7 Best Practices of Successful NextGen Advisors

This is a summary of a panel from the Money Management Institute’s 2014 Annual Convention.  The panel included representatives from a wide range of distribution channels, including a wirehouse, insurance broker-dealer and an online advisor.

Moderator: David Berkowitz, President, Lincoln Financial Network
Panel:   Eli Broverman, Co-Founder & COO, Betterment, LLC
James J. Detterick, Managing Director, Corporate Client Group Director, Morgan Stanley
Andrew J. Wigzell, Senior Financial Planner, Barnum Financial Group, MetLife

How important is it to establish relationships with children of Baby Boomer clients?

Over the next decade, Baby Boomers will be retiring at the rate of 10,000 per day.  Since Boomers make up a large percentage of most advisors books, if they don’t reach out to their children, eventually they won’t have clients left at all, Wigzell pointed out.  As a 41 years old advisor, Wigzell will be retiring sometime in 2037.  He said that he plans to keep adding clients who are younger than he is so that he will have clients to manage when he retires.

Wigzell is used to working with clients in the 49-65 year age bracket, so he recently added a Gen Y’er to his team to focus on reaching younger generations through the use of technology. 

In sharp contrast to the other panel members, the median age of Betterment clients is a mere 35 years old, Broverman reported. The firm’s methodology of engaging with investors through digital means is the primary reason for this, he stated.

Broverman quoted a statistic that 71% of Gen Y’ers would rather visit the dentist than go to a physical bank branch.  (He didn’t mention who came up with that unusual question or how many people were surveyed, but I would imagine they have very healthy teeth)  While it’s well-known that younger people are more inclined to use technology, another statistic he cited was that 4 out of 5 people across all demographics prefer to bank online.
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Orion Pumps Up Financial Planning with ASI Integration

I have been writing for a while about the trend of advisors moving away from stand-alone investment advice and more towards a household-level, holistic approach to managing client wealth.   Of course, the right tools must be available to them for this approach to work and they must be able to scale with their business.  (see Why Don’t Advisors Have Tools to Provide Holistic Advice?)orion_logo

Orion Advisor Services, LLC (“Orion”), a provider of wealth management solutions for the financial advisor market, recently announced a partnership with Advisor Software, Inc. (“ASI”) to integrate the two companies’ software applications.  Specifically, they are integrating the Orion Connect advisory platform with ASI’s goalgami Pro financial planning software.

Wanting to learn more about this partnership, I was able to arrange a call with the CEO of Orion, Eric Clarke.  Orion is the nation’s largest privately held portfolio accounting service bureau and has recently made a string of technology-related announcements including replacing their in-house rebalancing software with Total Rebalance ExpertContinue reading