The point of going to a conference is to pick up some tips and contacts that can help an attendee become more successful.
To help with that type of networking, TD Ameritrade Institutional offered a business consulting lounge in a high-traffic area for its conference. The over 3,000 attendees were encouraged to stop by at their leisure to learn industry trends and best practices. Topics included social media, client acquisition, professional development, human capital and risk management.
Jim Dario, managing director of product management and strategy at TD Ameritrade, said, “The purpose of our programs is to help advisors take action so they see real results.”
Dario and others cited five areas where they focuses their efforts:
1. Growth
George Tamer, managing director of strategic relationships at TD Ameritrade Institutional, noted that there is a lot of research on the next generation. And for good reason. There is going to be a huge wealth transfer. If organizations want to grow in the future, they need to look beyond the boomers.
Tamer said that the younger individuals and families are already a viable market, but are still overlooked by many advisors as they think the NextGen has no money. He shared stats that went against this conventional thinking.
According to Cerulli:
• There are over 2 million investors under the age of 50 with investable assets of more than $500,000.
• These investors have an average portfolio size of $1.6 million.
According to the Spectrem Group, only 4-7% of these younger investors work with registered investment advisors
To work with this underserved target market, advisors need to understand their differences. TD Ameritrade’s focus groups found it really depends what stage the NextGen client is in. Tamer suggested considering if they are newly married, having a baby, taking care of parents or starting a new business? Know which life stage they are in and advisors can understand their needs and win them as clients.
“Against popular belief, they don’t want to be reached all the time via social media and technology. They do want to have a personal relationship,” said Tamer.
2. Efficiency
The industry is figuring out that advisors, by being efficient, can accomplish so much more. TD Ameritrade had technology experts and advisors on panels helping to share tips in this area.
Dave Welty, managing director at Retirement Asset Management, also spoke about the NextGen. His team members, who are younger, have been entrenched in making technology decisions to lead the firm.
He suggested bringing on more interns. “We got to test drive them and they did the same,” said Welty. Then when things have clicked, they developed the interns to take on bigger roles within the organization. Because his firm now leans on these hires, he believes other firms can do the same.
“If you are struggling with any of this, we recommend you hire someone,” advised Welty. For his firm, they are now truly scalable and their net income has tripled because of technology.
“If you run under the old model of silos under one umbrella, your profitability is limited,” said Welty. With scale, everyone benefits, including the management, staff and even the clients.
3. Human Capital
A diverse group of associates can fuel growth for many reasons. One is that studies show that NextGen investors want to work with someone their own age. Tamer said, “They also want someone with experience. They want a young person as part of the team and want someone with the grey hair that has been through the ups and downs.”
When it comes to GenY employees, Tamer said, “They want to come to work and know they are making a difference in an organization. They want to have a voice.”
He believes older advisors are at fault for thinking the younger generation has a sense of entitlement and suspecting that they always want the CEO job.
“Gen Y is the most educated generation in the history of the world. They have been brought up having a very collaborate relationship with their parents. They want to have a career path. They do not want to be the VP tomorrow,” Tamer maintained.
Tom Nally, president of TD Ameritrade Institutional, in his keynote address, said, “Hiring junior advisors can be great for the bottom line and the future growth of the firm. You should have a staff that represents the diversity of your clients.”
Nally pointed out that junior advisors play a vital role, but that there are not enough young people in the industry. To help, his organization announced the RIA Intern Network, a program designed to help attract and develop the next generation of advisors.
4. Risk Management
Les Abromovitz, attorney and senior consultant at National Compliance Services, spoke about business continuity. Virtually all clients rely on their advisors, so it is important that proper preparations are made.
More regions find themselves at risk of a power outage, so potential problems like that should be in everyone’s plan. Abromovitz said, “Imagine what it’s like after a disaster.” Getting a contractor can be very expensive.
Think of the ‘what ifs’: What if the office is destroyed? What if the client information is not retrievable? What if employees cannot make it to work? What if there is widespread devastation? What if there is a pandemic and everyone in one office is sick?
Also ask: Who is in charge in an emergency? Is there a succession plan in case of a death or disability? Are vendors prepared for a disaster? What are the technology considerations? Does the firm have an alternative site far away that is not on the same power grid? Is an alternative Internet provider needed? Do you have accurate contact info for clients, vendors and regulators? How will clients be communicated to?
These are all things the business continuity plan should address.
Abromovitz said the plan should also list the responsibilities of those that are testing the plan and keep records of those tests. He mentioned regulators have given deficiency letters for those that have failed to document the test, so any time something is changed for the better, document it. Consider doing this at least once a year. Conduct training sessions so employees know their roles in the event of a disaster.
“When employees sign the code of ethics, perhaps have them sign the business continuity plan and note they do understand it,” recommended Abromovitz.
Business continuity is an adivosr’s fiduciary duty. When it comes to a disaster, it is not the clients’ responsibility. And, even if the disaster is not the fault of advisors, it is their responsibility to properly prepare for it.
5. Client Experience
Clients are now expecting information 24/7. This is especially true for the NextGen that will utilize technology more than the baby boomers have in the past, said Dario. He advised, “Make information available on different topics that are pertinent.”
“Nothing that is going to replace trust in an advisor’s relationship with their client,” said Dario. However, advisors can use technology to demonstrate their leadership. For example, posting videos allows clients and prospects to not only learn, but to also get to know the person and organization.
Dario also recommends offering a scheduling service online and using video conferencing technology. By letting clients set up an appointment online, and then do a video chat with the advisor, they are benefiting from open access and being able to have meetings from anywhere.
This is an advisor trend TD Ameritrade Institutional is just starting to see get traction. Dario believes advisors are learning from their robo-advisor competition.
Mike Byrnes is a national speaker and owner of Byrnes Consulting, LLC. His firm provides consulting services to help advisors become even more successful. Need help with business planning, marketing strategy, business development, client service and management effectiveness? Read more at ByrnesConsulting.com and follow @ByrnesConsultin.