Updated Tech Stack - Open Look at How I Operate as an Independent Advisory Firm!
Samuel Lichtman
Financial Planner For Millennial Owners & Equity Compensated Employees!
Financial Advisors: If I told you you could decrease the red tape around your business, become your own boss, plan the way you know is right for your clients, have access to innovative 3rd party tools, funds and technology, be completely in control of your business, all while increasing your net revenue by up to 50% or more, would you do it?
When I first started as a financial advisor, it was 2016. Technology was everywhere except in the Canadian wealth management space. The finance industry was living in the Stone Age compared to many other industries, from paper applications to paper files to manual faxes. Technology was also very expensive and distrusted by older advisors and management.
Now, young advisors don't need the big-brand firm that distrusts technology in order to succeed in this industry. With these core components, you can earn a higher payout, have low overhead and create better client outcomes.
Core Components
Technical Competence
I will break this down into two components. The first one involves competence around your job. Are you a good financial advisor? Do you know how to solve client problems? Can you construct a financial plan with great detail and expertise? Are products the solution for everything, or do you find planning-based solutions that involve higher expertise but produce better client outcomes? If you don't know where to turn to find those solutions, here are three resources for you. These resources will make you a better advisor.
The second technical competence involves technology. Are you aware of technology in your industry? Do you look outside the box and outside of what your dealer offers to find solutions for clients? Are you studying other industries to find out how to make things more efficient for your practice? Are you connected with industry thought leaders on LinkedIn and Twitter? If not, here are a few resources I recommend. These advisors do comprehensive advisor tech demos and recommendations. They are genuinely fintech experts and will elevate your practice.
Entrepreneurial drive is the motor behind every successful advisor. I will assume that if you read this article, you already possess that. The desire to create your success, to implement things the way you know is right, and not have corporate overlords judge your every move. As a friend and recent bank survivor said, it's like rolling down the windows when you leave the city and taking a big deep breath - fresh air.
Open-mindedness. Ray Dalio talks about being radically open-minded while still being principled. That is the perfect way to approach change in this industry. You will hear why you shouldn't try something new and why your big firm isn't investing in tech. Maybe it's due to "safety," a convenient excuse not to innovate. Maybe it's due to compliance, maybe they worry about where data is stored, maybe... There is always a reason not to embrace change. You need to be open-minded; instead of embracing flavour-of-the-month mutual funds, why not attend a new technology demo every month? Instead of attending your corporate networking event where old ideas get reinforced, why not attend an industry event where new ideas and breakthroughs get discussed?
If you have those components, you can be successful on your own. Technology now allows you to do it easier and cheaper than ever before. Meaning young advisors can make more money while having a better service offering to their clients.
Let's break down the technology that an advisor needs to be successful.
Let's talk about the economics of an advisory practice. Many big firms pay out approximately 50 bps (manage $20 million, you get paid $100k)
On the other hand, many independent shops will pay based on revenue generation. If you generate $200k in revenue ($20 million with a 1% advisory fee), you will be on an 80% grid. So, you manage $20 million; you make $160k! Sounds great, right? Well, hold on; you have other costs when you are independent. Like the technology costs mentioned above. So how can you increase your net revenue and run the business how you want? These are all the tools I use to onboard, plan and deliver better outcomes to clients, including the cost.
If you are considering going independent please reach out and I can walk you through how our dealer Portfolio Strategies Corporation has a very high grid, low fees and provides amazing options to advisors looking to grow.
领英推荐
CRM: I use Wealthbox - an out-of-the-box solution for financial advisors. You can tag clients by simply typing @ in the general dashboard space; you can create workflows, create tasks, integrate meeting schedules, automatically upload emails etc. Wealthbox Cost: $150 per month
There are other great CRMs out there that we are currently reviewing and considering a switch to as they are more geared towards Canadian Advisory Firms, I would encourage you to check those out as well. Those include:
Cloven CRM, Super Advisor by Miguel Fernando, CFA and Stephanie O'Mahoney, CIM? and Salesforce.
