Archive for May, 2011

AK Quoted in Article on Private Bank RIA Acquisition

Friday, May 27th, 2011

The article I am quoted in concerns the acquisition of Analytic Asset Management by Fieldpoint Private Bank and Trust. Click here to read the article, which appeared in FundFire. Analytic is relatively small – managing approximately $275 million. But it represents the bank’s strategy of increasing its number of locations via strategic acquisitions of advisors.

The article explores the question of whether it is more important to expand into particular locations – in this case New York City – or expand in locations where you can hire the highest quality advisors. This is the topic the reporter queried me on, and I agree with the bank’s CEO that acquiring the right people – human capital – is more important today than hiring in particular locations.

This phenomenon is partly a result of the financial crisis, where firms are being more prudent in how they spend money. But it is also a result of technology and the growth of social media. With more efficient ways to communicate with your clients being discovered every day, the location of your office is less important. The one caveat here is if you are in a location that is isolated and makes it difficult for you to get to your clients.

The cache of being in one location versus another takes second place to acquisitions that make strategic and financial sense for a company and help it execute its plans. I know, this is ironic coming from someone who just move to NYC – but in all honesty, my clients don’t really care where I live!


What High New Worth Clients REALLY Want

Tuesday, May 24th, 2011
Last Friday’s blog was entitled “Do You REALLY Know What High New Worth Clients Want?” It discussed the results of a Cerulli Associates/Phoenix Market International survey of the top nine things that high new worth individuals look for in advisors. My blog listed the nine things, but not in order of importance – go back and read last week’s blog now, because this is your last chance to try and rank the nine things yourself before I show you the answers…….


  1. Maintain lifestyle in retirement – 31.4%
  2. College education funding – 19.6%
  3. Protect current level of wealth – 14.6%
  4. Aggressively grow wealth – 14%
  5. Leave an estate for heirs – 9.8%
  6. Charitable giving – 4.2%
  7. Minimize income and capital gains taxes – 2.4%
  8. Improve household cash flow – 1.9%
  9. Better manage market risk – 1.9%


Now – how does your marketing strategy and product and service offerings match up with these results? We all know that surveys will come-up with different results, but the general lessons are all pretty consistent these days:

Especially in light of the economic difficulties that so many people have experienced over the past few years, more and more people are worried about their retirement, about funding their major obligations – such as college – and about preserving the wealth that they have attained. Preservation has for most surpassed growth. The new mantra for many has become Retirement, Retirement, Retirement.

Consistent with the above, high net worth individuals are more concerned with long-term concerns than shorter-term ones – such as minimizing taxes this year and managing market risk. That is not to say that these concepts are not important and that they should not be addressed – they should. But they should be somewhat down the line in the presentations that you give clients and prospects.

Make your clients concerns your concerns and your focus and you will be more successful in growing your business.

Do You REALLY Know What High Net Worth Clients Want?

Friday, May 20th, 2011

Do you REALLY know what high new worth clients wants from their advisors? Are your services and strategy – whether you’re an advisor, RIA, sponsor firm or investment manager – aligned with what people REALLY want? Investment News recently printed the results of a Cerulli Associates/Phoenix Marketing International study which ranked the top nine reasons why high net worth clients use advisors.

(Full disclosure – the article did not detail how many people were surveyed, what their average investible assets were or what the definition of high net worth individuals was; but given that these guys are well known and respected in the industry, I’m going to assume that this was a fair sampling.)

In any case, the results should make you sit back and ask yourself the questions – Given my services, am I targeting the right audience? If not, what should I change and how should I change it? Do I change my target audience? Do I adjust/fine tune the services that I offer? A little of both?

Here are the top nine answers – I’m going to present them today in no particular order and provide the answers next week – take some time to think about the answers and rank them – also, think about the relative importance of each. Here’s an interesting point- the top answer was selected by 31.4% of respondents, while the second most popular answer was selected by 19.6% of respondents – quite a difference.

Here you go – the top nine answers – have fun sorting them out! Remember – today they are in no particular order.

  • Protect current level of wealth
  • Leave an estate for heirs
  • Better manage market risk
  • Minimize income and capital gains taxes
  • Maintain lifestyle in retirement
  • Charitable giving
  • College education funding
  • Aggressively grow wealth
  • Improve household cash flow

Have a great weekend!

Is Your Website a Dinosaur?

Tuesday, May 17th, 2011

As the financial services industry increasingly embraces social media, a natural question becomes the role of you or your company’s website vis-a-vis its overall social media strategy. The days of discussing whether or not your website is a dinosaur only in the context of how old it is and whether it serves more of a purpose than just being an electronic brochure, are long gone.

(By the way, if when you read the words “social media strategy” above and thought to yourself “what’s that?” your marketing problems probably run deeper than just the effectiveness of your website!)

If you haven’t updated your website in awhile it could very well be a dinosaur – especially if it is just an electronic brochure – and you probably need to update it, make it more interactive and make it more relevant.

If your website is up-to-date you have passed the first test. However, it still might be a dinosaur if it does not have a well-defined place in your overall marketing and social media strategy. In fact, given the interactive nature of social media, and the ability it gives you to form a community with clients, some are now even questioning whether you still need a website.

