Description
ADVISOR INSIGHTS | JANUARY 2016
5 WAYS TO
BOOST YOUR
PRODUCTIVITY
AS AN RIA
If you’ve read many RIA publications, you’ve probably noticed that “AUM” (assets under
management) steals the headlines. But would you rather have twice the AUM, or twice
the bottom line? It’s not just about getting more clients — it’s about becoming more
productive in order to make a bigger profit. If you continue to grow your client base,
but do nothing to streamline how you manage your business, you’re overlooking a huge
opportunity for growth. You’re working harder, when you could be working smarter.
WHAT’S KEEPING YOUR BOTTOM LINE FROM
GROWING FASTER THAN YOUR TOP LINE?
HERE ARE THE 5 THINGS WE SEE MOST OFTEN.
1
Inefficient Trading and
Portfolio Management
Are you trading one account at a time instead of
doing omnibus trading? If so, ask yourself why.
Is it a limitation of the technology platform you’re using? Because it’s a lot more efficient — from a cost and trade execution perspective — to consolidate many individual trades into one large trade. The right technology should also automatically allocate those trades back to the individual accounts when the trade is completed, which not only reduces work for you, but also helps with compliance and auditing. Another question you should ask yourself is whether your technology is forcing you to create a new account for every additional model. If so, you could save a lot of time and effort by switching to a platform that allows you to keep multiple models in a single account. Both of the above issues could be forcing you to hire extra staff when you don’t need to, making you less profitable.
They are also probably making it inefficient for you to manage small accounts, which could otherwise be a very profitable opportunity — not a problem. For more advice specifically on managing small accounts, please see our Advisor Insights report, Small Accounts, Big Opportunities. . 5 WAYS TO BOOST YOUR PRODUCTIVITY AS AN RIA 2 66 % of high net worth clients under 40 expect to gain access to their accounts via a website and 54% expect to use a mobile device.2 3 Multiple Disparate Technology Systems How many different technology platforms and applications are you using, when you only need to use one? Are you building models in Excel and then rebalancing in another system? What about fee billing and performance reporting? If so, your true cost of ownership is a lot higher than it needs to be. Not only are you investing in multiple technologies when you don’t need to, but you’re also spending valuable time downloading data from one application and uploading it to another. This unnecessarily wastes your time and creates a high risk for mistakes along the way. Lack of Mobility Do you have the ability to access trading and client information from any device, anywhere? Can you work on the go, regardless of where you are? And can your clients do the same and access their information from any device? If you answered “no” to any of these questions, you’re falling behind — and it may be because your technology platform isn’t mobile. In today’s world, everyone is going mobile, including your competition and your clients. It’s crucial that you keep up with other advisors and satisfy the expectations of your increasingly tech-savvy audience.
A 2015 InvestmentNews study found that nearly 80% of advisors use a tablet and nearly 99% use a smartphone (Figure 1).1 The latest technologies now allow advisors to trade their portfolios, approve distributions, run reports and much more — all from their mobile devices. Does your technology platform? According to CapGemini, high net worth clients increasingly expect to have access to their accounts via not only a website, but also their mobile devices. It’s time to stop giving your clients printouts.
Give them an online, mobile portal where they can view their accounts. Figure 1: Percentage of advisors using mobile devices 20.5% 1.4% Yes Do you use a tablet? No Do you use a smartphone?1 Advisor Insights 2 . 5 WAYS TO BOOST YOUR PRODUCTIVITY AS AN RIA 4 Slow, mistake-prone onboarding paperwork Onboarding new clients and assets should be fast and easy — if you have the right technology. However, without integrated capabilities like a customer relationship management (CRM) platform, automatic proposal generation and eSignature, your account applications are much more mistake-prone, time-consuming and costly. Not-in-goodorder (NIGO) paperwork is not only a drain on your valuable time, but it also delays your ability to collect fees and increases the risk of losing prospective clients. On top of that, there are also potential audit issues and lawsuits you could be opening yourself up to. An integrated CRM platform enables you to manage clients and prospects electronically, as well as to automatically pull their information into digital documents (such as proposals) — reducing manual labor and the chance for error.
