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Episode 6: More than robo: 'This was a complete practice makeover'

January 07, 2016 @ 4:33 pm

Runtime: 12:17

Adding a robo-platform has meant a total overhaul at Archer Investment Management. Three months after we first met them, Matt Archer and Nina O'Neal return to tell us about their progress. What can you learn from their journey?

The Renovation Room

Industry experts and executives offer strategies, tips and ideas on how practices can improve their business.

Frank Maselli

Frank Maselli

Founder of The Financial Lifeguard Academy and The Maselli Group

In answer to your question, I believe the biggest take-away lesson that came from Matt & Nina's experience is that nothing is as easy as it may first seem. What started out as a desire to add a simple robo platform to their practice turned into a near-complete re-structuring of their business and their team. Changing BDs was a massive step. Losing their key admin person with no warning and simultaneously moving another teammate into an advisory role is probably going to mean they have a year's worth of added challenges ahead of them. So this story is far from over.

As I mentioned in my earliest comment about this program, I sensed there were deeper disconnects on the team than they were aware of at the time. I suggested that they step back and ask themselves some core questions about their business before jumping into the robo world. As it turned out, the process of exploring the robo platform exposed many of those issues and it's forced them to deal with unplanned changes.

Other advisors who want to try this need only to heed Nina's advice. Look before you leap. I would only add that you need to be sure the foundation of your practice is strong and solid before you go adding on new services.

The best part of this whole show to me was the incredibly positive attitude that both Matt and Nina maintained throughout the journey. They learned a lot about themselves and their business and I feel like they are stronger and better positioned than they were when they started. I truly believe they will succeed and that they will look back on this episode in their lives as a very powerful and positive inflection point. They are thoughtful, caring, and enthusiastic professionals and their clients are lucky to have them.

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Vanessa Oligino

Vanessa Oligino

Director, Business Performance Solutions, TD Ameritrade Institutional

“It really is amazing to hear Matt and Nina review all that’s happened in the past three months. I don’t think either one of them could have predicted all of the twists and turns of their journey, but they have achieved what they set out to accomplish and more.

“One of the lessons learned is that when advisors are looking to integrate a robo solution in their practice, it’s all in the details. On the surface, it may seem like a simple technology you can plug in and get up and running. However, as evident with Archer, adding a robo service can be disruptive -- to your overall business model, to how you approach compliance, to the client experience and to your staff.

“A second important lesson is that once you get into implementation, it’s tempting to just give up in the face of mounting challenges. Yet if you really want to build a firm capable of achieving long-term sustainable growth, you have to continue to evolve and that takes work and overcoming unforeseen challenges.

“As advisors consider implementing a robo solution, I recommend they do their homework, talk to other RIAs who have already done it, take the opportunity to understand best practices and learn from their mistakes. Think through how this change may impact all aspects of your business including, people, technology and process. Be prepared for a few surprises and, above all, make sure you are truly committed to making the change.”

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Joseph V. Maugeri

Joseph V. Maugeri

Managing Director, Corporate Relations, CFP Board

I was glad to hear that Matt and Nina are coming around to the idea of segmentation as a necessary next step in their practice’s growth and evolution. They are thinking about it the right way by not using simple measures such as assets as the only way to segment their client base. Behavioral factors, client needs and complexity of their financial situation should all influence the decision of how to categorize clients.
They mentioned that they are seeking an acquisition which I found very curious and puzzling considering the experience they have been through over the last several months. It seems prudent to wait and focus their resources and time on fully executing their robo advisor strategy over the next year before seeking a merger partner. They don’t want to take on too much at this time, and making this transition successful over the next year will free up capacity to look at acquisitions in a better light.
Lastly, one area that needs more focus is the training and knowledge of the new hire. Having the right competencies will be critical for this new role and they need to think about the credibility this advisor must have to work with their client base. If they believe that this represents a new opportunity to deliver a deeper and more valuable level of financial planning to their client base, they need to make sure their staff is trained with the right certifications to deliver a strong message of professionalism and the high standards of advice that clients expect today.

