Sponsored by Sanctuary Wealth Partners
The biggest companies have the best technology, right? While that may be the conventional wisdom in the advisory industry, it’s far from the truth. The fact is, the technology offered to advisors through large wirehouses often isn’t the best or the most sophisticated.
It is, however, fully integrated: Wirehouse technology typically offers advisors the ability to put all client information together in one place, making it easier to manage tasks such as compliance or client relationship management.
But that convenience typically comes at a price. “Even when advisors have the right software, they’re able to access only a stripped-down version that has lost much of the original functionality and benefits,” says Jim Dickson, president and founder of Sanctuary Wealth Partners, an independent division of Noyes Group, a full-service financial services firm. “It’s like driving a Chevette versus a Cadillac.”
What’s more, wirehouses often provide explicit direction to advisors about which tools may be used in specific circumstances.
Independents have their own (better) tools
Independent advisors don’t have to sacrifice functionality for the convenience of integration. Nor do they need to give up the freedom to use the right tool for the job. Fintech prices have come down in recent years, making integrated software more accessible for smaller independent firms. Advisors also have access to economies of scale through RIA networks. As an independent advisor, you really do have access to tools that meet—and in many cases exceed—those available to wirehouse advisors. These tools can address client needs in a variety of areas, including:
- Performance reporting: Not every client wants to leaf through a 28-page report to figure out how their portfolio is doing or whether they are still on track. “The data are the same, and the requirements are the same, but not every client is the same,” says Dickson. While wirehouse advisors must make do with whatever standard output the firm allows, independent advisors have more flexibility to create fully customized reports for clients based on what is important to them.
- Family office: A holistic approach to financial advising means you will inevitably encounter client situations where a solution requires unconventional services and resources. For example, Dickson recalls a colleague’s decision to help a client pay her bills—something her now-ill husband had long handled. Customized tools let the advisor create a transparent solution to tackling the client’s billing dilemma.
- Investment banking: Entrepreneurial clients with big dreams and a need for funding can access investment capital through independent advisors with access to the right tools. Because why should clients have to go elsewhere when you already understand their needs and situation better than anyone else, and can offer them access to what they need?
- Open architecture: Choosing funds from a pre-approved list of fund families might make portfolio construction more efficient, but what if a client has unique needs? “We truly have the freedom to go out and find an investment and tool that meets the needs of the client, and not just the needs of the firm,” says Dickson.
Going independent is about focusing first and foremost on the needs of your client. And when it comes to the technology at your disposal, there’s no reason a fiduciary needs to settle for anything but the best. “At a wirehouse, you just need to make the tools you have work as best you can,” says Dickson. “In the independent space, if you don’t have the right tool, it’s about being able to ask for help in finding one that is the best of class, being able to access it, and tailoring it to your clients’ needs.”