Win Over Millennial Clients: The $30T Opportunity

winoverlAre you ready for the $30 trillion wealth transfer? This great wealth shift from Boomers to their heirs has officially begun and will continue over the next few decades—is your business prepared? As an advisory firm, these are your future clients, so you better get on their radar stat.

Young people have unplugged the landline, and they are always online. They use social media to get their daily news and communicate with those closest to them instantaneously. They check their emails less often, are slower to reply, and answer phone calls on the run. They are the mobile generation.

The problem with this? 90%1 of millennials will leave their parents’ advisor. And over 60%2 of advisory firms do not have a plan in place to court these millennials; this includes not having a social strategy. Cerulli Associates reported that while 43% of RIAs do use social media at least weekly, 37% still do not use social media outlets at all. Can you relate? If yes, then keep your ears to the ground. You need to be where your clients are, and with the advent of social media and other attractive technologies, where they are has changed significantly.

As I laid out in Part 1 of this blog series, “Unlikely Friendship: Social Media and Compliance,” to get started using social networks, you first must comply with federal requirements and regulations. They are there to safeguard you and limit any potential risk associated with using social media.

Once you’ve conquered those, it’s time to make a splash on social networks, where your audience lives day in and day out. Step 1—get on LinkedIn. Half of LinkedIn users are 25-40 years old so you should be effectively using this channel.3 You can make a great first impression by getting your profile in tip-top shape, and then begin to connect with your audience.

To do this, I’ve created a quick and easy checklist to keep in mind. I call this the 5 Social Be’s:

-       Be Relatable – Are you “listening” to what your audience is talking about and posting and/or conversing in a professional and beneficial manner?
-       Be Relevant – Are you up with the latest trends of the financial industry?
-       Be Reliable – Your future clients want to know you can be trusted. Are you offering sound information?
-       Be Proactive – Don’t wait for them to come to you. Are you a member of relevant groups? Do you participate when advantageous to you and your audience?
-       Be Timely – Are you reaching out to your target audience at the right time? Test various messages and language, measure the results you receive, and repeat both steps if necessary to nail down optimal timing.

Millennials are the most educated, confident, globally-mobile, and technologically aware investors. Don’t be discouraged by this tech-savvy generation—these future clients are not unattainable. Connecting with them on social networks can help you find new business, close more deals, and drive customer loyalty.

Not to mention, advisors with higher the numbers of younger clients have a better shot at long-term growth. PriceMetrix reported that the fastest growing books of advisors contain 30% younger clients (under age 45) as opposed to the slowest growing books containing 7% younger clients. In books with a higher number of younger clients, return on assets was found to be 25% higher. So, which book do you want? Keep your business thriving by preparing for the ‘Great Transfer’ before it’s too late.

Looking for more? Social media and compliance experts Joanna Belbey and Phil Gerbsyshak of Actiance will give you additional tips and tricks on attracting the next generation via social networks. View the webinar.

Check back in three weeks for Part 3 of this blog series on how to attract and retain top talent via social media to drive growth for your advisory firm.

1 2014Wells Fargo Millennial Study
2 Win Over Millennial Clients Webinar
3“Millennials Are Changing the Rules of Investing,” Yahoo

Miguel Rodriguez leads Advent’s social media program. In his role, Miguel is responsible for Advent’s social presence including TwitterFacebookLinkedInYouTube, and Advent’s blogFollow Miguel on Twitter.

Posted in Advent Software, Advisors, Social Media, Trends

Data Trends: Unlocking the Value of Automation

unlockWhat does data management look like at your firm? Are you relying on piecemeal legacy systems? Do you solve data glitches using tactical patches or manual interventions? If so, you are not alone.

Conversation surrounding data and data management is taking center stage due to the premium placed on accurate and timely reporting, the importance of high quality trading decisions, and effective resource management. Firms are looking for data solutions, with the built-in capability to scale for future market demands, while enabling them to become more operationally efficient and compliant at minimal cost.

Considering data as both a strategic priority and a business enabler, I decided to sit down with Advent’s go-to expert and global business strategist on all things data, Michael Lobosco, Director, Advent Direct Data Services. With more than 13 years of experience helping firms solve their data challenges, he’s the perfect person to help me bring you a three-part series on data trends and needs within the asset management industry.

Kendall: What are some trends and initiatives you see emerging in the financial industry surrounding data and data management?

