Advisors: Market Turbulence Calls for Seatbelts and Clear Communication

AdvMarketCrashWell, the ride was smooth and fun until Monday. Following 7 years of one of the longest bull markets on record, we got a taste of what life was like back in 2008-2009.

Monday, the market zigged, zagged, and collapsed, dropping over 1,000 points in the morning session to recover quickly to only 200 down, and then ultimately sink 647 points on the day, in addition to the pounding it took last week. The wild ride continued Tuesday morning as the Dow made big gains.

Based on global uncertainties in China, Greece, and a looming interest rate hike by the Fed, stocks’ day of reckoning has been a long time overdue, yet it still seemed to catch investors by surprise. In times like this of market volatility, advisors need to have a communication plan ready to deploy to calm clients not to take rash action and to stay committed to the long-term vision. Advisors need to earn their keep by helping their clients understand associate risks, and allaying their fears, hopefully, in the same way you prepared them for days like Monday.

As I travel the country and spend time with advisors I know that all of you place great importance on your abilities to do this. The question is what happens when you need to reach all of your clients at once and the old fashioned face-to-face or one-on-one just isn’t fast enough? It is incumbent to be prepared with the right technology to deploy communications very quickly.

I happened to see a great example of planning ahead and acting fast Monday from Greg Friedman, Founder and CEO of Private Ocean and Junxure, with whom I’ve worked closely. Friedman, was able to dash off a very compelling communication to his clients to help them understand what was happening and to stay the course. Friedman, a technology savvy advisor, was able to use his CRM to pull together the communication in short order and leverage the electronic communication platform to make this a simple process, because he planned ahead. Nice work Greg (and Private Ocean team) and I am sure there are many other examples out there.

So, the one thing we know to be true is that there will likely be more volatility ahead and likely even more questions from your clients. It reminds me that some of the best lessons advisors espouse for managing wealth can be said for managing communications with your clients as well – be prepared for the unexpected, know your move before you are in the storm, and stay calm.

As Senior Vice President and Managing Director of Advent’s Advisory Market Group, Dave is chartered with setting the strategy for serving the unique needs of high-net-worth advisors and wealth managers.

Posted in Advent Software, Advisors, Risk, Wealth Management

Don’t Risk Your Future Referrals by Ignoring Social Media


When social media really hit the scene a few years back, it caught many industries by surprise as a new way to connect with clients and prospects, while driving marketing initiatives and building brands online.

As an outlier industry, Wealth Management has definitely been one of the few that has been late to the party, due largely to initial compliance concerns.

In addition to compliance concerns, there were also some technology issues that made it difficult for advisors to construct, schedule, and archive social media communications. As with all things in the advisory market, innovative companies dove right in and designed solutions quickly to fill the void.

Despite the progress we have made on the compliance front, the late start has contributed to a pervasive view from advisors that these new communication channels are not effective in growing their businesses. However, one compelling reason we often cite to encourage advisors to use social media, is to use it as a way to enhance the referral process. More often than not, when people are given a recommendation to a professional or company, they will immediately research you and your firm online by “googling” your name.

If what they find about you and your firm is just a plain vanilla website, you could assume they will move on to the next advisor. If the next advisor has a rich LinkedIn profile, authored content on personal finance issues via a Twitter link to their blog and Facebook page that features their personality along with their expertise – you can bet that potential client will go to the firm with a more engaging online presence.

66% of advisors using social media have acquired new business via these channels, with the average AUM of $5.5 million gained, according to a recent survey by Putnam Investments.*

So, here’s one great and urgent reason to get involved with social media today, if you haven’t already: your future referrals may be at risk.

We’d love to hear how your firm is using social media to attract new business – share with us in the comments.

Not using social media for your business quite yet? Dive into the basics of social media and compliance in this recorded webinar.

*Networked: Financial advisors find success with social media, Putnam Investments

Kendall Reischl manages Advent’s external communications program through public relations and social media.

