The stakes of failure holding up your innovation?

But as an advisor, it’s innovate or …

No worries, I’ve got you.

If you want business progress,

You must innovate.
You must make change.
And change has consequences.

But, those consequences
Don’t need to be
All or none.

→ A shift in perspective.
→ A change in approach.
→ And you can contain the beast.

**Checkout the video**, I discuss
↳ A shift in perspective that
↳ Puts failures in a box.

Because no innovation → no progress.

From Bridging The Gap

The post Don’t Let Risk Stop Your Innovation first appeared on Blueleaf.

NOTE: The opinions expressed in this post belong to the author and are for general informational purposes only. These opinions do not necessarily reflect those of Blueleaf Wealth, Inc. the publisher, or its executives. The opinions are not intended to provide specific recommendations or advice for any individual or on any specific investment product. The sole purpose of this opinion piece is to provide education about the wealth management industry.

Disintermediation is not a new concept in banking and wealth management. DIY investing grew substantially in the 1970s and 1980s. The introduction of discount brokerage (Charles Schwab in 1975) helped propel its growth. As did the decline of pensions and the rise of 401ks and self-directed retirement. Despite fears, the wealth management industry grew.

Disintermediation along with other “threats” continue to unnerve the wealth management industry. We explore three big changes that, while discussed as threats, are more likely growth opportunities.

Mobile Is Creating More Potential Clients

The introduction of mobile banking in 1999 distanced consumers from the bank lobby. That accelerated between 2007 and 2010 when iPhone and Android made their respective debuts. The mobile apps that have followed since have driven ever more direct access to investing and banking.

Stop and think about that for a moment. When this firm Blueleaf was founded shortly after the 2008 financial crisis, mobile app technology was in its infancy and the web itself was just coming into its own. Fifteen years later, thousands of advisors and their firms rely on this firm’s client mobile app to deliver one of their core client experiences.

Mobile apps were also instrumental in the rise of robo-advisors in the last decade. Betterment wouldn’t have 615,000 users if they weren’t available on mobile. Wealthfront, their nearest competitor, has 440,000 users. Many of them are folks who wanted to invest but who otherwise may not have. 

That last sentence is really the point. Mobile is growing the investing and banking pie. As a result, it’s growing the pool of potential clients for wealth management. The apps are capturing users that might not otherwise engage with advisors at all.

Blockchain Is Driving Transparency and Lowering Cost

On October 7, 2020, the International Banker (IB) published an article titled, “Is Disintermediation the Future of Finance?” The unnamed author, makes some interesting points about distributed ledger technologies, cryptocurrency, and peer-to-peer lending. It’s well written, but it’s basically promoting Bitcoin and DeFi.

Bitcoin and cryptocurrency are interesting but the important technology is what it’s built on. Blockchain, the technology behind it, is where the change in wealth management is happening. You can learn more about it on the Augmented Advisor podcast. Blockchain is a Distributed ledger technology (DLT). DLTs and non-fungible tokens (NFTs) are creating new options to manage custody with far less need for third-party processing. This could disintermediate traditional custodians and lower costs.

DLTs eliminate the need for third parties to manage transactions and keep records because the DLT itself is actually a public record. They also provide an auditable common ledger to satisfy compliance officers. When fully implemented in wealth management, distributed ledgers could offer ultra-low cost, fully transparent trading, custody, and other business transactions. Blockchain makes that possible.

Recently, an artist called “Beeple” created a piece of digital art as a non-fungible token and sold it last March for $69 million. That was possible because of Blockchain and its ability to create one-of-a-kind digital assets. The technology will give advisors the ability to hold stored value assets in an easily transferable form. Moving those assets via DLTs means no transaction fees. Imagine the possibilities.      

Retail Micro-Trading Is Growing the Pool    

In March 2015, I started to hear about a new player in retail trading. A previously obscure trading platform, Robinhood, launched its mobile app. Using a business model that relied on Payment for Order Flow (PFOF), they did more than just offer direct investing. They offered no-fee trading.

I’m guessing I don’t need to get into the impact Robinhood’s approach had on wealth management. We all saw TD Ameritrade and Schwab go to no-fee trading and eventually merge together. Again, this “threat” appears now to be expanding the market. Attracting people who wouldn’t have been investing otherwise. By expanding savings and investing access these platforms are growing wealth management’s future client base.

