"The innovative solutions we are discovering and vetting in the areas of technology, business strategy and niche asset management tools will help position advisors competitively on an ongoing basis." Hessel Pole, Invested Consultants
[The Institute for Innovation Development interview series seeks to learn from innovative business leaders, uncover innovation best practices, and discover how to apply these insights into the financial services industry.
We recently sat down with Steve Lamoreaux and Hessel Pole of Invested Consultants , a resourceful consultancy firm that has been building a rather unique platform and network of cutting-edge services and products for growth-oriented financial advisors.]
Bill Hortz: From your extensive experience, what do you see are the areas advisors need to focus on in this rapidly changing business environment?
Lamoreaux: There is a combination of forces, of strategic activities, that will combine to help propel an advisor to a much more competitive and engaging position to attract new clients in this new environment of rapidly accelerating business change: a focus on business strategy, embracing new technology, and employing under-the-radar niche investment managers and investment tools.
Pole: Our credo is one of the pursuit of democratizing institutional-quality investments for the average investor, welcoming fintech partnering opportunities that keep operational costs low and client engagement high, and helping advisors with needed business strategy support in increasingly important areas, including formulating exit strategies and building business innovation into their practices. We believe the traditional advisor role will always be of the upmost importance to preserve the integrity, education, protection and alpha-generating potential it affords investors. And we want to be there to bring unique business, tech, and investment solutions to those advisors.
Hortz: Can you go through a few examples of the kind of business solutions you bring to the table for advisors?
Lamoreaux: With the impending DOL regulation, compliance is an area of upmost concern for the smaller RIAs with whom we speak. Smaller shops easily get bogged down with this responsibility, and it distracts them from growing their clients’ wealth while also growing their own practice. One of our strategic technology partners addresses this dilemma: They offer a SaaS (software as a service) compliance solution that keeps potential regulatory issues from falling through the cracks. Their fully automated system seamlessly alerts and informs the compliance consultant, CCO, and all advisors about potential problems. It also automates a robust cataloging/filing of their activities. More importantly, it keeps advisors updated with the new rules and requirements while facilitating a shift towards those ends. In an ever-changing regulatory world, we strongly believe that our technology partner’s offering provides a great, cost-effective assist to the smaller advisor, as well as the many advisor platforms in existence attempting to centralize their back-office.
Pole: We also help identify niche investment strategies and tools that we believe can complement any advisor’s investment offerings and portfolio construction capabilities. Our platform provides a conduit voice between independent advisors to share their successes with each other in the form of proprietary strategies, research and other tools. As I mentioned, we try our best to look towards the future relationships between technology and the traditional advisor, and how together, they can bring value to the investor. We are excited at the potential we see in some partners and allies who are at the forefront of cutting-edge asset management. One specializes in active, artificial neural-network driven models. The other has developed a turnkey ‘asset manager’ engine that automates the entire asset management process – from company analysis, to portfolio construction, to trade execution – to employ countless strategies from a bottom-up, fundamental approach. Both these managers seek alpha with a lower beta, and the automation and operational efficiencies keep costs low enough to do that net of fees. Another example comes from one of our business strategy partners who offers a trading platform with lower costs, more efficient pricing and superior functionality.
Saving the most important for last: we are dedicated to identifying and working with the leading experts in contingency/succession planning and business innovation development. They are perhaps, areas in which the independent advisor is most under-prepared. We readily admit that there is no easy answer here, as each situation is unique. But, we are beginning to help our clients to navigate through these ‘ultimate solutions’ and trying our best to support them by making our business network available to companies and individuals alike.
Hortz: How will InVested Consultants support advisors through all these changes in the business?
Pole: There are new market and regulatory forces bearing down on the financial services arena. Our business is to explore new opportunities and find superior solutions for growth-oriented advisors. We have built InVested Consultants as an ever expanding platform of services and solutions for advisors, especially independent ones, who want to stay ahead of the curve. The innovative solutions we are discovering and vetting in the areas of technology, business strategy and niche asset management tools will help position advisors competitively on an ongoing basis, and allow them to focus on expanding their business, while providing sound financial guidance to their clients.
Hortz: How do you find and curate this unique mix of investment and business services for advisors?
Pole: We have always had the mindset and approach in business to find creative ways to integrate business solutions between less-than-obvious, yet complementary entities, to the mutual benefit of all. It’s just the way our brain works. We love to work with clients and strategic partner firms in creating business building alliances.
Hortz: You seem to have developed very strong and effective networking and partnership skills in putting together your unique offering. Can you share with us your networking philosophy and some techniques you use that have worked best for you?
Lamoreaux: We have both worked in and around the financial service industry for over 60 years, collectively. We have spoken with thousands of financial advisors over that time. We have never assumed that we had all of the answers -- there are plenty of folks out there who are smarter than we. The way we network is to actively ask questions, become thoroughly engaged, and listen attentively with an open mind.
Hortz: Any final thoughts or recommendations you have for advisors concerned about rising challenges and rapid change in the industry?
Pole: Details are more critical than ever today, but still highly manageable if you learn to leverage and use available strategic resources. Competent financial advisement is also more crucial than ever before -- we are facing the largest generational transfer of assets in history into an environment of tumultuous markets, greater regulations and global uncertainties. This is not a career for the faint of heart. Be bold and find the right strategic partners!
This article was previously published on Financial Advisor Magazine Online.
The Institute for Innovation Development is an educational and business development catalyst for growth-oriented financial advisors and financial services firms determined to lead their businesses in an operating environment of accelerating business and cultural change. We position our members with the necessary ongoing innovation resources and best practices to drive and facilitate their next-generation growth, differentiation and unique community engagement strategies. The institute was launched with the support and foresight of our founding sponsors - Pershing, Voya Financial, Ultimus Fund Solutions, Fidelity, and Charter Financial Publishing (publisher of Financial Advisor & Private Wealth magazines). For more information click here.