My answer is an emphatic YES. In fact, the issue is addressed quite well in the recent article Is It Time To Shut Down Your Website? There are definite advantage and disadvantages to social media Рe.g, LinkedIn, Facebook and Twitter Рand to websites. Each tool has different strengths and weaknesses, which means that those who can integrate the best of each together into a cohesive marketing and asset gathering strategy will be the most successful.

For example, and most importantly to me as the article points out, while you will be able to reach portions of your clients with each of the social media tools mentioned above, you will be able to reach all of them with your website. Might there be some duplication? Sure. But overlap is better than missing anyone. Websites are also your property and you own it – unlike social media sites where you don’t have ownership.

I am a big fan of social media. But I am also a fan of well designed and integrated websites. At the end of the day, the first thing most people usually do to find out more about you is “Google” you or go to the website listed on your business cared – use this as a springboard to link to your social media sites. It is still a red flag in terms of credibility if your answer to a prospect is that you don’t have a website. A website ads instant credibility (of course as long as it is a good one!)

So it is actually now more important than ever to make sure that your website is not a dinosaur!

Why Can’t BofA Merrill Get it Right?

Tuesday, May 10th, 2011

With all of the money that BofA Merrill likely spends on PR and advertising, it amazes me that they can’t control their corporate message better – at least as far as their wealth management unit is concerned.

Yesterday’s Investment News is another example of this phenomenon, where an article entitled “Grumbling Herd Complains About Cross-Selling” appeared. I have blogged about this topic before – old Merrill Lynch brokers feel that their parent is pressuring them to sell BofA products such as mortgages and credit cards – and many don’t like it. (I use the word broker here, even though I don’t like it, because the article does.)

The headline is negative as are many of the unidentified brokers that “grumbled.” Not in the headline are the few brokers that also commented in the article that they actually like having these addition products to sell and that they feel that being able to address their client’s liabilities is actually a competitive advantage.

Reality is that whenever a bank buys a brokerage – or in any merger for that matter – there will always be some pressure to cross-sell. Whether we like it individually or not, it makes sense from a corporate point of view. In fact, whether you want to sell these additional products or not, it certainly makes sense to let clients know that you have the ability to sell them – an additional arrow in your quiver.

So what is the problem here? The problem is that BofA has sidestepped the issue rather than address it head on, and therefore the media and some of its more vocal brokers are controlling the issue. As an outsider, we don’t really know how much pressure is being put on brokers to cross-sell. There are always two sides to every story. But we do know that the company’s response has been less than adequate because the negative publicity continues.

What should BofA do? Grab the issue back from the media – tout the advantages to clients and the general public of the vast array of competitive products that are available – leverage your strengths! A PR or advertising campaign targeted on the advantages of the breadth of offerings would certainly silence some of the internal critics and demonstrate that the firm is on top of the issue. It certainly couldn’t do any harm – I for one am getting tired of seeing these headlines, and I’m not even a client or prospect!

Brokers have always had to fight the battle of being “pressured” into selling in-house products. But trust me, if the broker is successful enough, he or she will be able to resist the pressure and run their business however they want to – BofA is not going to lose a million dollar producer over credit cards – I guarantee it. But they are losing the public opinion fight right now – they should aggressively address the issue now before it gets any worse.

Are You an Alpha Advisor?

Thursday, May 5th, 2011

At the end of March I blogged about the rebellion of wealthy investors, and the growing trend of these investors hiring multiple advisors. (See March 28th blog entitled “The Wealthy Rebel – Advisors Beware.”) The issue continues to get more and more press as additional studies with similar results continue to be published.

If you aren’t an Alpha advisor – beware – your business might be at risk. Unless you want to focus on smaller investors – those that tend to be a lot more fee-sensitive and who don’t have enough assets to hire multiple advisors – your marketing strategy MUST include a way to position you as the leader of the group of advisors you clients are likely to hire. The Alpha advisor acts as the client’s financial hub, is aware of the other relationships, has the ability to report on these other assets (and is given access to the information) and is likely to take a holistic approach – having the capability to address the client’s most in-depth financial issues.

The latest study I referenced above was released by State Street Global Advisors and Knowledge@Wharton. 55% of respondents indicated that their primary advisor was unaware of the decisions and performance of their other advisors. What does this mean? It means opportunity for advisors who can explain the downside to such a isolationist strategy. Without someone overseeing the client’s entire investment portfolio, investors who are trying to protect themselves by diversifying across advisors are actually increasing their risk – overlapping sector or individual investment exposures for example could result in an overall portfolio which does not match the client’s investment goals and risk tolerance levels.

In addition to being able to charge for oversight – adding a new revenue stream to your practice – you greatly increase your chances of keeping clients by being the Alpha advisor. But you won’t know the answer to the question of whether your clients have multiple advisors unless¬†you ask – why not make if part of your regular quarterly meeting/referral process?

One other interesting result from the study to keep in mind – the best practices of Alpha advisors usually includes transparency of fees, open architecture and solid rationale and documentation to back-up their recommendations.