B E A C O N S T R A T E G I E S, L L C // N E W S L E T T E R // N O V E M B E R 2 0 2 0
Challenge and Opportunity
Happy Thanksgiving! Wow! 2020 has been a tough year. Yet, using my favorite phrase as a benchmark, change is constant, and the wealth firm business model as we have known it will forever be different than ten short months ago.
Talk soon!...Chip ♦
Musing from the Beacon Team
RON FISKE
- Developing an on-line presence – While it may seem that the last thing the world needs is another blog or podcast, some of the most prominent advisors have decided to focus on extending their brand using technology to new customers. Referrals can be tough in an age where people are just seeing less of each other, so it has been interesting to see some of the best advisors helping client navigate financial challenges through technology. The topics I have seen in this area run the gamut, but include obvious ones like retirement planning and not so obvious ones like financial planning for families with special needs children.
- Develop your Zoom skills – It can be disconcerting to look at yourself through a video camera on a Zoom call. Given that this may be the first time a prospective client sees you, are you taking care to look your best? This may extend, believe it or not, to the books you have in your bookcase. I was on a Zoom call recently and called out that someone had an interesting book behind them, which happened to be somewhat politically charged. You wouldn’t want to turn off a prospective client based on something as innocuous as the books on your bookshelf.
- Digital marketing campaigns– Firms like Snappy Kraken and others work with advisors to develop multi-channel digital marketing campaigns. Whether it is e-mail, on-line advertising or social media, advisors can get their word and brand out in what can be a cluttered environment for investors. ♦
ALAN GIANCATERINO
You may remember the vintage electric football game where you painstakingly setup the players and then flipped on the power to watch bedlam ensue. If you were lucky, your ball carrier would erratically move around the board and hopefully into the endzone before going out of bounds. The result was usually lots of effort with little return.
Now stop and ask yourself, “Is our sales team operating like that old electric football game...lots of effort with few wins?” If you answered “yes” to the above question, then your firm is likely in need of a review of its current process.
Repeatable Success. Start by looking at what you consider to be one of your firm’s best Clients and breakdown the steps that went into winning their business. Five to seven steps are recommended. Each step should have demonstrable progress towards closing the sale and be weighted towards the goal.
Veteran sales team members as well as new hires will come up to speed more quickly and produce more sales. In fact, according to a study conducted by ACT CRM, firms that implemented a standardized sales process were found to have 18% greater revenue growth than those that did not.
Measure Before Managing. Benchmarking your Salespeople with key performance indicators (KPIs) becomes much easier with an established sales process. Reviewing KPIs allows you to help them succeed by identifying what is working and which areas need attention.
Resources. Beacon Strategies can help your firm implement and track a dynamic sales process. Contact us today to learn more about this and other valuable services we offer. ♦
BY BEACON STAFF
JERRY WACKERHAGEN
Trends in Vendor Management
More firms are relying on their vendors to process, store and manage client data. Having a robust Vendor Risk Management Program is essential to the success of your company. Recent discussions with Wealth Managers and Third-Party Vendors show current trends in how to better your firm’s relationships with vendors and improve their performance.
Here are a few takeaways we’ve heard from firms:
- 68% of business leaders feel their vendor risks are increasing – cybersecurity, operational, financial, reputational, legal, regulatory, and more.
- Despite their security protocols and due diligence, most firms remain exposed to risk.
- Protecting the Personally Identifiable Information (PII) of your Clients is mission critical.
- Only 5% of companies' folders are properly protected, on average.
- An incident reporting protocol and remediation plan must be established and tested annually.
- Mission Critical and Critical Third-Party Vendors must be constantly evaluated with continuous improvement in assessments, not a one and done only when contracts are signed.
- Costs of protection include the avoidance of costs from the risk from hackers, fines from regulators and client retention.
Firms need well-defined plans to mitigate risks. A “Do it Yourself” approach can lull your firm into a false sense of security. The good news is there are tools, templates, and processes available to accelerate a robust vendor management program.
From the Vendor’s point of view, they are struggling with how to handle the multiple Request for Proposals and how to move from being just another vendor to a true Business Partner. Their challenges are:
- Determining if the RFP is valid or just a fishing expedition.
- Proactive Service to clients for reporting is the new normal.
- How to be a true Business Partner that proactively provides continuous improvement in assessments.
If you have issues, challenges, or simply want to improve your Vendor Risk Management Program, reach out to us to discuss how we can help mitigate those risks.
Flash Innovation Lab
Companies Moving the Innovation Needle
One of Beacon’s missions is to become fluent with innovative technology and service providers who offer enterprise wealth companies, and their advisors with new solutions. In this edition of the Beacon Flash, we are highlighting two companies that we see helping to change the “we have a problem” narrative at enterprise wealth firms.