If you’re planning to have multiple strategies in a given account, automatic proposal generation can help you keep track of them — and if integrated with your portfolio management platform — automatically create these strategies when you open new accounts. eSignature technologies help you speed the signing process and allow you to better keep track of all your documents online. They also make sure all signature blocks are completed before allowing you to send your documents, further reducing the chance for NIGO.
And that means your accounts get funded faster and you can start making a profit sooner. For more advice on this topic, please see our Advisor Insights report, Paperwork Mistakes: 7 Ways to Stop Losing Money on NIGO. 5 Inefficient (or nonexistent) sales team management How do you quickly identify the right salespeople (reps) to join your firm and sell for you? Is your technology doing anything to help you locate and contact individuals who meet your criteria? If not, it should be. And if you already have a sales team, do you have a repeatable, measurable sales process? Are you tracking performance and identifying your top and bottom performers? If not, how are you improving your team? How do you know who is doing things right, and who needs more help? If you’re having to do manual calculations or ask for reports to get this information, there’s a better way: technologies that do this for you, automatically and instantly. Advisor Insights 3 . 5 WAYS TO BOOST YOUR PRODUCTIVITY AS AN RIA THE RIGHT TECHNOLOGY CAN BE AN ENABLER Almost all of the issues we just covered could be addressed by simply investing in the right technology. Today, technology is more than just a cost of doing business. It’s an enabler. It’s a differentiator. It’s a requirement.
It defines your ability to grow. providing a good client experience. According to a 2015 InvestmentNews study, 45% of advisory firms say productivity gains are their top consideration when deciding on a technology investment. That’s closely followed by 33% who cite expected benefits to their clients (Figure 2).1 Today, advisors overwhelmingly believe the right technology is integral to productivity, as well as to Figure 2: What is your top consideration when deciding whether to invest in new technology? 50% 40% 45.3% 33.2% 30% 20% 10% 6.5% 5.6% 4.7% 3.0% 0% t lity s on gain staff clien tabi t to focu vity t to profi nefi ucti e to ctivities nefi l d d be Prod d be ease ailab ent a ecte Incr ecte e av m Exp Exp e tim evelop Mor ss d ne busi cost cted xpe E Advisor Insights 4 .
5 WAYS TO BOOST YOUR PRODUCTIVITY AS AN RIA NEED MORE PROOF? We compared two major efficiency indicators between TCA advisors and the average advisor: the ratio of employees to AUM, and the ratio of employees to accounts. What we found is that the average advisor requires many more employees to manage the same AUM and number of accounts as a TCA advisor. Why? We believe it’s a matter of technology. For an RIA with approximately $50M in AUM: Average Advisor3 TCA Advisor Ratio of employees to AUM 1 : $20M 1 : $43M Ratio of employees to accounts 2 : 300 1 : 650 Just look at our technology ecosystem to see why. All these capabilities exist on our technology platform, Liberty — a single platform that’s available on any device, anytime, anywhere: • Account & Portfolio Management • Reporting • Document Vault • Trading & Rebalancing • Cash Demands • Investor Portal • Custody • CRM • Rep Prospecting & Analytics • Proposal Generation • Performance Reporting • Billing • eSignature Don’t hesitate to contact us with any questions about our platform and how you can take advantage of its capabilities to become more efficient and profitable. 1-800-955-0245 www.TrustAmerica.com/BoostProductivity SOURCES 1 InvestmentNews, 2015 Adviser Technology Study: Driving Efficiency, Profitability & Growth 2 CapGemini, US Wealth Report 2014 3 Laserfiche summary of InvestmentNews research, Technology Strategies of Top-Tier RIAs, 2013 About Trust Company of America Trust Company of America (TCA) is the only independent RIA custodian offering fully integrated real-time technology, consultative services and back office support exclusively to RIAs.
