Buckingham’s Jeffrey Levine presented to an Audience of over 1000 advisors on Tuesday at Wealth Advisor’s TAMP Growth Summit delivering a warning, not about fee compression but margin compression.
It seems now, according to Levine that advisors are working harder for the same pay. He tells our group that clients want tax guidance not from their CPA, but from their advisors.
Besides tax advice, they know they are running out of money, but want advisors to come up with better solutions.
All of this comes with a price. Since clients are making money, and in most cases losing money on paper, their still paying advisors RIA fees – so naturally they expect services.
And where does this wind up? First, advisors will go broke if they deliver the services AND also deliver investment management at the same time. When the market was going up, advisors were happy, but now the dynamic has changed.
The first thing Levine recommends is to measure your TWC, that ‘time with the client.” TWC will tell you how much or how little time a client gets without extra pay.
We recommend, an app-based service called clockify.com that’s traditionally used to keep track of the contactor’s time, but in this use, case can be used to track your own time.
So, by default, there’s TWC and everything else. The everything else part is where Levine says changes are needed.
For most advisors not working with a TAMP or outsourced solution like an SMA strategist or model portfolio provider, you’ll wind up running out of gas. That’s what Jeff calls “margin compression”
The Wealth Advisor offers both resources: for comprehensive data on TAMPs go to TAMPS.COM or for model portfolio or SMA providers research data checkout MP.THEWEALTHADVISOR.COM
To learn more about what Jeff Levine talks about, try watching the 2022 TAMP Growth Summit, 1.5 HRS CE Credit is available. go HERE.
Jeff Levine is now with Buckingham Strategic Partners along with Michael Kitces. To learn more, go to BUCKINGHAM.TAMPS.COM
We enjoyed Bill Crager, CEO of Envestnet, Bill explained how the TAMP industry interest has transitioned from investment-based asset management to value-based proposition or in other words shifting focus from a product to portfolios and service.
“Advisors must find ways to connect their financial planning tools to the client’s portfolio. Crager also points out that proprietary asset management is not the way to go anymore, and advisors need to seek how to outsource their asset management for efficiency and effective financial planning solutions”
He added, that as the TAMP space evolves, advisors will need to shift to a “Turnkey all my money” mindset for clients.
Michael Kim, President AssetMark provided solutions for the constant changes the TAMP market and advisors will face. He strongly believes advisors need to be met at where they are and dictate the direction they want to go.
It is important to know and understand what the advisor’s journey is and how to best deliver the unique solutions that are part of their journey. As a TAMP service, financial planning is important and an obligation of the trusted advisor. Kim believes that augmenting the advisor can be accomplished by high-impact capabilities at scale infrastructures.
Michael also offered a glimpse of the Adhesion-AssetMark merger, what’s to come and how advisors will benefit.
Daniel Needham, President of Morningstar, Wealth Solutions told our audience about trends that are deemed durable. His team focused on finding what process or solution is going to allocate capabilities in the coming 10 years.
Their answer is to have advisors lead by managing more scale and adopting profitable practices. Advisors need less friction in their everyday process and instead need advantages of technology and automation to move forward with their client’s needs.
Having a seamless workflow and being able to customize workflows with the adoption of technology is the way to go. A digital experience that is easy and can be personalized at scale.
Evan Rapoport, Founder, and CEO of SMArtX believe in technology-supported solutions for advisors. He believes the best outcome for advisors involves “modern robust architecture behind TAMPs” and highlighting all-around service.
Evan stresses the vitality and importance of building new solutions for advisors and clients and not expanding on existing solutions as a long-term goal. The key is to standardize the TAMP process and infrastructure to build what is needed so the excess and unnecessary can be removed.
Ryan Beach CEO of Orion Advisors delivered the four-step profitable outcome for advisors with Prospect, Plan, Invest and Achieve. The goal is to reach a multi-touch client experience with customized reporting and automated operations.
Orion focuses on helping advisors deliver value by accessing a full suite of integrated tools and powerful data designed to help advisors outpace the competition. With Orion’s Advisor portal, advisors collect all the data, workflows, and resources they will need in one integrated and simplified view.
Bob Herrman CEO of EQIS Capital Management paints a realistic picture of needed a strong support system. Bob strongly recommends advisors make better decisions and focus on the value of an operational structure that can meet the needs of the advisor and client.
The first step is to identify all the ways time is wasted on tasks that may be outsourced and find the best partner with a TAMP.
Advisors have moved away from the bureaucracy to be independent and to be seen as successful private labels. The best way for an advisor to make their business easier and more effective is to put the focus on being in front of the client and outsourcing the rest.
Craig Iskowitz CEO and Strategist consultant for EZRA defines TAMPs into two market spaces: 1. The traditional TAMP Fiduciary Outsourcing Tech Platform and 2. TAMPs that Own their technology platforms. He indicates that there is no one way to sell but multiple factors that dictate success: 1. Managed architecture by allowing advisors to manage ALL types of portfolios on a single platform, 2. Partnering with custodians who capture breakaways, 3. Solid marketing that showcases the knowledge an advisor can provide, 4. A proprietary product that meets the client’s needs and 5. providing unparallel service every time.
Aroosa Raheem contributed to this story.
