platforms, turnkey asset managementplatforms, established RIAs and otheroutsourced technology providers we canrent the stack from.
Many are cloud-native, affordableand cybersecure. We can immediatelywhite label with our chosen tech partner and go to market with it.
Not having the burden of a technology stack that we have to procure,
manage, integrate, update and operate on our own, will free upcountless hours of staff andadvisor time to drasticallyincrease our capacity, profitability and scale.
To truly custom build ouradvisory firm to our uniquespecifications, our entitywill be organized as an independent RIA. These firms have themost flexibility in terms of businessmodels and services offered, whilealso having a fiduciary standard ofcare, aligning our mission with ourclients’ needs.
Most notably, we will establish thefirm as a virtual enterprise, with nophysical office spaces to staff or manage.If there’s any silver lining to the pandemic, it’s that we have learned that clients are more than comfortable meetingwith professional service providers overvideo conferencing and collaborationtools, relieving us of the burden of having any physical, geographic location.
In fact, many staff and clients maynever want to return to an office settingagain. Mmanaging a remote workforceis no longer the exception; it is rapidlybecoming the rule.
Removing the constraints of geogra-
phy also means that as a virtual firm,
we can recruit the best advisor and staff
talent anywhere in the world, while
pitching our services globally. This signif-
icantly increases our target market size
and potential reach, while saving money
on overhead and gaining access to human
talent regardless of where it’s based.
Unlike most of the advisory industry,we will not be based solely on an assets-under-management pricing model orhave any asset minimums. We’ll offerour financial planning and investmentmanagement services on a true fee basis,enabling subscription models, hourlyengagements and retainers, in additionto an AUM model for those who want towork with us that way.
Clients can choose to pay us anywaythey like — via credit card, electronic transfers, other digital channels orthrough basis points on their AUM balance. We’ll be able to digitally onboardand facilitate these choices automatically by using the latest digital billingand payment processing technologies.
As noted by many industry experts,the AUM model prevents advisors fromworking with high-earning professionals who don’t yet have enough assets tomanage. They do have plenty of incometo pay for professional advice that theyneed, but they just can’t pay it throughan AUM fee and thus are not prospects for most firms in the industry thatrequire minimum asset levels.
This will be the perfect grand slam inexpanding our potential target marketto the 98% of investors who aren’t beingserved by advisors simply because theydon’t already have a sizable nest egg.
We’ll lead our advisory firm with financial planning as our core offering, charging a premium fee for our valuableadvice while bifurcating our investmentmanagement services as a separate fee,at cost.
Investment management has becomeso commoditized that it’s now beingoffered for “free” at many of the largerinstitutions. That is not where we’ll beable to add value, nor what wewant our brand to stand for.
MARKETING AND SALES
On the marketing and sales
front, we’ll go all in on digi-
tal marketing — publishing
valuable content through
social channels and search
platforms to engage our tar-
get market and position our-
selves as experts in our target
niche. These efforts should attract sig-
nificant media attention and exposure,
resulting in powerful brand building and
lead generation opportunities.
To connect the dots on the impor-
tance of our brand name in the market,
we need to own our brand name via
our website URL (or domain) and the
associated handles (or usernames) on all
digital and social platforms.
Ultimately, what we’ll build is anadvisory firm that has the brand, operational excellence, client centricity andcompelling value proposition for adefined market, as well as a powerfulgrowth engine and global reach. Theseare the key components to building asustainable enterprise that can be easilypassed on to the next generation of owners as we look to move on to our nextperfect game.
Timothy D. Welsh, CFP, is president, CEO andfounder of Nexus Strategy, LLC, a consultingfirm to the wealth management industry andcan be reached at firstname.lastname@example.org or onTwitter @NexusStrategy.
If we were to extend this model
of perfection in sports to the
business of advice, here’s how
it might manifest itself in a
theoretical “perfect” firm that
can stand the test of time.