Smart Technology Usage Turns Threat to Opportunity

Wealth managers considered Robo advisors a threat for years and are now using them as a tool to offer holistic services. You can now brand Mobile apps with your company name and logo and deliver a state-of-the-art client experience. That means you are the primary differentiator.  

Remember this term: Tech-Enabled. It must describe your firm. With you at the helm as the differentiator-in-chief, the technology we’ve described here can:

• Streamline your workload;
• more effectively communicate with clients; and
• scale your practice.

Automation is already available to you. Blueleaf can help you sort it all out.

The post Threats That Are Actually Growing Wealth Management first appeared on Blueleaf.

This is what financial advisors are up against. Client expectations are high because they know there are other options available. The only way to retain their business is to consistently demonstrate your value. In today’s article, we’ll go over some of the ways to do that.

Communicate with Clients when Making Investment Decisions

This is a common theme in our content here at Blueleaf. Transparency and frequent communication with clients are essential for success in the digital age. Advisors are frequently questioned about their decisions. It’s important that clients know why you make them.

A good example of this is the selection of model portfolios. Analyzing risk and suggesting a moderate or aggressive approach is a good first step, but it doesn’t paint a clear picture of how it lines up with what the client wants. 

Do they want to take an ESG approach? Are they still all-in on fossil fuels? Should you include FAANG stocks in their portfolio? Work to understand clients’ specific desires and then connect your own strategies to them. You may even want to incorporate some of the themes you hear from clients into your model portfolios.

The next step is to accurately report on those investment models using allocation descriptions that speak to your clients in the same language you do. If you’re not using the terms “growth” and “value” in your verbal conversations, don’t include them on performance reports.

When clients understand your investment strategy, their expectations in that area will be met. Taking the time to explain the who, what, and why of your decisions helps them to build confidence in your abilities. Ask questions and use simple reporting to provide updates.  

Simplify Your Communication

Speak to your clients in a language they understand, and make each conversation interactive, not one-way. Practice active listening. Their opinions are valuable. If you disagree with them, explain why, but remember that it’s their money being invested, not yours.

Probing for feedback in client meetings will tell you if you’re connecting or not. Add that to your toolbox.

This concept flows through to your performance reporting. Remember those fifty-page quarterly reports that break down Alpha, Beta, and Delta? Most of your clients have no clue what that means. They read the cover page and throw the rest in a drawer.

Simplify and automate your reporting. Use terminology that clients understand and give them the answers they’re looking for, without all the extras that demonstrate your extensive financial knowledge. Clients don’t care about that. They just want to know if they made or lost money. 

Teach Clients How to Talk to You

This is an often-overlooked exercise that leads to communication breakdowns. Advisors need to teach their clients how to express their expectations. It’s best to set the groundwork for this in the very first client meeting. In other words, ask them exactly what they want.

An initial client meeting should never be a sales pitch. There are reasons why this client sought you out. For the purposes of building a healthy relationship, you need to know what those reasons are. How do you find that out? You have a conversation with them.

As time goes by, expectations and life goals change. If the advisor and the client have become comfortable communicating their wishes, this is not a problem. Those changes will come up in a meeting or on a phone call. If that doesn’t happen, the two parties will grow apart.  

Clearly Define Roles And Expectations

Advisors can share information and allow their clients to make certain decisions, but their role should be clearly defined. Yours is the knowledge that’s relied upon to drive the investment strategy. Make sure you’re viewed from that perspective.

Never let the client run the show. Include them in the conversation, make sure you understand their wishes and expectations, and accurately report results. Don’t let them dictate trades or second-guess your decisions. You’re getting paid to do that for them.

We live in a different world than we did just a few short years ago. Clients are savvier. Technology is better. Advisors need to be more proactive. Despite all that, the key to success is still the advisor/client relationship. Make sure yours is what it should be.    

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The post Managing Client Expectations in the Digital Era first appeared on Blueleaf.

Some of what we have already experienced in wealth management this year is a continuation of the events and actions of 2020. Last year, we saw acquisitions by Schwab (TD Ameritrade) and Morgan Stanley (E-Trade). Expect more consolidation moves to come.