Since 1972, TCA has been a dedicated champion of RIAs, committed to personally helping them optimize their portfolios, streamline their business processes and achieve their full potential — all without competing for their clients. Visit trustamerica.com to learn more. © Trust Company of America (TCA). All Rights Reserved.
Member FDIC Insured – No Bank Guarantee – May Lose Value. Advisor Insights 5 .
Is it a limitation of the technology platform you’re using? Because it’s a lot more efficient — from a cost and trade execution perspective — to consolidate many individual trades into one large trade. The right technology should also automatically allocate those trades back to the individual accounts when the trade is completed, which not only reduces work for you, but also helps with compliance and auditing. Another question you should ask yourself is whether your technology is forcing you to create a new account for every additional model. If so, you could save a lot of time and effort by switching to a platform that allows you to keep multiple models in a single account. Both of the above issues could be forcing you to hire extra staff when you don’t need to, making you less profitable.
They are also probably making it inefficient for you to manage small accounts, which could otherwise be a very profitable opportunity — not a problem. For more advice specifically on managing small accounts, please see our Advisor Insights report, Small Accounts, Big Opportunities. . 5 WAYS TO BOOST YOUR PRODUCTIVITY AS AN RIA 2 66 % of high net worth clients under 40 expect to gain access to their accounts via a website and 54% expect to use a mobile device.2 3 Multiple Disparate Technology Systems How many different technology platforms and applications are you using, when you only need to use one? Are you building models in Excel and then rebalancing in another system? What about fee billing and performance reporting? If so, your true cost of ownership is a lot higher than it needs to be. Not only are you investing in multiple technologies when you don’t need to, but you’re also spending valuable time downloading data from one application and uploading it to another. This unnecessarily wastes your time and creates a high risk for mistakes along the way. Lack of Mobility Do you have the ability to access trading and client information from any device, anywhere? Can you work on the go, regardless of where you are? And can your clients do the same and access their information from any device? If you answered “no” to any of these questions, you’re falling behind — and it may be because your technology platform isn’t mobile. In today’s world, everyone is going mobile, including your competition and your clients. It’s crucial that you keep up with other advisors and satisfy the expectations of your increasingly tech-savvy audience.
A 2015 InvestmentNews study found that nearly 80% of advisors use a tablet and nearly 99% use a smartphone (Figure 1).1 The latest technologies now allow advisors to trade their portfolios, approve distributions, run reports and much more — all from their mobile devices. Does your technology platform? According to CapGemini, high net worth clients increasingly expect to have access to their accounts via not only a website, but also their mobile devices. It’s time to stop giving your clients printouts.
Give them an online, mobile portal where they can view their accounts. Figure 1: Percentage of advisors using mobile devices 20.5% 1.4% Yes Do you use a tablet? No Do you use a smartphone?1 Advisor Insights 2 . 5 WAYS TO BOOST YOUR PRODUCTIVITY AS AN RIA 4 Slow, mistake-prone onboarding paperwork Onboarding new clients and assets should be fast and easy — if you have the right technology. However, without integrated capabilities like a customer relationship management (CRM) platform, automatic proposal generation and eSignature, your account applications are much more mistake-prone, time-consuming and costly. Not-in-goodorder (NIGO) paperwork is not only a drain on your valuable time, but it also delays your ability to collect fees and increases the risk of losing prospective clients. On top of that, there are also potential audit issues and lawsuits you could be opening yourself up to. An integrated CRM platform enables you to manage clients and prospects electronically, as well as to automatically pull their information into digital documents (such as proposals) — reducing manual labor and the chance for error.
If you’re planning to have multiple strategies in a given account, automatic proposal generation can help you keep track of them — and if integrated with your portfolio management platform — automatically create these strategies when you open new accounts. eSignature technologies help you speed the signing process and allow you to better keep track of all your documents online. They also make sure all signature blocks are completed before allowing you to send your documents, further reducing the chance for NIGO.
