the larger issue is the 106,264 advisors expected to retire by 2031. As a result, there has been an industry-wide conversation about how to attract the best new talent. However, there should be an equal emphasis on how to retain current advisors and help them grow, as this can alleviate the pressures of managing employee turnover on top of the impending retirements. Although compensation is usually the number one factor for advisor satisfaction, there are a few others that play a crucial role in a decision to switch firms. These factors include firm culture, better opportunities to grow and work/life balance. For firms looking to improve in these areas, it will require them to think about the value they bring to their current staff and creating ways they can easily identify with the firm’s

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by Allison Brunwasser | As seen on ThinkAdvisor.com…   For many advisors, independence is just a bridge too far—but greater autonomy and control are often closer than they realize. “I want more freedom and control over my business, but I don’t want to be a business owner.” “I want more independence, but I don’t want to sacrifice the support and community I’m accustomed to.” “I would be happy if my firm just left me alone and allowed me to serve client’s needs. These are common refrains from many of the employee advisors we speak with. They want to have a sense of ownership over how they run their practice—including the ability to hire and fire team members, distinguish themselves from their colleagues by marketing their business creatively, and be allowed to run their practice without as much interference from compliance. Becoming an independent business owner may solve these challenges, leading many advisors to start their exploration process with that notion in mind. However, more often than not, advisors discover that going independent comes with a lot of work, from the initial setup to the ongoing management of the day-to-day minutia. Plus, they would be passing up on monetizing in the short term by eschewing a large transition package, in addition to the startup costs associated with setting up a business, leaving many advisors to conclude that independence is just a bridge too far. It’s at this juncture that these folks often get trapped by inertia—stuck by the belief that there isn’t a better option between the status quo and independence. The good news is that in a greatly evolved industry landscape, many advisors are finding that they can strike the right balance between the autonomy they seek and the scaffolding of a W-2 employee model. In fact, in our most recent Transition Report for Advisors, we determined that wirehouses, regionals, and boutiques have all added a meaningful number of talent to their firms because each offered what advisors desired to achieve their goals with greater control. And the truth is there are stark differences between the cultures, business models, and levels of advisor empowerment at various firms. It all depends on what an advisor is looking to solve for and how a new firm’s value proposition rises to meet an advisor’s specific needs. What does more control look like for an advisor at a wirehouse, regional, or boutique firm? The Wirehouse Perspective Let’s first look at the wirehouses and how they’ve evolved. While many think that moving from one wirehouse to another is more of a “lateral” move, there are still those who find the right level of independence within a large entity—especially with a big brand name behind them. Take Vincent Finney, Ryan Bibler, and Joseph Panfil, for example: Former UBS advisors managing $800mm in AUM, who were looking to achieve greater freedom and control, and decided to move from UBS to Wells Fargo’s W-2 Private Client Group. As they shared with us in a podcast episode, even as employees at UBS they looked at their business as business owners. The team never felt that being an employee of a firm stopped them from running their business in the way they wanted to. That is, each of the three partners has equal equity in the business they created and their own “roles and responsibilities” with equal say in their vision for the future. But things started to change at the firm. First, UBS left the Protocol for Broker Recruiting. This action signified the firm was taking more control away from the advisors and indicating that UBS owned their client relationships when in fact, the team built the practice based solely on their own hard work. And the team felt their vision was no longer congruent with the firm. While the advisors initially considered independent options thinking this was the only way to achieve their goals, they ultimately discovered that Wells Fargo supported their vision for additional autonomy while retaining the scaffolding and work/life balance they coveted. Wells offered them the ability to have a unique brand on their website, a custom-built space, and demonstrated through the recruitment process that management could remove obstacles more easily than they experienced at UBS. The Regional Firm Perspective Regional firms such as Raymond James & Associates, RBC Wealth Management, Ameriprise Financial, and Stifel have evolved their platforms, technology, and human capital to meet the needs of sophisticated wirehouse teams. With their emphasis on culture and treating the advisor as a client, they’ve become a popular destination for those disenfranchised within the larger brokerages yet not interested in independence. Consider “Jake,” a $300mm Merrill lifer, who loved his time at the wirehouse, but was getting frustrated by the bureaucracy of a large firm. He needed more administrative support, was pressured to cross-sell banking services, and was constantly blocked by compliance for routine tasks. So when Jake started his exploration process, he thought the only solution was to go independent. To him, all employee firms were the same. He really liked the creativity available in the independent space and the day-to-day control he would have as a CEO. However, he had a lot of unvested deferred compensation and had never monetized his business before. Jake landed on a “middle ground” option, choosing to go to RBC to monetize his life’s work and recoup some of his deferred compensation. Overall, RBC had a more entrepreneurial culture, offering an extra support team member and a simplified and consistent compensation plan that no longer emphasized banking. When he wanted to get something done for a client, management felt much more accessible within a flatter organizational structure. The Boutique Firm Perspective Lastly, there are boutique firms, a popular option for those looking to be employed by a firm with a bespoke brand and community of higher-producing advisors focused on the HNW segment. “Michael,” a $700mm bank advisor, dreamt about owning his own business—and even selected an office location and secured his brand name. Although Michael enjoyed growing his practice at his firm, his clients