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Independent Broker-Dealers At The Forefront of Practice Management Innovation

Terry Mullen
Nov 7, 2017

Over the last couple of decades, we've witnessed technological changes on a massive scale. Technology has reshaped almost all areas of our lives from communications, entertainment, and social interactions to banking, vacation planning, learning, shopping, and, yes, investing. As new technologies transform and disrupt industries, businesses have a choice: adapt to the new reality or fall by the wayside.

Meanwhile, regulatory compliance is always a top priority, one that is starting to be addressed through regulatory technologies such as software that monitors financial transactions for signs of fraudulent behaviors. Data encryption, user management, and cybersecurity software are becoming increasingly important to protect data and restrict access. At the same time, businesses worry about how their broker-dealers use social media and BYOD (bring your own device) policies.

While some practices are content with business as usual and the wait-and-see approach, innovative broker-dealers are leveraging technology to help their financial advisors succeed in a marketplace being upended by digital disruption. Advisors who leverage such tools and the practice management offerings from the leaders at the forefront of practice management innovation are winning.

Here's an in-depth look at two worthy contenders, Advisor Group and Cetera, and their practice management innovations.

Advisor Group

Advisor Group is an independent broker dealer which recently rolled out a series of solutions focused on marketing, succession planning, and longevity -- three of the biggest challenges financial advisors typically face.

Overcoming Marketing Challenges with MyCMO

Marketing is a huge challenge for any type of business, and especially so for independent financial advisory practices that must juggle messaging with regulatory compliance and a host of marketing channels ranging from traditional newsletters to social media, live events and workshops, email, and beyond.

Advisor Group's MyCMO platform provides financial advisors with a one-stop destination for marketing their businesses. All marketing activities are contained here, along with a complete library of customizable original content developed by a team of marketing, technology, and compliance specialists.

MyCMO is a powerful tool that allows for both automation and the personal touch. For example, it can be programmed to send welcome messages, birthday greetings, social media connection requests, social media posts, and other messages periodically or according to a sequence. Thus, the advisor is able to touch base with clients on a regular basis, opening the door to deeper conversations and stronger relationships.

With a library of original content written by Advisor Group's experts to draw upon, advisors are better able to educate their clients without having to spend a lot of time researching and writing material -- something many never get around to doing due to the time commitment.

MyCMO is like having a dedicated marketing officer on staff, ready to develop, execute, and analyze customized marketing campaigns at a moment's notice.

Planning a Successful Exit with MySuccessionPlan.com

According to Advisor Group's CEO Jamie Price, a large percentage of financial advisors (38 percent) intend to retire in the next decade, yet about 80 percent do not have a formal succession plan. Meanwhile, younger advisors need to grow their practices, an often-daunting task when just starting out.

MySuccessionPlan.com aims to change those challenges. It's a community and technology wrapped into one, with an emphasis on helping financial advisors with business valuation and mergers and acquisitions. Whether an advisor is looking to retire or grow his or her business through mergers and acquisitions, MySuccessionPlan.com could play a pivotal role.

The platform helps advisors who are thinking about selling, acquiring, or merging a practice to find and connect with potential partners. Tools within MySuccessionPlan allow users to enter specific criteria, such as location, client assets under management, revenue, service offerings, etc., helping to ensure a suitable match. Whether looking to buy or sell a practice, it's possible to do so anonymously to safeguard your privacy.

Third party partners, including Truelytics, add value to MySuccessionPlan. For example, Live Oak Bank has partnered with MySuccessionPlan to provide assistance with financing while Truelytics.com's software is integrated into MySuccessionPlan.com to provide an online business valuation model. Any subscriber with an annual MySuccessionPlan.com membership gets one free eValuation powered by Truelytics, a $500 value. This eValuation provides a fair market estimate of the advisor's business.

Developing Investment Products and Services for the Long-term via Longevity Council

Underestimating longevity is a common problem. In fact, mortality tables still in use today haven't been updated in decades, yet men and women are living longer. As a result, their retirement savings must stretch further. In order to best serve our clients, accurate longevity estimates are crucial. The longevity issue is finally being addressed by a new Longevity Council whose purpose is to come up with new investment products and services to help investors contend with retirement and Social Security uncertainty, healthcare costs, and concerns about outliving their retirement savings. The Longevity Council will be made up of industry representatives.