Cloven specifically has open API meaning you can connect your apps like Google Calendar, Gmail, Precise FP, and more simply by using Zaps like Zapier to integrate data with them.
Cost for Zapier: $45 per month
Digital Onboarding: Precise FP and DocuSign. Precise FP is an out-of-the-box solution that allows you to create custom questionnaires, request documents securely, and more. You create these forms and then deliver them digitally and securely to your client. They can upload statements, fill in balances, and you can get an entire picture of your client before you even meet with them, all while doing away with paper. We all know Docusign. Every advisor needs this for digital onboarding. Precise FP: $145 per month per user; Docusign: $63 per month per user.
We are looking at CRMs that include data gathering tools, both Clov-n and SuperAdvisor offer those.
Website and SEO - Online presence is absolutely vital. Last year after I rebranded, I decided to invest in a professional custom made website you can check out here: www.mwadvisors.ca
This has increased conversions and google search hits with numerous prospective clients googling things like "millennial financial advisor" and our website being listed very high organically on Google.
So far, organically I have received 138k events like link clicks, blog reads etc. and 16k active website visits year to date. Well above where I was at last year.
I had Taylen Sather from Aryze Design build this out for me. Taylen charged $4,000 CAD upfront for the build out and $366 per month for updates monthly. I am not sure if his price has changed but reach out to him and tell him I sent you. You will get a good deal.
Webflow: $29 USD per Quarter.
Initial Cost: $4,000 CAD
Monthly Maintenance: $366 plus tax
Financial Planning Software - I use Conquest, a fantastic tool disrupting the planning industry. From its AI integration that removes manual tasks and improves advisor recommendations to its simple information onboarding, it is fast becoming the gold standard in financial planning. In the past, I have used Snap, NaviPlan and Equisoft. NaviPlan and Conquest are the top planning software priced at around $3k annually. Snap is cheaper at about $79 per month.
Investment Analysis Software - There are many paths to go on this. You can use Vanguards Portfolio Tool, which is easy to use, comprehensive and Free! You can use Morningstar Advisor Workstation or Premium, CapIntel, Koyfin and lots of amazing tech for portfolio construction and analysis. We use KoyFin.
Cost for Koyfin: $150 per month
Accounting and Bookkeeping - I use Quickbooks. Easy, out of the box, it integrates with my business accounts and costs about $86 monthly.
Workspace: Last year our team was using Microsoft for our Workspace, but found that it was clunky and Teams was not ideal to use for running virtual calls. So I was paying an additional fee for Zoom. We consolidated everything into G-Suite this year, saving over $150 per month. For a team of 5 people, G-suite costs $119 per month all in and includes Google Meet, Google Calendar, Google analytics, Gmail, and more.
Cost for G-Suite: $119 per month
My total annual cost of tech necessary to run my business in 2024 is about $13,200 (It's actually higher than that as we have a team of 5 but that would be my individual cost of running the business solo). On a $20 million book, assuming a 50% grid at a bank-style firm vs an 80% grid at an independent firm, your net revenue increases by around $46,800 annually.
Before, you probably needed about $30 -$50 million in managed assets from a financial perspective to make it on your own. You had administrative staff to hire, office space to rent etc. Now, you can do it with much lower assets as technology has taken a huge amount of work and automated it, and virtual tools have become routine, so you don't need the office space. You can also open up alternative revenue streams with permission from your dealer. You can charge for financial planning, create financial coaching programs, create a paid newsletter, etc.
We see more and more that big investment dealers and banks are in it for themselves. You can break out of that model, and technology can help you. I talk to at least two advisors every month about how to break away and start their own business. If you want to talk about it, reach out. I am happy to be a resource. After all, your clients deserve the best.
Moraine Wealth Advisory | Financial Planner | Retirement Expert | Associate Portfolio Manager Raintree Wealth Management | Comprehensive Advice & wealth management that goes beyond investments.
1 个月Great post. I use most of the same tech. The differences Microsoft, Sidesrawer and salesforce. Though Salesforce is certainly not the cheapest option I opted for it as I felt in the future the more you want to invest into integrating your tech you should have no issue with Salesforce.