Taking into account market appreciation (and ignoring M&A of course), wealth management firms primarily grow their assets through existing advisors increasing the size of their books, and by recruiting more advisors. The mix and importance of adding clients and increasing share of wallet for existing advisors vs. recruiting new advisors varies from firm to firm… but the ability to be successful at either one, boils down to similar fundamentals. The same tools and capabilities that enable advisors to retain and grow wallet share with existing clients and attract new ones also create an attractive component to a firm’s recruiting story. The right technology tools offer time savings and efficiencies in advisors’ practices – to be redeployed to grow the business – and can help to provide a differentiated client experience and value proposition.
Vestmark recently commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) study to quantify the benefits of the VestmarkONE® platform with four of our wealth management clients. Through these clients, the study identified that the VestmarkONE technology has directly contributed to these firms’ business growth, citing that:
“Firms in general gained upwards of 10% AUM in their first year,” and attributed this growth largely to the ability to offer more sophisticated portfolio solutions across all program types, enhancing the client experience.
The study also notes, “Recruiting and retention was crucial for all interviewees’ organizations.” This is not surprising to me since I have had numerous conversations with Vestmark clients about how they use our technology in their recruiting process and my sales team has even participated in recruiting meetings for our clients from time to time to help demo and showcase the tech.
In broad support of these ideas, Cerulli’s 2021 US Broker Dealer Marketplace Report states:
“Technology (66%) and the range and quality of financial products and services available to offer their clients (56%) are the most frequently identified factors that would influence an advisor to choose to affiliate with a B/D.”
The VestmarkONE platform helps our clients showcase both.
Firms leveraging VestmarkONE can provide their advisors the direct benefit of the technology to manage their client portfolios while saving significant time on portfolio management and rebalancing activities – the Forrester study found up to 25% advisor time savings across participating clients. This time can be redeployed towards prospecting for new clients and/or providing additional services such as comprehensive planning and creating more meaningful client communication, all of which grow the advisors’ and the firm’s revenue.
In addition to enabling tax sensitive transition management, ongoing tax management and personalization of preferences based on client’s values, VestmarkONE also allows firms to leverage direct indexing, along with the use of sophisticated third-party fixed income and muni SMA managers, options strategies, and other sophisticated portfolio solutions at scale. These solutions are typically offered through a combination of centrally traded offerings such as UMA programs and advisor-managed “Rep-as-PM” programs, and can be accomplished in a single consolidated offering if a firm chooses that direction. The study cited these factors as some of the key drivers for the clients’ reported AUM growth:
“With centralized data and features, such as tax efficiency and guardrails on VestmarkONE, it was not only simpler to manage, but also afforded retail wealth managers the ability to be more prescriptive in their risk management and management of investment objectives across program types including advisor managed”
Some of the client quotes Forrester captured in the study demonstrate these firms’ experiences first-hand:
“We’ve grown this line of our business with a lot of credit to Vestmark from a $20 billion to $70 billion dollar business in the last eight years.”
– Head of advisory
“Recruiting is a big part of our growth. We’ve been very successful in that for the last several years and Vestmark has been a big part of that ... It puts us on par with the larger firms that oftentimes have huge tech teams building their own platform.”
– Head of advisory
Let us show you how VestmarkONE helped the interviewed firms grow AUM, add clients and recruit advisors…download the full Forrester Consulting study today.
By Ananya Balaram, Chief Revenue Officer