Cetera Financial Institutions is another innovative organization whose technology is helping advisors improve their businesses. Last year, Cetera won the Bank Insurance & Securities Association's 2016 Technology Innovation Award for its RightBRIDGE and Pentameter platforms.

Cetera RightBRIDGE -- Geared toward Cetera Financial Institutions' bank and credit union advisors, RightBRIDGE is a business intelligence-powered suggestion engine.

Pentameter -- Developed for independent financial advisors, Pentameter blends practice management integrated consulting and centralized reporting. Pentameter focuses on five areas of a financial practice's success:

• Business development (marketing, wealth management, client acquisition, business acquisition)

• Operational efficiency (organizational design, performance management, employment basics, onboarding / hiring)

• Human capital (strategic planning and financial management)

• Business management (business processing, technology, client services)

• Succession planning (continuity planning, succession planning, advisor mergers and acquisitions)

Each user starts by going through an assessment that measures strengths in each of these five areas. In addition to receiving a score, Pentameter also provides you with a detailed summary of where you can improve.

Pentameter isn't just about assessments and scores. It also brings in the human factors of the equation: consultants. Each user is assigned a dedicated consultant who works with you to identify opportunities, set goals, build an action plan, execute that action plan, and track your progress. If you need to dig deeper, enhanced business consulting services are also available.

In addition to discovering your business's strengths and weaknesses and plotting out a plan for successfully reaching your goals, Pentameter offers a variety of tools to help you get there including a comprehensive library of resources such as templates, job descriptions, business valuation worksheets, and more.

Pentameter is both a system and a consulting process, focused on your ultimate success in business development, operational efficiency, human capital, business management, and succession planning.

If you're looking to build a strong, growing financial practice, focusing on these five areas is a recipe for success.

Why Look to Technology to Grow Your Practice?

Technology has disrupted many industries, reshaping them completely both from a supplier's and a consumer's point of view. For example, the music, video rentals, and book publishing industries are practically unrecognizable compared to what they once were. Consumer tastes changed, too; they liked the convenience of their new entertainment options, choosing to subscribe to streaming services or download digital products as opposed to buying physical ones. Some companies won while others withered away -- even the behemoths of the industry like Blockbuster Video.

The financial services industry hasn't been digitally disrupted in this way -- yet, but many practices are at risk. Our industry still values old-fashioned relationships, nurtured by phone calls, and while many of our clients do too, demographics are changing. Millennials won't necessarily answer the phone, even if they recognize your number. They'd rather communicate via social media or text. And, when they have questions, they won't necessarily call your office. They'd rather send an instant message (and expect an instant answer!) or post a general query to their friends on social media.

Thus, building relationships with your younger clients and prospects requires adapting your approach and utilizing other communications channels. Innovations such as MyCMO can help you do just that while also enabling you to leverage professionally written, compliant content tailored to your industry. Personalized automation across multiple channels means you're touching base at all the right times, in all the right places, without a huge expenditure of time or energy.

At the same time, innovations from both Advisor Group and Cetera solve the problem of succession planning, helping advisors to plan successful careers, grow their businesses through mergers and acquisitions, and then gracefully exit when the time comes -- and at fair market value.

Built into these platforms are various technologies and human consultants who work behind the scenes to address issues of importance to financial advisors. For example, compliance experts help to write the digital content found in MyCMO's content library as well as conduct compliance reviews when content has been updated.

Advisor Group and Cetera are innovative broker-dealers at the forefront of a digital revolution in the financial services industry. These broker-dealers are leveraging the digital exhaust that results from these systems to better optimize their enterprise. They understand that technology has the potential to disrupt the industry and are not content to be reactive. Their proactive approach recognizes technology's potential to uplift financial advisors, to help them identify opportunities, to assess their strengths and weaknesses, to improve business performance and efficiencies, to better connect with prospects and clients, and most importantly to succeed despite disruptions from other digital technologies.

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