Moorestown, NJ – Just as diversification is important to a portfolio, diversification in the types of advisors at a firm is equally important. While the industry is showing a decided shift to fee-based business or what is often considered “plain vanilla or packaged product offerings”, the fact is that commission business, investment banking, capital markets, and private placement business is not dead. Old School/transactional advisors skilled in these types of products and services have a place in both wire-house, boutique regional firms, and independent broker-dealers who recognize the strategic advantages that make these types of products and services an integral part of their firm’s success.
Taking a look at today’s financial climate, many regulators would argue that placing clients in a fee-based account when they do not frequently trade or re-allocate their funds could be considered “reverse churning” on the part of the advisor. In other words, some clients will best benefit financially from being charged commission versus an annual AUM-based fee.
Recognizing this, larger firms and boutique firms from Manhattan, Boston, and Philadelphia to Southern Florida, Dallas, and Los Angeles have created a portfolio of product solutions that isn’t one size fits all but takes fee-based and packaged offerings and layers it with complimentary and diversifying transactional business to provide the best individual results for clients.
These firms have embraced the old school advisor as an essential part of their team and have made it a point to understand the mentality of a seasoned advisor, integrating their skill set and offerings a breadth of transactional services such as investment banking, syndicate, and private company access. In some cases, new wealth management boutiques have taken this hybrid transactional and fee-based approach a step further and have continued to offer and support C shares, broader VA options, investment banking, equity option overlay strategies, and capital markets business.
The fact is that these diversified offerings, whether at a large firm or small boutique firm, are exceptionally attractive to certain client segments – particularly wealthier or higher net worth clients. Wealthier clients crave access to first-mover private company capital raises, laddered municipal bond strategies, and equity/debt syndicate flow. They will seek out firms with the ability to provide both dynamic – and highly lucrative – investment banking deal flow executed by advisors with the acumen and expertise to drive results.
Whether you are at a boutique-style or large firm, best positioning yourself in today’s financial services market requires taking a hard look at your company, its product and services, package, fee structure, and the types of clients you wish to attract. It just may be that going “old school” from time to time is the change in dynamic needed to take your practice to the next level of achievement, growth, and success.
For more information on Elite Consulting Partners, their complete suite of services, most recent moves, or strategic advice that can help you, visit www.eliteconsultingpartners.com.
