Saturday, 22 of July of 2017

News

Taking Flight With UMAs

There’s been a lot of talk about Unified Managed Accounts (UMAs) lately.

For years these investment management platforms have been heralded as the second coming, yet when tasked with finding institutions soaring to success, we quickly conclude most are still grounded.  (Click here if you would like to learn UMA basics.)

From our perspective, there are a few reasons for this phenomenon.  Chief among them is that UMA is almost always viewed as a product, not a reengineering of the wealth management offering.

As many banks tiptoe into the use of UMA, they approach it as the big airlines might approach acquiring a new jet or adding a route, which results in roughly the same level of success those carriers experienced in the past few decades.

Adding a route or a jet doesn’t alter poor customer service, charging for bags, change fees or so many of the other nuisances infuriating today’s travelers.  I think most would agree there is not much contrast between United, US Airways, American or the other major carriers.  Yet, many travelers feel much differently when it comes to Southwest?   Read more »

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Integrating Trust & Brokerage (Part 5 ) Corporate Contribution

Song sung blue or just another love song?

In our last post, we outlined six key areas of focus for banks looking to gain competitive advantage by providing a consistently compelling, positive client experience through the integration of their wealth management business lines.

The first of those six areas is “Corporate Contribution”.

In our consulting work, we frequently interview individuals from multiple disciplines within financial institutions.  As you might expect, the wealth management business lines are key among these.

Without fail, someone within this group will sing the blues about being treated as a “red-headed stepchild “ – with verse after verse of how they don’t receive the resources and attention needed to thrive within the organization.

Ironically, we generally agree with that observation, however, typically not with the perspective from which it emanates.

Which comes first, the music or the lyrics? Read more »

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Integrating Trust and Brokerage (Part 4) – Helping Mr. Goldberg

Since the last post on this topic, I presented some solutions on “Integration” to the New York Bankers Association.  Once again, I was thrilled with the venue – Cooperstown New York, home of our national pastime.  Coming off of a presentation at Lambeau Field, I wasn’t anticipating being invited to step into the shadows of legends so soon, but was absolutely ecstatic about the opportunity of doing so.

Inspired by my surroundings, I opened the presentation with a bit of baseball trivia.  Since the event took place on September 23, I thought I would see if anything of import happened in baseball on that date.  I was pleased to see two significant events transpired in the early years of the sport.  It seems the first official baseball team, the New York Knickerbockers was formed in 1845,

"Did not get the memo about casual Fridays"

and, in 1908, one of the most renown, interesting and controversial games in the sport took place at the Polo Grounds, in NY. Read more »

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Integrating Trust and Brokerage (part 3) – Introducing Mr. Goldberg

Before we delve into the topic at hand (one which continues to be of growing concern to our bank clients), let me apologize for the infrequency of our posts as late.

This does not represent a lack of interest on our part, rather it emanates from an increased level of immediacy on the part of our clients.

In addition to our work helping a number of banks increase the efficiency and effectiveness of their wealth management businesses through integration, I was honored to recently address the Wisconsin Bankers Association on this very topic at a meeting held at Lambeau Field .  How cool is that – presenting at an utterly inspiring venue (literally the home of boyhood heroes, gridiron legends and past and current world champions).  

So, beside blogging about the importance of integrating these business lines, I have also had the privilege of travelling throughout the country researching, learning, educating, speaking and otherwise addressing the nuances, benefits and pitfalls of integration.

On one such trip to Florida, I struck up a conversation with the gentleman seated next to me on the plane.  He was headed to the sunshine state to meet his boyhood chums for their annual sojourn; playing stickball and then following their favorite major league baseball teams around the state during spring training.

Read more »

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Against the Odds Series / Gillian Lynne – Dancing Days are Here Again

Back in the 1930’s a not so unusual event took place at a school in England.  This elementary school sent a note home with one of its students, asking the parents to come to the school for a meeting.

It turns out their daughter was very fidgety and couldn’t concentrate in class.  She was becoming disruptive and homework assignments were late and missing.  I guess they would have called it ADHD today, but that hadn’t been invented (it wasn’t an available condition, so people weren’t aware they could have it).

So the parents, concerned that their young daughter had a learning disorder took an extraordinary step for the time and sought the help of a “specialist”.

The girl, her mother and the doctor gathered in a large oak paneled office.  The girl, sitting on her hands, listened for twenty minutes as the eight-year old student’s mother told the specialist all of the girl’s problems and why they thought she had a learning disorder.

Upon the conclusion of this litany, the doctor went and sat down next to the girl and said, “I’ve listened to all of the things your mother has told me and I need to speak to her privately”.    He said, “wait here, we wont be very long”, and as he headed for the door, he stopped at his desk and turned on the radio.

When they got out of the room, the specialist turned to the mother and said,  “lets just stand here and watch her”.

The minute they left the room, the girl got to her feet and started moving to the music.