And that means your accounts get funded faster and you can start making a profit sooner. For more advice on this topic, please see our Advisor Insights report, Paperwork Mistakes: 7 Ways to Stop Losing Money on NIGO. 5 Inefficient (or nonexistent) sales team management How do you quickly identify the right salespeople (reps) to join your firm and sell for you? Is your technology doing anything to help you locate and contact individuals who meet your criteria? If not, it should be. And if you already have a sales team, do you have a repeatable, measurable sales process? Are you tracking performance and identifying your top and bottom performers? If not, how are you improving your team? How do you know who is doing things right, and who needs more help? If you’re having to do manual calculations or ask for reports to get this information, there’s a better way: technologies that do this for you, automatically and instantly. Advisor Insights 3 . 5 WAYS TO BOOST YOUR PRODUCTIVITY AS AN RIA THE RIGHT TECHNOLOGY CAN BE AN ENABLER Almost all of the issues we just covered could be addressed by simply investing in the right technology. Today, technology is more than just a cost of doing business. It’s an enabler. It’s a differentiator. It’s a requirement.
It defines your ability to grow. providing a good client experience. According to a 2015 InvestmentNews study, 45% of advisory firms say productivity gains are their top consideration when deciding on a technology investment. That’s closely followed by 33% who cite expected benefits to their clients (Figure 2).1 Today, advisors overwhelmingly believe the right technology is integral to productivity, as well as to Figure 2: What is your top consideration when deciding whether to invest in new technology? 50% 40% 45.3% 33.2% 30% 20% 10% 6.5% 5.6% 4.7% 3.0% 0% t lity s on gain staff clien tabi t to focu vity t to profi nefi ucti e to ctivities nefi l d d be Prod d be ease ailab ent a ecte Incr ecte e av m Exp Exp e tim evelop Mor ss d ne busi cost cted xpe E Advisor Insights 4 .
5 WAYS TO BOOST YOUR PRODUCTIVITY AS AN RIA NEED MORE PROOF? We compared two major efficiency indicators between TCA advisors and the average advisor: the ratio of employees to AUM, and the ratio of employees to accounts. What we found is that the average advisor requires many more employees to manage the same AUM and number of accounts as a TCA advisor. Why? We believe it’s a matter of technology. For an RIA with approximately $50M in AUM: Average Advisor3 TCA Advisor Ratio of employees to AUM 1 : $20M 1 : $43M Ratio of employees to accounts 2 : 300 1 : 650 Just look at our technology ecosystem to see why. All these capabilities exist on our technology platform, Liberty — a single platform that’s available on any device, anytime, anywhere: • Account & Portfolio Management • Reporting • Document Vault • Trading & Rebalancing • Cash Demands • Investor Portal • Custody • CRM • Rep Prospecting & Analytics • Proposal Generation • Performance Reporting • Billing • eSignature Don’t hesitate to contact us with any questions about our platform and how you can take advantage of its capabilities to become more efficient and profitable. 1-800-955-0245 www.TrustAmerica.com/BoostProductivity SOURCES 1 InvestmentNews, 2015 Adviser Technology Study: Driving Efficiency, Profitability & Growth 2 CapGemini, US Wealth Report 2014 3 Laserfiche summary of InvestmentNews research, Technology Strategies of Top-Tier RIAs, 2013 About Trust Company of America Trust Company of America (TCA) is the only independent RIA custodian offering fully integrated real-time technology, consultative services and back office support exclusively to RIAs.
Since 1972, TCA has been a dedicated champion of RIAs, committed to personally helping them optimize their portfolios, streamline their business processes and achieve their full potential — all without competing for their clients. Visit trustamerica.com to learn more. © Trust Company of America (TCA). All Rights Reserved.
Member FDIC Insured – No Bank Guarantee – May Lose Value. Advisor Insights 5 .
