Best estate planning bolt-ons for new RIAs

Going RIA is often compared to being in a candy shop. With so much candy – or tools - to choose from, it can be overwhelming to narrow down the best flavors.

The same can be said when it comes to choosing a bolt-on provider. Luckily, there’s already quite a few who have made a name for themselves and are being actively chosen among advisors as their go-to estate planning, tax planning and insurance provider.

Chuck Failla, CEO and Founder of Sovereign Financial, attests that estate planning is at the forefront of bolt-ons, remarking on the great wealth transfer.

Vanilla, wealth.com, EncoreEstate and Trust & Will are the leading players when it comes to estate planning, as Failla points out. These four bolt-on providers are providing solutions for advisors to implement some type of estate planning, or at minimum, estate organizing, as he likes to call it.

“Estate organizing is just ‘Let's make sure all your beneficiary designations are correct. Do you have things in trust that should be in trust? Do you have a trust that's not funded yet?’ Things like this,” he says.

Ironically, Failla noted RIAs can go without having a bolt-on as part of their firms, as they can also manage them in-house. It just requires more work as a one-stop shop RIA.

“In our world, you have the estate plan, you have the CPA and you have the insurance professional. You can send [clients] out, or you could just bring them all in house. It's just more of an organizational structure more than anything else,” Failla said.

He added most advisors will still weave other ancillary services in. “It’s just a matter of are they going to do it full on as a bolt-on, as part of their organization? Or just do, what has been most traditional, a referral to an outside organization?”

Vanilla appears to have the edge, Failla highlighted, for not only basic estate planning, but also addressing needs of higher net worth individuals for their estate planning needs.

“We were really built for the advisor first and foremost,” says Jim Sinai, chief marketing officer at Vanilla. “We've assembled a team of seven in-house estate planning experts who build the product and help shape how our technology works, plus an extended team of former advisory leaders who help our advisors with their clients.”

What really makes Vanilla a differentiator in the estate planning space, Sinai noted, is helping both small and large firms scale out and offer estate planning to every one of their advisors' clients.

“One of the big problems that we solve for our larger customers is automating the presentation building, diagramming and rapport building that goes into serving existing clients,” Sinai said. “Thanks to advances in technology, they're able to actually scale out and start offering estate planning, reviews and advice to every single one of their clients.”

Failla highlighted advisors should have 2 or 3 good estate planning attorneys, CPAs and insurance brokers, “with a good working relationship” that they can refer clients to..

“These bolt-ons are generally more appropriate, in my opinion, for the mid range to larger shops,” Failla admits, commenting that firms with 10-12 advisors should consider a bolt-on.

“Once you get to that 20 to 50 advisor range, it makes a ton of sense to start bringing that stuff in-house because you have the demand for it.”