New administrators in Washington will also impact wealth management in 2021. The economic policies and executive orders of the last regime are gone. Taxes are going up. Green energy is taking center stage. Portfolio construction needs to evolve accordingly.  

Client Focus Shifts to ESG and Sustainable Investing

Social consciousness is on the rise — and people are focusing on Environmental, Social, and Corporate Governance (ESG). The environmental sector will benefit from a government-backed push for renewable energy. Fossil fuels aren’t dead yet, but the socio-economic climate that oil and gas companies are operating in is far from a friendly place.

Clients are savvy to all of this, so advisors need to ask more questions and get to know them on a deeply personal level. It’s time to start talking about morals and values, and then structure portfolios accordingly. Neglecting to do so could lose you clients.

Blue chips are still blue chips and financial performance cannot be ignored, but corporate governance is under a microscope. Expect to see C-suite and policy changes in some unexpected places this year. Evolution is the key to survival.

Tax Considerations Will Drive More of your Choices

The Biden administration is proposing a 39.6% capital gains tax for those making over $1 million and a 28% corporate tax (formerly 21%). The increases, though higher than anticipated, are not a surprise. They do, however, require adjustments to investment strategies.

That will mean holding periods will matter less for high income clients with no difference between long and short-term rates. Also, tax location choices will matter more as tax deferred accounts will be even more valuable to high-income clients. Investments in Munis may increase or real estate due to their tax advantages. And finally on the margin maxing out contributions to 401ks, IRAs, HSAs and all the other pre-tax and tax deferral opportunities will make more sense than ever.

Financial Advisor Compensation Models Will Change

The Obama administration’s proposed DOL Fiduciary Rule in 2015 focused a spotlight on financial advisor compensation plans. In 2021, the proposed rules are expanded to include retirement plans in advisors’ fiduciary duties.

Meet the new boss, same as the old boss. Joe Biden is not Barack Obama, but advisors learned a painful lesson about fee transparency in 2015. Expect to see compensation models continue to evolve this year, with different incentives and an emphasis on holistic wealth and financial planning.

Introducing Holistic Generational Wealth Transfers

Make a note of the term because you’ll be hearing it a lot this year. The older generation may not be quite ready to embrace ESG investing, but the younger generation is. That means that wealth building needs to incorporate it for the sake of generational wealth transfers.

The kids don’t want to inherit a portfolio of companies that are doing harm to the environment or supporting socially disruptive activities. It’s important to them. After all, they’ll have to live in this world longer than their parents do. Wealth managers need to be conscious of that.

An important point to note here is that holistic wealth transfers are not the same as holistic wealth management. The descriptor means “all encompassing,” but we’re talking about two different scenarios. Planning for a wealth transfer is a generational strategy.

Automation Will Determine Success or Failure for Financial Advisors

Implementing reporting and communications automation will enable advisory firms to scale faster and more effectively manage their clients. Using machine learning and AI to anticipate and automate client work will be how wealth managers compete with the scalability of robo-advisors.

Those who do this will succeed and grow their firms. Those who don’t will fail. It’s no longer a “maybe.” The technology has been tried, tested, and proven effective. If your firm is not using it, your competitors will eventually take your clients away from you.

Clients want a modern user experience. Even senior citizens are computer savvy these days, so why not use the tech? Many folks thought video conferencing wouldn’t work and look at what happened in 2020. The world has changed. It’s time to change with it.   

OPINION POST

[NOTE: The opinions expressed in this post belong to the author and are for general informational purposes only and are not intended to provide specific recommendations or advice for any individual or on any specific investment product. The sole purpose of this opinion piece is to provide education about the wealth management industry.]

The post Top Trends in Wealth Management in 2021 first appeared on Blueleaf.

Reflect back on how your firm did business ten or fifteen years ago. Back then, many “advisors” were commissioned sales people mainly focused on pushing product. Today most are fee-based or fee-only with many offering comprehensive wealth management and planning services.

Holistic wealth management and financial planning are in demand. Prospect pools, thanks to digital platforms and virtual meetings, have grown. Geographical boundaries not as important as they once were. Pricing, once a key differentiator, is a non-factor. Can you see the change now?

