article

The Big Profit Squeeze All Advisors Face

As the industry looks ahead to 2017, many executives are concerned about profit margins. The cost of complying with new Department of Labor regulations adds to the inexorable upward march of costs, while new competition from digital advisors (yes, we’re talking about robos) has advisors and service providers worried about fees. Costs up, revenues static or down — it’s your classic margin squeeze, which causes small firms to suffer and medium to large firms to band together in search of scale.

 

Read full article:
The Big Profit Squeeze All Advisors Face
By Matt Lynch, Managing Partner, Strategy & Resources, LLC., November 21, 2016

 

Investment Advisor -December 2016 Issue

Investment Advisor cover story
December 2016 Issue

 

 

‘Life coaching’ Sets Advisers Apart From Robo-competitors

Matt Lynch, managing principal of Strategy & Resources, LLC, a financial services consulting firm in Dayton, Ohio, said it is a good time for advisers to highlight their caring sides.

Investments and financial planning can be automated, he said. “But the ability to show empathy, and to give clients confidence to stay invested and make good decisions, that’s more of an art than a science.”

 

Read full article:
‘Life coaching’ Sets Advisers Apart From Robo-competitors
by Hillary Johnson, Reuters, March 20, 2016

 

logo - Reuters

Why Firms Pay for Services They Don’t Need

Nobody wants to get a bill for services they didn’t need or purchase. But that’s what’s happening – unwittingly – to advisors as the vendors that supply them expand their service offerings.

With recent regulatory activity, such as the pending DOL fiduciary standard, riling up compliance departments and shifting consumer preferences to lower-cost advice models, players in the advisor-to-client supply chain are feeling the squeeze. In response, advisor-service firms are expanding into non-core functions – expanding their value in an effort to capture a larger slice of the pie.

Many firms are incorporating these extra services, such as asset allocation and data aggregation, into their existing advisor offering. That’s all well and good – but, as a result, advisors could be paying for the same function twice, or even more times over, because they now exist within a bundled pricing model from separate third-party firms.

 

Read full article:
Why Firms Pay for Services They Don’t Need
By Matt Lynch, Managing Partner, Strategy & Resources, LLC., March 22, 2016

 

 

AdvisorPerspectives Logo

How to Avoid Chasing Squirrels With Technology

“When I walk into one these conferences, especially the exhibit halls… I find it overwhelming,” said Matt Lynch, the managing partner of Strategy & Resources. Although new technology can help a firm improve its operational efficiency, Lynch said it always leads to at least some buyer’s remorse.

“More often than not it’s a disruption to the business, at least in the [short] term,” Lynch said, adding that its not the tool’s fault, but the process of implementing change. “It disrupts the ongoing growth; creates friction among teams of employees and managers and senior folks in the firm.”

Lynch said he has data showing that despite an increased spending on technology, there isn’t much improvement in terms of margins. And this can devastate a smaller firm making a large investment in a new tech product.

 

Read full article:
How to Avoid Chasing Squirrels With Technology
By Ryan W. Neal, Weathmanagement.com, Feb. 10, 2016

 

logo - WeathManagement.com

The Pressure is Mounting for IBDs

What value will independent broker/dealers be able to offer their advisors in a post-Department of Labor fiduciary world?

Even without the regulatory changes, market realities such as different and increasing advisor and consumer expectations, as well as advancing technology—have forced IBDs to up their game, said Matt Lynch, managing partner of Strategy & Resources LLC.

“IBDs that simply maintain accounts, provide compliance, process trades, etc., are not adding sufficient value and are feeling the squeeze of margin compression more acutely,” Lynch said. For most IBDs, over 50 percent of their business is already fee-based, so that change has already been factored in to most successful IBD business models.

IBDs who are best positioned to weather the storm are those that can demonstrate they help advisors achieve their goals (profitably growing their practices), Lynch said.  “Those whose affiliation proposition is limited to fulfilling the regulatory requirement that a rep has to be registered with a broker-dealer…are likely facing extinction,” he added.

 

Read full article:
The Pressure is Mounting for IBDs
By Megan Leonhardt, Weathmanagement.com, Jan. 28, 2016

 

logo - WeathManagement.com