Automating Product Guardrails
Since the original rumblings of DOL and, more recently, Best Interest, wealth management firms have struggled with proactively managing and monitoring their product shelves. The balancing of multi-custodial relationships and direct business has limited the ability of enterprise wealth firms to create a robust product management function, leaving them with product shelf anarchy. Independent firms have struggled with managing the plethora of selling agreements surrounding their mutual fund, ETF, insurance, and alternative product partner relationships. A few years back during DOL some IBDs were so fearful they were going to cut their product offerings to a shadow of the number of fund families and available products that their Financial Professionals could access and sell to their investor customers. Indeed, many firms have reduced their offerings, but are still struggling with the administration of their partner relationships as they confront greater operating risk and revenue compression. Fast forward to today, InvestorCOM supplies a product shelf framework that goes by the moniker ShelfMonitor that is designed to help enterprise wealth customers proactively manage their product shelf and monitor how the myriad of products on the shelf change over time.
InvestorCOM has another neat solution, tagged as PeerCompare, which is populated with multiple data sources, empowering Financial Professionals to compare like product choices, or reasonably available alternatives (Care Obligation), in an intuitive and consistent manner across the enterprise. Importantly, the available choices are interconnected to the products made available (and managed via ShelfMonitor) on the firm’s shelf.
After a recent demonstration with InvestorCOM, the Beacon team asked when the mics were off, “where was this product prior to DOL.” Another comment was “this really creates cooperation between Financial Professionals and compliance.”
With a changing of the political guard here in the US, the pendulum may be swinging back to a more structured regulatory environment. InvestorCOM’s CEO, David Reeve is not concerned, stating that their “compliance platform was designed to conform to more stringent regulatory requirements” should that be required. Reeve added that their solution “is highly intuitive and incredibly fast to implement. In just two weeks, we can get wealth management firms up and running on both ShelfMonitor and PeerCompare.”
No one has effectively solved the product shelf need in the past for those that support direct business with their brokerage. InvestorCOM can solve many of the gaps that we saw raise their heads during DOL. If you are going to where the puck is going, you may want to take a look at InvestorCOM. ♦
Industry Leaders' Perspectives
Salesforce Overlays
BY GUEST WRITER
MIKE OVERDORF
How to Harness the Power of Data – and Forever Eliminate the Challenge of Data Silos
For many broker-dealers and RIA firms, data ownership, accessibility and portability issues remain a constant challenge. Significant amounts of data are stored in silos within organizations, where it is not normalized and is difficult to aggregate and access. This makes it difficult to control risk and consistently meet a variety of operations and compliance requirements.
Home office teams and advisors in the field must be able to access data when they need it. If you’re like most firms, you’re likely receiving data from different sources on a regular basis, adding to the data silo challenge. With remote work becoming the new normal, the value of cloud-based data and system accessibility and security is clear to manage advisors, clients, compensation and compliance as reporting requirements evolve.
Bringing together data and functionality onto one cloud-based platform, leveraging the power of the Salesforce ecosystem, can efficiently support home-office operations – from recruiting and managing advisors, to processing advisor commissions and performing compliance checks. Such a solution would collect data from the right aggregators, clearing firms and custodians; normalize it in a single database; and make it accessible to multiple applications, workflows and reporting
The result is greater efficiency across compliance, operations, advisor and client servicing functions. Financial advisors can see their clients aggregated holdings. Compliance officers can easily check on advisor licensing, trade blotter exceptions and client suitability. Commission teams can import compensation data. In addition, senior management can leverage the power of Einstein Analytics to discover important trends and behaviors across the firm, and gain visibility into complex data structures.
With a single, cloud-based operations platform, your firm will be well on its way to effortlessly harness the power of its data, and make data silos a thing of the past. With a single, cloud-based operations platform, your firm will be well on its way to effortlessly harness the power of its data, and make data silos a thing of the past.
BY GUEST WRITERMARK BUTLER
Why Should Anyone Be Led by You?
There is a famous article by the same title that was published in the Harvard Business Review twenty years ago. Although the article is not specific to the wealth management space, it is a great question for leaders in our space to ask. Here are a few thoughts on how wealth management executives can think differently:
What Got You Here Won’t Get You There –Ask yourself the tough questions. Does your current team represent the leadership and carry the skill sets required to be successful in two years? Is the platform for your advisors going to help you recruit new advisors and help them attract new clients? We have seen the growth-minded clients we work with ask themselves the tough questions and effectively pivot.
Your Value Proposition – Those firms with whom we work who have been able to demonstrate their relevance and grow over time are doing so because they are able to successfully convey their value proposition. These firms have capitalized on what is unique about themselves. They develop strategic plans and align themselves around measurable metrics of success.
Put People First – People and teams drive success. Your people want to be part of something that is exciting and inspiring; a place where they can contribute. Integrity, trust, and a concern for people are critical. It is a fact that well led teams with higher employee satisfaction scores produce better business results.
There are a lot of factors that have driven the industry consolidation of recent years. From my perspective, the difference between those that have survived and those that have not comes back to the leadership at those firms. Please join me on LinkedIn to continue the conversation. ♦