Blueleaf Helps You Roll with the Changes

In a world where all advisors are expected to offer holistic wealth management, the only way to differentiate your firm is through your client offering. Your offering is ever more digital and that means your technology is an ever more critical part of how you build a differentiated offering. Blueleaf, which was built for the rapidly evolving world we live in, can help you do this in the following ways:

·  “Always On” Access:  Clients want to go online and see their money. Banks have capitalized on that for years. The average working adult gets home after regular business hours. The Blueleaf client portal gives them 24/7 access to all their accounts and performance numbers, making the advisor’s job easier.

·  Automated Email Updates: Printed quarterly reports just don’t cut it anymore. Make a client wait three months for communication and they’ll forget you exist. Blueleaf sends more frequent automated email updates on your behalf to keep your firm top-of-mind with clients. Setting these on a weekly or monthly cycle has proven to be effective.

·  Holistic View of All Accounts: No need to log into multiple sites to see bank accounts, investment portfolios, and liabilities. The Blueleaf client portal pulls it all into one place for you, using best-in-breed data aggregation and banking-level security protocols. This approach makes your firm the central authority to clients on all things financial.

·  Client Behavioral Tracking: Asking clients to add all of their accounts to one portal is a trust-building exercise that pays off when advisors pay attention to client behavior. Blueleaf provides client insights, including email and document openings, to let you know what clients are thinking and how you can better serve their needs.

The client portal log-in page, any reports that you run, and the automated email updates are all branded with your firm name and logo, further enhancing the Blueleaf experience for your firm. We do all the work for you. Your firm reaps the rewards.

Simplicity is Value and a Brand Differentiator

When Blueleaf first entered the wealth management space, we heard stories about complexity everywhere in the business. Overtime, that complexity has gotten worse for your firm and your clients. Much of the technology in the market seemed to make the problem worse.

Simplicity has alway been a hallmark of what we delivered to our customers. We simplify customer’s business by simplifying their technology. The client portal delivers answers to clients most common questions immediately on login, updates are also automatically sent to clients so they don’t even have to login to get value from your firm and if clients have technical questions, we can answer for you, leaving you free for the important stuff.

This approach makes it easier for clients to buy into what the advisor is offering. Our sales team has a saying, “If a client has difficulty on their first login, they’ll never come back for a second visit.” Our designers and engineers have made sure that doesn’t happen.

Financial advisors want to have their finger on the pulse for their clients and not get lost in the weeds by using complex software applications. In most cases, clients do not have a degree in finance. Blueleaf breaks down financial information so they don’t need one.

When you simplify your information, you won’t have to explain it. Another popular catchword in advisor marketing is “transparency.” Your firm won’t need to promote that concept when you use Blueleaf.  Our platform is clearly transparent, no explanation necessary.

Creating an “Anxiety-Free” Client Experience

Investing and saving for retirement are emotional experiences for your clients. That’s why firms in the last century kept them in the dark. Don’t try that today. If your firm isn’t providing information to your clients, someone else will.

By combining all the features of Blueleaf, advisors can create an anxiety-free client experience. Automated emails keep them informed and also increase retention rates for the firm. Our customers stay with us because their clients love their experience with Blueleaf and our customers get all the credit.

Yes. The world is changing. That doesn’t have to be stressful, for the advisor or the client. Automation, insights, and communication enable the advisory firms on our platform to figure out where they add value and leverage that to better serve their clients.

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The post How Blueleaf Supports Your Firm’s Evolving Value Proposition first appeared on Blueleaf.

Constant change in an industry requires regular adjustments from those who operate within that space. For financial advisory firms, that means finding new ways to spotlight value to their clients. Is your firm adjusting to the shifting landscape in our industry?

Navigating that landscape as a wealth management firm is what today’s article is all about. Last week, we provided financial advisors a “How-To Guide to Communicating Value.” This week, we’ll talk about that at a firm level. How are you helping your advisors spotlight value to clients?

Your Pricing is Not a Differentiator

Transparency is a value, and your pricing is not a differentiator. Leading with either of those when prospecting for new clients is focusing on “table stakes” that all of your competitors are offering. What exactly makes your firm unique? Those points are what you need to highlight.

Conduct a market analysis of competitor wealth management firms and find out where the “white space” is. There are certain demographics and psychographics that are underserved by your competitors. Position yourself as a thought leader in those white spaces.