Michael: There is definitely a trend around firms wanting to leverage centralized services for both data collection and distribution. It’s becoming more and more evident that investment firms across the industry are engaging in the same labor intensive activities for data management and each are doing so at an increasingly high cost. And it’s clear the overall industry is beginning to frame data trends in this way—that is, speaking about the opportunities for new levels of collaboration, efficiency, and client service through shared services. CEB TowerGroup’s presentation on the Top 10 tech initiatives for asset managers this year solidified my thoughts on this as a major forward-looking trend in the industry.


Kendall: So how do you think these trends will manifest themselves?

Michael: As firms are recognizing the imperative to have a comprehensive data strategy as well as the costs and risks associated with their current processes, there is an opportunity to pull resources together. So I think it will come out in the formation of collective data utilities, which will help to manage costs and risks associated with data management. Firms will choose to adopt certain utilities based on the legitimacy, capabilities, and security of third party providers. As firms develop and strengthen their data strategies, I think it’s inevitable that some sort of vetting process will also emerge for choosing which utilities to leverage.


Kendall: Are there any other trends you see emerging?

Michael: There are definitely key trends surrounding data’s role in regulatory compliance. Data is the backbone of proper compliance and helps ensure that firms meet their requirements. With each new regulation comes new data challenges and costs which is another reason firms are looking to leverage centralized data services – why should a firm incur the costs and risk of custom or in-house solutions when everybody is trying to solve the same problem?

Another is changes to the trading and settlement lifecycle. I could see something emerge around these processes as both are continually evolving and can be costly and labor intensive to manage. In an effort to be more efficient and ultimately drive profitability, firms will look for platforms and systems that can scale and evolve based on market requirements.


Kendall: Why has data management risen to the top of financial institutions’ agendas? And why do you think FinTech companies have begun investing heavily in developing data management systems? 

Michael: As I briefly mentioned, we are seeing a lot of firms’ having either costly and high risk custom solutions or no formal strategy whatsoever. I think this stems from firms either underestimating the effort involved in implementing cohesive data strategy or simply not knowing how to even begin developing a strategy, given all the complexities. That said, I think firms are now really starting to feel and recognize the challenges of both these scenarios given increasing investor demands, the intense regulatory environment, and the need for firms to differentiate themselves based on services. These factors are driving firm executives to sponsor a formal data strategy as a critical component to their firms overall business plans for long-term growth and sustainability.

Also, let’s not forget that compliance is a major driving force behind the increase in data investments. Complying with regulations requires firms to have access to a variety of reliable datasets. Inaccurate or incomplete data can lead to compliance failures and heavy fines.

It’s also worth mentioning that data automation eliminates manual work and human error. Firms can spend less time sifting through and searching for data, and spend more time putting it to use in delivering a high quality client experience and driving better trading opportunities.


Kendall: So do you think firms are beginning to see data as an opportunity, rather than an issue or problem to solve?

Michael: Exactly, all of the data problems can be seen as an opportunity to make better investment decisions, improve client satisfaction, and ultimately increase the profitability and long-term health of the company.


Kendall: My last question is around the benefits clients see from investing in a data management system – what’s the ROI?

Michael: There are so many clear benefits to having formal data strategy and leveraging centralized services. By automating data, clients will see cost efficiencies, scalability without increasing resources, and more time to focus on client-facing activities. Data automation helps firms stay compliant by cleansing datasets and providing error-free data for reporting and auditing purposes.

A great example of this is one of our clients whose firm was experiencing data lags due to unconsolidated, unorganized spreadsheets and lack of automation. The firm found inconsistencies in its data pulled from multiple sources, such as external data sets and other silo-ed systems. By using a centralized data service, which provided a single source for their data needs, including both market and portfolio data, they realized cost and time-saving benefits. This client also found implementation and maintenance of a single data source to be far simpler, allowing for faster and easier access to more accurate data. The firm has executed more informed trading decisions, and realized effective risk management, streamlined workflows, and stronger client relationships.

To learn more about the importance of data automation, the benefits of automated data services, and features to look for in a data management platform, check out Data Services: How to keep the lifeblood flowing.

Check back right here in two weeks for the second part of my discussion with Michael on data regulatory requirements.

Kendall has leveraged her passion for writing along with her background working with enterprise cloud technologies to strengthen Advent’s external communications.

Posted in Advent Software, Asset Managers, Trends

Unlikely Friendship: Social Media and Compliance

FriendshipPart 1 of 3 in our Social Media series.

Social media. The right policy coupled with the right technology can bring significant success to your firm. By knowing the ins and outs of social media, potential risks, and best practices, in congruence with regulatory requirements, you can realize significant growth for your business, particularly in that coveted millennial demographic.

I understand the hesitation and fears around taking your firm social, particularly while navigating the increasing regulatory environment of the financial industry.  So let’s look at the challenges that could face your firm as a social business, how to overcome them, and how you can realize the value of going social.

