10 Takeaways from Envestnets Advisor Summit
May 7, 2013 12:25 PM
<b>By Charlie Paikert</b>
The tech outsourcer and platform services providers second annual conference in Chicago underscored the firms rising influence among independent advisors: more than 600 advisors attended, twice as many as last year, and attendance also doubled to 1,100.
Technology news, not surprisingly, dominated the conference, but practice management sessions also drew crowds, and Sallie Krawcheck, the high-profile former head of Merrill Lynch and Smith Barney, now working as an informal advisor to Envestnet, made headlines.
Here are 10 Key takeaways from the 2013 Envestnet Advisor Summit.
Technology news, not surprisingly, dominated the conference, but practice management sessions also drew crowds, and Sallie Krawcheck, the high-profile former head of Merrill Lynch and Smith Barney, now working as an informal advisor to Envestnet, made headlines.
Here are 10 Key takeaways from the 2013 Envestnet Advisor Summit.
<b>Leveraging Big Data </b>
Envestnet Intelligence, the firms’ new content and analytic offering for advisors is “our application of Big Data” and a “game-changer,” said Envestnet president Bill Crager. It features analytics tools, intellectual property, overlay services; guidance, news, analysis and customized reporting for multiple accounts.
The offering “will be transformative in the way the platform will interact with you,” Crager told advisors.
The offering “will be transformative in the way the platform will interact with you,” Crager told advisors.
<b> Macro Muscle </b>
Envestnet Intelligence will include access to third-party macro-analytics technology provider HiddenLevers, which offers “stress testing,” scenario modeling and risk profiles for portfolios.
According to tech guru Joel Bruckenstein, “Macro analytics are where rebalancing tools were in this industry 5 to 7 years ago.”
According to tech guru Joel Bruckenstein, “Macro analytics are where rebalancing tools were in this industry 5 to 7 years ago.”
<b>Time for a Makeover </b>
Advisors need to change their ways, said former Merrill Lynch and Smith Barney head Sallie Krawcheck. For starters, she worries that advisors are “becoming like the Republican Party: middle-aged and older white men talking to each other.” Also on her list: start using social media and change the way you work with women.
<b>Online Threat</b>
In his keynote address to the 600-plus advisors attending the company’s conference, chairman and CEO Jud Bergman called “the emergence of new business models that support online advice” one of the biggest competitive threats facing advisors.
<b>Net Flows Surge</b>
The 23,000 independent advisors using Envestnet services had net flows of $21.5 billion last year and are “nipping at the heels of the biggest firms on Wall St,” said Envestnet president Bill Crager.
<b>Tech Advantage</b>
According to Stuart DePina, group president, Envestnet/Tamarac, 43% of advisory firms who invest in new technology have productivity gains. RIAs who use integrated technology grow twice as fast as those who dont, have 20% more annual income and spend a third less time on operations.
<b>Economic Optimism</b>
Despite the gloomy headlines, a European monetary union breakup is “highly unlikely,” said Milton Ezrati, senior economist at Lord Abbet. And despite a slow economic recovery in the U.S. Ezrati sees “no sign” of another recession.
<b>Succession Planning Strategy</b>
When negotiating with another firm in a succession planning move, “the price isn’t what matters, the terms do,” said Bob Bilkie, president and CEO of Sigma Investment Counselors in Southfield, Mich.
Biggest potential risks of a merger when a founder wants to leave the business are “client defections, loss of key employees and general instability,” Bilkie added.
Biggest potential risks of a merger when a founder wants to leave the business are “client defections, loss of key employees and general instability,” Bilkie added.
<b>Secrets of Success</b>
Invest ahead of demand, said Mark Delfino, managing director at HoyleCohen in San Diego, speaking at Top Advisors Secrets of Success session. Fill key positions and invest in people, systems and trading as part of a strategic demand, not to meet demand, Delfino counseled.
What clients value: understanding and knowing clients; planning advice; competitive performance; teams and depth. What they dont: time it takes you to rebalance accounts; performance reports and newsletters, which are important for marketing, but only 20% of clients look at them. Daniel Dubay, managing principle, PPA Advisors.
What clients value: understanding and knowing clients; planning advice; competitive performance; teams and depth. What they dont: time it takes you to rebalance accounts; performance reports and newsletters, which are important for marketing, but only 20% of clients look at them. Daniel Dubay, managing principle, PPA Advisors.
<b>Engagement = Referrals</b>
Advisors typically think if loyal clients are satisfied, they will give referrals to show their appreciation and to help the advisor grow his or her business, says Julie Littlechild, founder and CEO of Advisor Impact. In fact, most clients give referrals because they have a friend with a financial problem and they want to help find a solution, Littlechild says.
Satisfaction with an advisor isn’t enough to drive a referral, she maintains. What are really needed are “engaged” clients who “place a high value on advice relative to the fees they pay and see the advisor as a proactive leader in their life.”
Satisfaction with an advisor isn’t enough to drive a referral, she maintains. What are really needed are “engaged” clients who “place a high value on advice relative to the fees they pay and see the advisor as a proactive leader in their life.”