Owning that new white space niche is how you can successfully grow your business, but only if you communicate your value to prospects and clients. Publishing quality content about issues affecting your niche is one way to do this. Effectively serving your clients is another.

Spotlighting the Value Points of the Client Experience

Terms like “client-focused” and “transparency” are overused and will not differentiate your firm in 2021. Neither will the word “trust.” If you choose to spotlight that, you’re not only undifferentiated but may also actually cast doubt in clients’ minds.

Modern clients are looking for advisory firms they can have confidence in because they share a common vision with them. Everyone wants to be financially independent. How do you get them there? Spotlight actions, not cliches. The key here is to focus in on tasks your advisors do every day that, no matter how routine, add value in the lives of their clients. 

A good example of this is rebalancing. Instead of simply telling clients to “trust the process” because your advisors know what they’re doing, explain it to them. Use a phrase like, “This is how we rebalance your portfolio and why this action was necessary.” And communicate to them every time you do it. That’s spotlighting value.

Do the same with performance reviews. Clients today are financially savvy and technologically capable. They can get performance information on dozens of digital platforms. Understanding it from their perspective, with their context is unique to your relationship. Advisors in your firm should be the source of that information.

If you’re using an online client portal, remind clients about its value whenever you’re using the online dashboard to do reviews or answer questions. This, combined with automated communication, is the reason you’re able to give them more personal attention.

When your firm conducts performance reviews, spotlight how an advisor’s actions affect performance. Placing a personal note on the performance report, or in the client’s dashboard if you’re using an online client portal, shows them that you’re earning your fee.

For firms using a third-party mobile app like Blueleaf’s, the branding and communications help connect your brand and service to their daily experience of their money. This omnipresence on a client’s phone underscores where their valuable information comes from and reminds them of the value your firm creates in the background everyday.

Are You Using the Right Tools & Tech Or Just Wasting Time?

Even Heraclitus would smile if he saw the technology that we have available to us today. Automated communication and reporting platforms give wealth management firms the ability to create a uniquely branded client experience.

A good example of this is the use of branded automated communication via email or text message. Set a frequency that keeps you top-of-mind with clients so they’re regularly reminded of the value you’re delivering.

Mobile apps are an ideal way to deliver automated communications. Smartphones are ubiquitous and everyone from Gen Z to grandma is using mobile devices to stay in the know. Cater to these preferences by using a mobile app to send messages and updates, ensuring clients consistently see your brand. 

From a practice management perspective, technology also helps keep all financial advisors on the same page. Client messaging has to be consistent. An automated communication platform, preferably with an interactive mobile app, makes that easier to do.

Communicating clearly and regularly, spotlighting the actions and messaging of your financial advisors is how you demonstrate value to clients. This is time-consuming and tedious if you do it manually. Technology gives you the ability to automate it.

Do Advisors Want to Work for You? Not If You’re Not Doing This…

Value spotlighting to clients becomes a part of the overall value proposition of your firm. It can be used as an incentive to recruit new advisors, many of whom don’t yet have this where they are. Delivering unique value to your advisors in this way is one of the most effective ways to grow your business. Those advisors are looking for effective client communication.  

The US Bureau of Labor Statistics (BLS) projects that employment for financial advisors will grow roughly 4% in the next ten years. The Cerulli Group, a Boston-based research firm, estimates that 111,500 advisors will retire during that same time frame.    

Based on those statistics, there will be more jobs than job seekers in the wealth management space over the next decade. Advisors looking for a new firm to join can be selective because they’ll be in demand. How will you differentiate from your competitors?

Spotlighting value is an attraction to clients. Automating it is an attraction for advisors. Using the right technology is key to making that work. Implement both and your firm will be in good shape for this most recent round of changes we’re facing in the wealth management world.

Ready to see Blueleaf in Action?

Simplify your practice, Win more clients.

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The post Think Your Firm’s Growth is Tied to Price? Think Again. first appeared on Blueleaf.

The bad news is that it will be nearly impossible to compete without differentiation and a strategy that allows you to communicate your value. The good news is that it doesn’t have to be rocket science to accomplish those things. Frequent demonstrations of value for clients is an attainable goal for advisors and firms alike, especially with automation. We’ll walk through some strategies for ensuring your clients are clear on what they’re getting from you so that you can succeed and grow your practice.