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Kelly LaPalio

Kelly LaPalio

Vice President of National Accounts, FocusPoint Solutions

What should advisors have learned? Wow! First and foremost, I have to commend Matt and Nina. I’ve been working for 11+ years with my current company to help advisors transform their business models, and I am incredibly impressed with them this season for many reasons. Their story provides an excellent example of what you can accomplish when you are willing to 1) take a step back to determine where you want to go, then 2) hit the ground running, all the while 3) accepting there are going to be hurdles and obstacles—both expected and unanticipated—along the way.

One thing I think advisors will have learned from Matt and Nina’s experience this season is this: Change is never easy, but it is necessary if you truly want to take your business to the next level. Nina suggests to advisors interested in changing their business models that there’s going to be some short term hurt. However, you need to trust that you’ll experience some significant long term gain as a result of your decision to take proactive steps in a better direction.

Additionally, this season offers evidence that in order to set yourself up for serious future success—and build in the right systems to create capacity for growth, if growth is your goal—you’ve got to put energy into, as Matt says, staying ahead of the game. This involves educating yourself about the landscape, designing a serious, well-thought out plan, and then...once you’re in the middle of the plan’s implementation, keeping focused on the light at the end of the tunnel. It’s a given that throughout a transition like the one shown this season, there are going to be issues, snafus, hiccups, etc. Yet another thing advisors can learn from Matt and Nina’s experience shared here is that you can’t allow yourself to get stuck in the mechanics or minutiae.

Is this realistic for other advisors to accomplish? Absolutely, particularly when you have the right partners alongside you throughout your transition. Matt and Nina did a great deal of research and soul-searching as they developed their transition support team and big picture plan.

Over the years, we have worked with dozens of advisors to develop and implement their transition plans. The process can be daunting and it’s easy to get “stuck” along the way. In an effort to help advisors who are considering taking steps to improve or significantly change their situation and business model, we’ve shared some examples of advisor case studies on our website. As Matt and Nina demonstrate, with good coaching, planning, and serious commitment, a LOT can be accomplished within a three-month timeframe!

How can they do it? Ask for help—starting with other advisors and your custodian. By doing a bit of homework, you’ll start opening up a world of solution options that might be right for you. There are many advisors who have been through a transition to a new business model such as Matt’s and Nina’s. And sure, a change like this can be spurred on by the desire to utilize a robo, but advisors often make large, sweeping changes as a result of choosing to, for example: 1) make a broker/dealer or custodian change; 2) move some or all clients to slightly varying model portfolios (rather than customizing for every client which, with time and growth, becomes impossible at some point); 3) change CRM or other technology; 4) form their own RIA (with or without a broker/dealer relationship; or 5) to outsource one or more parts of their business.

Advisors often come across our firm or other consultants like us who can point them in the right direction depending on their goals. Many consultants who can be recommended to advisors offer expertise with no out of pocket expense to the advisor. If you’re considering a change to your business, start putting your feelers out—you might be surprised by all the resources available to you.

As Nina states at the end of this episode, don’t let ten years go by and then look back wishing you’d made a change a long time ago. If you know something would improve your business today, take steps to look into the feasibility of incorporating it or making changes today.

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Your Practice Partner

Valuable information and assets provided by Broadridge Financial Solutions, this season's sponsor of Practice Makeover.

Prosper as a Breakout Advisor

The principals of Archer Investment Management, based in Raleigh, NC, took notice when robo-advising achieved triple-digit growth over the past year. Now they're tackling the critical question that's on the mind of today's advisory firms: is robo-advising right for me?

Defining and driving success

Matt Archer and Nina O'Neal are excited. They clearly see robo-advising as a fit for their young, forward-thinking business. However, as we listen to this conversation, it's clear that some vital questions remain. Perhaps the most critical: “How will you define success—and what measurements will drive it?”

A framework for strategic thinking

It's estimated that as many as 18% of RIAs* are planning to add robo-advising services to their firms over the next two years, and this episode provides great perspective on why this should be viewed as much more than a simple go/no-go decision. It also outlines key strategic questions you'll want to ask whenever you're weighing any new service or technology.

Technology and Relationships: Finding the Right Balance

As a financial advisor, you're in the relationship business. Like Matt Archer and Nina O'Neal of Archer Investments, you've built a practice based on credibility, respect and trust.

Robo-advising and other services

In Episode Four, Archer Investment's Nina O'Neal and Matt Archer meet with technology expert Aaron Klein. He provides guidance on specific functions, parameters and tiers of service, and that prompts Nina to push back.

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