A Value Proposition

For some time, financial advisors looking for ways to expand their relationships to the inheritors have approached us with their concerns. The solution became the Relay Race program. As with Wealth Mapping and RainMaker, Relay Race is based on considerable research. In this case, all three parties are involved in wealth transfer: the inheritors, the wealth creators—principally the parents of the inheritors—and the financial advisors. The result is probably the most effective way to structure relationships with the family to help them deal with matters that are often difficult. The byproduct of being so client-centered is that financial advisors are able, if they so choose, to maintain assets under management after the generational transfer of wealth.

One of the core aspects of the Relay Race program is to focus on the leverage point where the advisor has the greatest control—the wealth creators, or the parents. Also, there’s the realization that all inheritors are not equally interested in managing the inheritance when they receive it. Along the same lines, Relay Race does not concentrate on providing an investment education for the next generation. While doing so sounds like a good idea, our research shows the strategy is actually somewhat limited in its ability to create relationships with the inheritors and of negligible impact in maintaining the investable assets.

Prince: What do you see as the future for value-added wholesaling?

Van Bortel: The financial advisory industry, like so many other industries, is in transition. Just how it’s going to evolve over the long term is beyond anyone’s knowledge. However, what is clear is that for investment management firms to excel, they will likely need to maximize their value proposition for financial advisors by providing exceptional products and research-based, implementable solutions to help advisors get new clients, keep the ones they have and grow their businesses. To be completely clear, the most important thing investment management firms can do is to provide exceptional financial products, and value-added wholesaling helps those products to become visible in what can be a crowded market.

While at Van Kampen, Scott West, Gary DeMoss, other key personnel and I spearheaded the development of value-added wholesaling. Today, I suspect most investment management firms are looking to duplicate our accomplishments but often miss the mark in topic selection or execution. Value-added wholesaling has pretty much become the norm, but truly delivering the value component of that phrase has been our mission.

What does this mean for Invesco Consulting? We’re committing the resources in the form of people, money and expertise to stay at the cutting-edge so that the financial advisors who choose to work with us can best serve their clients while building very impressive practices. We’re extremely attentive to the needs and wants of financial advisors, resulting in programs such as Relay Race. Moreover, we’re always looking to improve on our successful programs, which is why so much effort is constantly put into revising and advancing programs that have demonstrably helped financial advisors build their practices and do a better job for their high-net-worth clients, such as Wealth Mapping and RainMaker.