Focus on Defining the Abstract

Your clients are looking for a demonstration of points of value, even when you don’t think they are. They’re looking to you to show them exactly what you’re doing, above and beyond sending a quarterly performance report or updated financial plan. They want to see the concrete ways you’re helping them meet their goals. Now, you might be thinking, “But the services I provide are abstract…” This is true, so we’re going to walk you through some ways you can turn abstract service into tangible value and communicate that clearly to your clients.

To start, think of all the various ways you add value that may seem like a “given.” For example:

Insights — You probably send your clients periodic performance reports, but providing key insights that go a step beyond a simple presentation of numbers can help you add value for your clients.

Presence & Availability — While you may have a few clients that take advantage of your availability, most clients are not thinking about you as much as you’re thinking about them. Frequent and regular emails can keep you top of mind and help to communicate that you’ve available for their questions and on top of their account.

Clarity — Many financial services providers overwhelm clients with pages upon pages of graphs and charts and jargon that may as well be written in hieroglyphics. If you offer clarity and easy-to-understand insights into how your clients’ money is performing, you are adding value.

Everyday Tasks — This is a big one. There are likely plenty of things you do each day that add value but that you may overlook simply because they’re so routine. For example: 

• Rebalancing portfolios requires you to spend time actually reviewing your clients’ portfolios to evaluate performance. Clients are not aware of this unless you let them know. Consider adding a note to your CRM each time you do a performance review, followed by a note to your client along the lines of: “Here are a few things we did this month with respect to your account with us….”
• Keeping a finger on the pulse of client accounts and thresholds is an involved job. If you are able to pre-emptively reach out to address client concerns and questions, it merits communicating so to your clients so they can see that their money is safe in your hands. Maybe you have a routine of reaching out to clients when their account dips below a certain threshold. This builds trust while also communicating the value of having someone monitoring their accounts 24/7. 
• You are a conduit for curated insights and information. Chances are, your client doesn’t see how the sausage is made (monitoring performance, rebalancing, consolidating assets and information). This is where you can communicate value by making it simple and easy for clients to get the critical information they want. It might be through a digital dashboard or online client portal or even via a mobile app. Remind people that they have access to these tools. 

These are just a few of the myriad of ways that you add value in all of your day-to-day activities. Don’t assume that your clients are aware of all that you do for them — make it cut and dried for them. Finding clever and consistent ways to communicate that value is what we’ll cover next.

Be Clear About All Your Value Points, Early and Often

Once you’ve established and/or identified key differentiators, you need to communicate those value propositions to your clients — clearly and frequently. Even if you add value in all of the ways we described above, if you’re not communicating that, that value is lost on your clients.

Clarity in communicating how you’re unique means finding creative ways to ensure that each and every activity you do for clients is presented as a value point. Certain services you provide inherently communicate value to clients. When you distribute performance reports, for example, you’re “handing” the client something they can see with their own eyes — it’s tangible.

Communicating the intangibles, including the items we listed in the previous section, are essential to keeping clients happy and secure. Doing this well requires a little bit more of an effort on your part. To help you effectively communicate all the value you add for your clients, consider using tools like:

Automation – automating communication can streamline how you keep in touch with clients. Scheduled emails or texts show that you are thinking about your clients and require far less heavy lifting than manually sending communications. The benefit there is that you win back more of your time to dedicate to things that matter — like servicing clients and growing your business.

Mobile Apps – Mobile apps are all the rage, though not many in the wealth management space do it well. If you are one of those folks that do, use your app to help communicate how you deliver value to clients. If you’re using a third-party app that enables you to personalize communications and dashboards with your branding, it’s a great way to remind clients of all that you do and add a sophisticated, personalized touch to communications that your clients can trust.

Online Portals/Dashboards – These tools can be used to streamline information for your clients and answer their most pressing questions. Providing 24/7 access to account information and channels of communications builds trust and strengthens your relationship with clients.

Demonstrating and communicating value is not a set-it-and-forget it thing. You must evolve alongside your clients and the industry. The key is finding a streamlined way to do this that doesn’t take time away from actually advising. In our next piece, we’ll discuss some of the ways customers use Blueleaf to stand apart from the pack…efficiently. 

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The post 4 Big Ways Advisors Add Value – And How to Tell that to Your Clients first appeared on Blueleaf.