First and foremost, you should strengthen your corporate governance by defining your own policies. Make sure that both firm policies and regulations set by FINRA, the SEC, and the FFIEC are known and practiced company-wide.

Tasked with protecting the public, investors, and financial institutions, the SEC, FFIEC, and FINRA have each outlined regulations and notices pertaining to social media and compliance. As FINRA contains the most detailed of the three, we have highlighted the five essential areas of note for firms looking to develop their social media strategies.

  1. Record-keeping: If you type it out, it’s “written”
  • You are already required to capture and archive all business communications from day-to-day operations of your firm. The same applies for social media. All communications must be recorded and we’re talking everything, no exceptions: tweets, Facebook posts, LinkedIn updates, InMail, Direct Messages, third party content, advertising—even those on employee’s personal devices.
  1. Testimonials: Avoid Endorsements
  • Testimonials are prohibited for investment advisors in the financial industry and must be qualified for Registered Representatives (RRs). These could include “Recommendations” and “Skills” on LinkedIn, “Retweets” on Twitter and “Likes” on Facebook.
  1. Suitability: “Know Your Customer”
  • On social media, it’s nearly impossible to know the investing criteria about all your followers, thus it is prohibited to offer recommendations or advice for investing.
  1. Advertising: Nothing is new for social media
  • When it comes to advertising, all existing advertising rules for traditional media apply to social media as well.
  1. Supervision: Review and Pre-approve
  • Be crystal clear on what your firm allows and does not allow on social media. Put policies in place to govern such rules.

Feeling a little overwhelmed? Not to worry! It’s important to be aware of the relevant regulations, but it’s actually quite simple to get started on social networks. So keep your eye on the prize and let us guide you along.

Social media channels can provide numerous opportunities for growth and success of your business. Merely “listening” on social media by paying attention to what your audience is talking about and posting, can bring in new prospects, leads, and even result in new deals. Leveraging social media enables you to reach new audiences all from the comfort of your desk.

Check back in two weeks for Part 2: how to attract the next generation of clients with social media. Later, I’ll also discuss how to build customer relationships and retain top talent via social networks.

To learn more about how to implement the five essential regulatory areas and realize these benefits, watch our Recorded Webinar: Social Media and Compliance featuring guest experts, Joanna Belbey and Phil Gerbyshak, of Actiance.

Miguel Rodriguez leads Advent’s social media program. In his role, Miguel is responsible for Advent’s social presence including Twitter, Facebook, LinkedIn, YouTube, and Advent’s blog. Follow Miguel on Twitter.

Posted in Advent Software, Advisors, Asset Managers, Compliance, Social Media, Trends

Have You Got What It Takes to Shine in Today’s Competitive World?

CompetitionIf you want a picture of the key trends affecting the asset management industry then PwC’s latest Annual Global CEO survey [1] is a good place to start. The report sets out a number of headline findings. But beneath all the figures and insights, for me two major, interrelated issues shine through.

1) Cost cutting

Cost pressures are piling up. Regulation is an obvious one, as the barrage of local, regional and national initiatives promises massive disruption and a huge, and growing, cost burden. At the same time, we’re seeing many asset managers’ fees being squeezed by the shift towards ETFs and passive funds, not to mention the escalating competitive threat from technology and new – increasingly non-financial – market entrants. No wonder almost half the asset management CEOs surveyed said they aim to cut costs this year, while over a quarter are looking to outsource.

2) Sourcing growth

How can you achieve sustainable and profitable growth? Regulation, demographics and changing customer behaviours are all creating openings. For example, PwC predicts a massive surge in global assets under management by 2020, fuelled in large part by emerging markets. It also points out how asset managers are exploiting bank deleveraging, and establishing customer JVs and supplier partnerships to move into new and profitable product, service and geographic areas.

The challenges may be intensifying, but I believe this is a really exciting time for those asset managers willing and able to seize the opportunities. Able is the key word here. Having the ability to change and grow requires the support of a technology infrastructure that can help you identify where the most promising prospects lie, while giving the all-important flexibility to experiment – to quickly move into different product and geographic markets, without being hobbled by massive upfront investment costs and operational overheads.

To my mind, technology should be an enabler of business growth and innovation, not the barrier that so many legacy platforms seem to be. With the right set up, your business really has a chance to shine.

[1] 18th Annual Global CEO Survey, PricewaterhouseCoopers

Mats Berggren joined Advent in 2001, and is now VP of Sales in EMEA, responsible for Advent’s continuous new business growth within Europe, the Middle East and Africa.

Posted in Advent Software, Asset Managers

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