Posted in Advent Software, Advisors, Social Media, Wealth Management

Market Turmoil Puts Technology to the Test


Yesterday we witnessed a global market correction, only to wake up this morning to the Dow making significant gains. How long this turbulence will last and how deep it will go is anybody’s guess. Headline writers are pointing to fear and uncertainty about China’s slowdown and currency devaluation as a primary cause. In fact, though, many economists have been telling us a correction was inevitable, and history tells us it was bound to happen after a sustained run-up. It’s simply what markets often do.

For global asset and fund managers, this is when your technology (along with your nerve) gets put to the test. As the values of holdings fluctuate wildly, as trading volume soars, as managers and traders take defensive positions, and as clients jam the phone lines wanting answers, you need to be confident your systems can handle the stress and deliver the real-time data you and your clients need.

At Advent, we have built and tested our solutions for just such a scenario. We talk a lot about the “scalability” of our products, which in its most basic definition refers to the ability of a system to continue to perform optimally as it absorbs increasing volumes of data and processing demands. We have invested heavily in scalability across all our products, and tested them under simulated conditions that few firms are ever likely to face in the real world. We know we cannot cut corners when it comes to data capacity, processing efficiency, integration, and connectivity with counterparties and data sources.

We’ve supported our clients through turbulent times before – in September of 2001 and 2008. But it was in the wake of the ‘08 financial crisis, the term “operational risk” became more prominent in our vocabulary, especially in the hedge fund arena. While investors expect a certain amount of market risk, they are less forgiving of risks of mistakes arising from a weak operational infrastructure, and there are often times new demands placed on our clients following a market event like we saw yesterday. That’s why system integrity is high among their due diligence priorities. One of our chief goals is to help our clients minimize operational risks – and demonstrate system integrity – with a combination of technology and operations expertise they can rely on in volatile times.

Whether you are a long-term investor or a short-term trader, a market correction is bound to test your confidence and fortitude. When you can’t count on the markets, however, you should be able to count on the information you’re receiving and your ability to execute your decisions.

Robert joined Advent in 2001 and now leads the global solutions management and client experience teams for the institutional and alternative asset management market group. Responsible for designing solutions on and around Advent’s award-winning portfolio accounting platforms and ensuring that Advent’s solutions continue to keep pace with the rapid change in the market, Robert is also chartered with making sure our clients get the full value of their relationship with Advent through superior service and support.

Posted in Advent Software, Asset Managers, Hedge Funds, Risk

Ignore the Robo Siren – Stick With Your HNW Core Competency


In our recent Robo blog posts, we discussed the components of Robo technology that can work for advisors, potential strategies for leveraging advisor-friendly Robo platforms and ultimately, whether or not a Robo offering even makes sense for advisors to launch, given the unique characteristics of RIAs.

Here, we’ll make the case that deploying an online Robo offering, particularly one that is “on the side,” and not integrated into your core offering, may actually do more harm than good.

As we highlighted in our first blog post, the hype and headlines of early Robo success is causing some advisors to have a knee-jerk reaction and immediately want to launch their own Robo offering, assuming that they will be disrupted by technology if they don’t act quickly.

However, the implications of heading down this path can be business-ending. As the industry is realizing, the key to making a separately branded Robo work is being able to drive large volumes of Internet traffic to your Robo website, which will require spending significant resources to generate that interest.

To further make this point, consider the recent comments from Schwab CEO Walt Bettinger regarding his “free” Robo offering on a recent earnings call.

“It will come down, we believe, once again to brand and distribution. Building a B2C brand is incredibly expensive, as we all know, and difficult.”

Bettinger went on to say that, “There will be a whole breadth of solutions and it will further complicate and confuse in the eyes of the consumer what is available in this online advisory space, which we think again drives it back to brand and distribution.”

As community based RIAs, you have to ask yourself, do you have a national brand and distribution? Can you compete with the likes of Schwab, Vanguard, LPL and other financial services giants on a service model whose AUM revenue model is going to zero?

Ultimately, the key to Robo advisors’ offering is simplicity. These software platforms work for very simple portfolios and financial situations. Anything with complexity, such as tax issues, ownership structures, gifting strategies, multi-generational wealth, estate planning considerations, titling of assets, alternative and private investments, real estate, etc., are areas where advisors’ skills and knowledge shine.

