Asset managers have become consultants to financial advisors seeking help with business development and practice management in an effort to stand out in a crowded marketplace.
Paul Blease, director of the CEO Advisor Institute at OppenheimerFunds, compares his firm's efforts to build up its education program for advisors with the brokerage industry's own evolution.
"Thirty years ago brokers were sophisticated salespeople. That was the model. Today they are sophisticated holistic planners and advisors. We have to take our industry on the same journey or they become irrelevant," says Blease, who was previously an executive at Smith Barney where he oversaw advisor training.
At a recent conference in New York for wirehouse advisors, Blease presented on how those advisors could improve key aspects of their practices such as targeting niche audiences, developing deeper relationships with clients and networking in the right circles.
Jay Therrien, head of marketing at the CEO Advisor Institute, says that advisors want more than investment solutions from asset management firms. Oppenheimer's institute is in its third year, and the firm is continuing to build it out, Therrien says.
Therrien lays out what Oppenheimer currently offers: more than 100 advisor consultants, white papers, guidebooks complete with scripting for client conversations, a three-step diagnostic toolkit, video and audio podcasts, business coaches and over more than 100 video clips on their website offering tips on how to build a more dynamic practice. At a national level, Oppenheimer notes the audience for its keynote presentations include Merrill Lynch, Morgan Stanley Smith Barney, Wells Fargo, UBS, LPL, Raymond James, Ameriprise and Commonwealth.
"When you look at our industry, there are the value-add programs. Someone has a great calculator, or this firm had this great dignitary speak. But what does it do for your practice? We can actually put it together, as a connected suite of tools, insights and coaching to help you [the advisor] grow personally and professionally," says Therrien.
Industry insiders say that the practice isn't new, but that asset managers have recently stepped up their offerings because the market has become more competitive and because of advisors' need for more help in building up their practices. Their education programs can also sometimes complement existing training programs at wealth management firms.
One in five advisors look to wholesalers to provide ideas on how to better manage their practices, according to a recent survey by industry consulting firms kasina and Horsesmouth. When it came to new wholesalers, more than one in three advisors said they most appreciated tips on building their busineses.
As a result asset managers like Oppenheimer are putting more resources into developing programs along those lines, explains Jeff Strange, head of kasina Advisor Insights.
"Advisors are getting a lot of investment ideas, like macroeconomic content, from the home office. So as they get more of that they are looking for asset managers not so much for ideas of portfolio construction; they are looking instead for practice management ideas," says Strange.
While the programs may help asset managers attract more business, they need to remain educational in focus and not verge into a thinly veiled commercial, experts say. Howard Diamond, managing director of Diamond Consultants, a recruiting firm, warned the training should remain at "arm's length" from focusing on a mutual fund firm's product line.
"If this compliments what the firms are doing and doesn't compromise integrity, then providing more education to advisors is not a bad thing," says Diamond.
Strange adds, "It should help the advisors be better, it should help the broker dealer have more productive advisors and it should help the asset manager have a better relationship with the advisor."
Oppenheimer isn't the only firm stepping up its efforts in this arena. Hartford Funds is connecting with advisors in part through its three-year-old Masters of Advice Institute.
John Diehl, senior vice president of strategic markets at the firm, explains that the advisor's job today is half comprised of building portfolios and half psychology - thinking about how to better serve the ever more complex needs of their clients.
Hartford Funds also partners with the MIT Age Lab on client insights, particularly around retirement research, and consulting firm Red Rocks Strategic Partners on practice management tip. These partnerships, and the programs, thought leadership and seminars that emanate from them, are key to connecting with advisors and their firms. These efforts give Hartford Funds the opportunity to have a conversation with the advisor, Diehl explains.
"Yes, asset managers need to put assets on the books. That's what generates our revenues. But we found the best way to do it is not just help advisors understand how we manage assets, but how to manage their own practices," says Diehl, who has been with Hartford Funds for 26 years.
Like Oppenheimer, Hartford Funds sees its program as making the firm stand out in a crowded marketplace where busy advisors have many choices.
"At the core of the relationship is that we can fulfill excellent asset management. But that's just a core competency. So we have to do more than just that," Diehl says.
Blease says that his firm is bolstering its efforts to expand and improve its offerings, hiring three coaches to help train Oppenheimer's consultants to deliver and teach the content in the field to wirehouse and independent advisors.
"Like everything, it's an evolution for them. They are learning my content, literally right now, and then they are going to go out and help these guys with their presenting and delivering this content and connecting with advisors. It's a huge financial commitment," Blease says.
Asset management firms are also filling in a much needed role for the firms, he adds. Wirehouses cut training programs after the financial crisis even as mergers resulted in larger advisor forces. "They are outsourcing that capability. Who's going to pick up that slack? Our industry."