Once a list of platforms has been located, how should advisors choose one with which to work?

Choosing A Platform

As mentioned earlier, the most critical component in choosing a platform, according to Carstens, is to simply interview the managers who are on them. "Frank Russell, Brinker Capital, Lockwood, Morgan Stanley, Bear Stearns-many of them have the same managers." He says the managers have given him a lot of feedback over the years about which platforms performed the most thorough due diligence. "Most managers will be pretty upfront with you. I ask them, 'If you were putting money with one of these firms, who would you put your money with?'" The managers will also inform advisors of any problems platforms may be experiencing. For that reason alone, getting the managers' viewpoints can be invaluable. Carstens advises approaching the resulting platform candidates with a specific purpose in mind. "You should find a business partner in one of those and start a relationship," he says.

Coggins and Jones add that the breadth and depth of the platform staff's research, the options available to clients and the quality of the performance reporting and back-office support are first things to examine. Viewing a platform as a business partner involves interviewing the wholesalers or other platform representatives regarding the following:

Operations and general support-will there be a team dedicated to guide the advisor in setting up the business relationship?

What does their performance reporting cover, and what do the platform's statements look like? Statements that are easy for clients to understand will help in review sessions.

What services are provided? What about future services?

How many assets under management are required to garner the best responsiveness and support of the platform? How does that affect accessibility to managers by the advisor? By his or her clients?

Does the platform allow the advisor to privately label reports, recommendations, statements and commentary?

Scalability is also a big issue, according to Coggins. The platform he and Jones use, ADVISORport, was small when they first entered the separate account business. "But even then, the scale to help clients manage $500,000 or $500 million was immediately available. The scalability of the infrastructure is extremely important."

Product offerings are another important area. Platforms such as Wachovia are now providing independent advisors with additional client services such as lines of credit, mortgages and trust services. Access to multistrategy accounts with overlay tax management, nonpublic REITs and alternative investments such as hedge funds and private equity should also be included in the criteria. "Staying on the cutting edge is important-it's all about delivering the best solutions to clients," adds Coggins. Finding as many of these services all on one platform will ease reporting, allow as much information as possible on a single client statement and will reduce operating problems.