There will always be a market for expert advice that commands premium pricing. Consider the impact that Turbo Tax had on the accounting industry 10 years ago, when CDs with tax software started landing in people’s mailboxes. Those definitely impacted anyone who was charging for filling out 1040’s; however, the demand for and growth of CPAs who can handle complex situations has continued to grow and expand every year.

While launching a stand-alone Robo can be a questionable strategy, there are many benefits from the Robos that advisors can embrace. Advisors can deploy the best of Robo technology to provide a compelling website and interactive client portal with account aggregation, as well as to engage clients online and on their phones, while bringing in operational efficiencies in back offices to lower costs.

Check back in a week for the final post in our Robo series.

Timothy D. Welsh, CFP® is President and founder of Nexus Strategy, LLC, a leading consulting firm to the wealth management industry, and periodically blogs for Advent’s On Point blog. He can be reached at or on Twitter @NexusStrategy.

Posted in Advent Software, Advisors, Trends, Wealth Management

Are You Evaluating Robo Technology for Your Practice? Three Strategies To Consider


In our first Robo technology post, we discussed whether or not going the Robo route was right for you. Here we’ll give you a strategic framework to think through what Robo technology business model could make the most sense in order to grow and enhance your business.

There are some very compelling strategic benefits to creating a Robo offering in your practice. An automated investment capability provides you with the ability to target and profitably serve new markets, such as tech-savvy investors who crave a rich online experience, emerging professionals, the children of your current clients, and other client accounts.

When thinking through Robo technology business models, there are basically three options to choose from:

  1. Creating a stand-alone, separately branded Robo business
  2. Utilizing a Robo TAMP model to outsource investment management
  3. Creating an integrated Robo offering to complement your current operations

Option 1 – Stand Alone Robo

The key to having a separately branded Robo offering is being able to drive traffic to your Robo website. With this strategy, you are going direct to prospects with a marketing message, and you will need to spend significant resources to generate that message and interest in the offering.

Key considerations include: What will be the cost of client acquisition? How will investors be able to find your Robo online? A “Robo on the side” business works best for famous or well-known advisors, who have a mass-media platform, such as a radio show or social media presence at their disposal. Otherwise, stand-alone Robos will require a large volume of Internet traffic developed from spending hard dollars on advertising, direct mail, social media, email campaigns, even billboards, TV commercials, and more.

Option 2 – Robo TAMP Model

In this model, advisory firms outsource their entire investment management operations to a Robo platform, very similar to using a TAMP, but at a much lower cost. The advantage to doing so is realizing both operational and cost efficiencies. Advisors are able to focus the majority of their staff time on relationship management and providing a broader service model in order to generate new revenue opportunities from charging separately for financial planning and wealth management services.

The downside to going this route, however, is that your portfolios will be passive and fairly simple.

Option 3 – Integrated Robo Offering

By integrating an advisor-friendly Robo platform into your current operations, you will be able to expand your business to target new markets with a different cost and service structure, while maintaining your current comprehensive wealth management infrastructure and offering.

The target market for this approach is clients who are below your profitable minimums, accounts from the children of current clients, or referrals from important centers of influence that you take on to maintain that referral relationship.

Additional target markets for this strategy are emerging professionals, such as new doctors, lawyers, MBAs, etc. Upon graduation, these future high-earners often have hundreds of thousands of dollars in student loans, so are not ideal at the time. However, within 5-7 years, these professionals will be making significant income, some in the seven figures. It is your long game. These are the high net worth clients of the future why not attract them early with a low cost solution?

Regardless of your strategic approach, industry experts all agree that bringing automation into your business can result in significant business benefits.

Check back in two weeks for our next blog post in our Robo series on sticking with your HNW core competency.

Timothy D. Welsh, CFP® is President and founder of Nexus Strategy, LLC, a leading consulting firm to the wealth management industry, and periodically blogs for Advent’s On Point blog. He can be reached at or on Twitter @NexusStrategy

Posted in Advent Software, Advisors, Trends, Wealth Management



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