The doctor turned to the mom and said, “You know, Gillian isn’t sick – she’s a dancer.”  “Take her to a dance school.”  The mother followed his instructions to the delight of the young girl.  For once in her life, the room was full of people like her.  People who couldn’t sit still, people who had to move to think.  They did tap, ballet, Jazz, contemporary dance and the rest, as they say is history.

Gillian Barbara Lynne became a successful soloist dancer at the age of twenty appearing at the Royal Opera House in Sleeping Beauty.  She met Andrew Lloyd Webber and choreographed some of the most successful theatrical productions in history, including Cats and Phantom of the Opera.  She is a multi millionaire who has brought joy to millions.

Somebody else might have put her on medication and told her to calm down.

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Against the Odds Series / Dr. Norman Borlaug – Over 1 Billion Served

While Wealth Biz Buzz is dedicated to the Wealth Management business for our Against the Odds series we are going outside that box by celebrating the lives of those unsung heroes who have made meaningful contributions to our world.

The impetus is simple; I am bored of hearing about Charlie Sheen, tuning-in to see what team Lebron picks, watching Lindsay Lohan parade into court or catching glimpses of Miley Cyrus and Michael Phelps taking bong hits.

I am simply in a phase were I choose not to waste any gray matter on such tripe; particularly, because I am utterly fascinated by the stories of people, with little renown or panache that have given so much to so many.

So it is within this context that we launch our series.  We urge you to share with us some of those people who you admire, who tirelessly helped others or triumphed in overcoming countless hurdles on their path to success.  There are some amazing stories out there and we want to hear them and to share them.  Drop a name, we’ll do the research and post it, or tell us the whole story.  Either way, let’s get the word out together, that we want to celebrate, respect, admire and support those who make meaningful contributions (and that’s not Lady GaGa channeling Madonna).

Dr. Norman E. Borlaug

With that prelude, it is befitting that we start our series with Dr. Norman Borlaug, a guy who literally saved hundreds of millions of lives. Read more »

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The Power of Process (part 10) – The Unified Managed Account (“UMA”)

“What’s in a name?”

“What is in a name?  That by which we would call an account, by any other name, smells like a process to thee”

A poor Shakespearean rip-off by all means, but I absolutely hate the name UMA.  It’s not that I have a better moniker, but for me UMA” has always been a misnomer.

Who actually gets to name stuff like this for an entire industry?  A question for another time, but for now, lets just say I don’t think the name accurately describes what is more of a process than an account.  So agrees Michael Stier, the President and CEO of Adhesion Wealth Advisor Solutions, a leading outsourced investment management firm, who recently told me, “for some time now in our sales & marketing collateral and dialog the term “UMA” has been relegated from the ‘headline’ to way back in the implementation details.”

Of course, “Reengineered investment management process using advanced technology and intellectual capital to provide scale, customization, efficient rebalancing and tax harvesting in a single account that combines individual securities, mutual funds and ETFs” doesn’t exactly roll off one’s tongue. Read more »

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The Power of Process – (part 9) – Open Architecture – To Be or Not To Be

Well, that is the question – or at least one of the major questions facing money managers today.

For the past few decades the debate over open, versus hybrid, or closed architecture has echoed through the halls of iconic institutions and single-shingle RIAs – through money center banks and community bank trust departments. Read more »

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Integration of Trust & Brokerage (part 2) – Perspectives & Biases

Einstein said, “We can’t solve problems using the same kind of thinking we used when we created them.”

 

When solving the challenges of integrating wealth management business units within financial institutions, it’s surprising to see so many banks try variations of the same old, same old.

In fairness, this Groundhog Day scenario replays itself because the payoffs of integration are so meaningful, while the task – Herculean.

Throw Private Banking and Insurance into the mix and watch the complexity meter spike into the red.  
Read more »

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Broker Protocol Revisited: An Industry Standard for Employment Transitions

In this post, industry expert and attorney Jim Eccleston provides insight and counsel on Broker Protocol.   This is invaluable information for any broker considering a move as well as for hiring managers.


In early 2009, I examined the Protocol for Broker Recruiting (the “Protocol”) and court opinions applying it to situations in which financial advisers had transitioned their employment from one financial services firm to another.  The Protocol initially was conceived as a “safe passage” set of procedures which allowed signatories to the Protocol to avoid litigation (TROs, other injunctive relief and damages) associated with the solicitation of clients and the taking of client information from one signatory firm to another signatory firm.

Moreover, at the time I also spoke of an “unintended consequence.”  That is, non-Protocol signatories, faced with litigation, began arguing that the Protocol effectively had become an industry standard for transitioning financial advisers.  Those non-signatories to the Protocol therefore contended that they should not be subject to TROs, other injunctive relief and damages even though they themselves might have signed employment agreements or other contractual agreements that expressly had contemplated such relief.  I concluded at that time that such a creative argument had experienced considerable (though certainly not universal) success in the courts. Read more »

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