For Financial Advisors and Other Professionals – A Note From BT

“We offer case design and portfolio modeling services to other financial advisors, to assist them with client cases that are more complicated than what they are used to dealing with.”

Back in the ‘90s when I was starting my practice, I wanted to be the guy who could help others design, build and operate better businesses.  Long-term that’s a goal that’s been achieved.  But it was slow at first, for a couple of reasons.  First, I was probably too young when I started: most middle-aged business men had a tough time believing that a guy half their age could tell them something worth hearing.  The ones who listened benefited, but I’m not ashamed to admit that back then, getting their attention was tough.

The other thing that got in the way though, was the stock market.  As the tech boom took hold and equity investing started looking like it was going to surpass baseball as the national pastime, people stopped caring how well their businesses were doing (I’m not making this up…) and started focusing more and more on their retirement accounts.

Now, everyone in business has to listen to what the marketplace is saying and move their game plan accordingly.  That’s especially true when you are first starting out.  The client market effectively told me that they would prefer to talk about financial assets instead of operating assets, so I changed my game plan to give them what they wanted.

Fortunately, as the result of my background and some personal research that I’d started years before, I was able to converse about financial assets just as well as operating (candidly, maybe better.  I didn’t have nearly as much operational experience back then as I do now.).  So I expanded my practice by working out a joint venture arrangement with a local firm, and before it was all said and done ended up as a Principal (NASD Series 24) with a national broker/dealer.

I had two main duties for the b/d.  First, I supervised all of the registered representatives that worked out of the local office, to make sure that they were in compliance with reporting requirements, sales and advertising practices, correspondence regulations, and so forth.  Having been an auditor, this part of the job was a snap.  The other thing that I did, which was a lot more interesting, was case design.

When one of my reps had the opportunity to present to someone that had a complicated financial picture (e.g. someone who owned a business, had a high income, or who had just saved a lot over the years), I would go to the meeting with them.  Afterward, having collected all of the pertinent information, I would be the one to figure out what investment strategies and products seemed to best fit their needs and goals.  Essentially, I was the architect.

It worked great, and I helped my guys land a lot of work that they probably would not have been able to get without my design input (which worked well for me too, since I got compensated based on what my team earned).

Well, that was a long time ago, and we don’t operate in that world anymore (we gave up all broker/dealer ties many years ago, and no longer have anything to do with the sale of securities).  But we’re still very much in the Applied Finance business.  The principles of finance haven’t changed, and given the recent condition of the economy and the markets, if anything, good design is even more important now than it was back then.

The function that I served for those other reps gave them the opportunity to go after and land prospects that they wouldn’t have otherwise been able to turn into clients.  As I’m sure you know, those types of prospects are highly sought by others in the industry, and if you are going to turn them into clients, you have to have the analytical firepower to design a case that meets their needs and stands out from the work of others.  They may agree to meet with you because they like you, but they aren’t going to move their money unless you can deliver the goods.

As you know, the bulk of the training that most mutual fund and insurance salesmen get doesn’t have much to do with financial analysis and good planning.  Most of it is geared toward how to sell the financial products themselves.  That’s a disadvantage to them, as well as the people who seek them out for financial advice.  But it’s a disadvantage you can use in your favor, and do a better job for the investing public at the same time:

Having someone in your corner who has performed in those situations ( not to mention worked on audits of Fortune 500 companies and directly managed money for institutional investors), gives you a big advantage when you get ready to try to capitalize on those opportunities.

That’s why we offer case design and portfolio modeling services to other financial advisors, to assist them with client cases that are more complicated than what they are used to dealing with.

These arrangements are necessarily on an individual basis.  There’s really no way to try to anticipate all the possible levels of need that another professional might run into, and over the years I’ve learned to not even try.  If you feel like this is a service you could benefit from, you just need to contact me so we can discuss the particulars and see if there’s something I can do that would be of benefit to you and your client.

That said, I can tell you that usually we do these on a straight consulting basis, so the cost is usually driven by the time involved.  As I already mentioned, we don’t sell securities anymore, so we aren’t looking for some big chunk of your commission (as you know, by law, since we aren’t licensed, we couldn’t accept it anyway).  I can also tell you that your client is your client.  The fact that we’re out of the b/d game benefits you at that level too.

Look, this is all about helping to analyze the facts and coming up with a good design for your client, and calling in additional technical help when faced with complexity is both smart financially (since it could help you take on clients with more complicated financial needs), and from the standpoint of demonstrating your commitment to following the suitability requirements (there’s the old compliance guy in me coming out…).

I know from experience that we can handle cases that are far too complicated for most financial product salesmen to be able to tackle. That’s something you can use to your advantage, and use to deliver something important to your clients at the same time.

If we can be of assistance to you, please contact me so we can discuss the situation.  Thanks.