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Framing Your Value – Working with Outsourced Money Managers

Business Builders

At First Ascent, we partner with independent financial advisors to manage investment portfolios for their clients.

Increasingly, (and partially due to the attraction of our low, flat-fee structure), we are working with more advisors who have historically managed assets themselves or who are breaking away to form their own RIAs. They see the benefits to both their clients and their practices of partnering with a third-party asset manager, but are unsure of how to explain this new relationship to clients.

I’ve written on this topic before here, and will continue to share new ideas from advisors we work with who are experienced in framing their value and explaining their relationships with partner firms.

I spoke with one of our advisors recently who had a phrase I love. She calls herself a “financial advocate.” She outlines to clients that her value is guiding them through each step of the investment process and partnering with experts in key areas, such as portfolio management, to execute their plan.

That partnership, she says, is a strength of her practice and one that she highlights with clients. She explains her investment management process up front, which begins with performing a financial analysis. This leads to selecting an asset allocation mix and outlining a high-level investment policy. From there, she brings in one of her investment management partners whose philosophy aligns with their investment policy and who can implement their asset allocation strategy.

On an ongoing basis, she will monitor the investment partner to ensure that their strategy is fulfilling its expectations and is still a good fit for her client’s financial goals. Her job is to “be on watch” for her clients, to hold their investment management partner accountable, and communicate any changes or updates to her clients.

She also tells her clients why she manages money in this way through the story of working at a wirehouse broker in her past. At that wirehouse, she had access to support in investment research, portfolio construction, and trading. However, that support was often structured around proprietary products and baked-in higher fees.

Now that she is independent, she can partner with other independent experts that provide support and expertise in an open architecture environment. This lowers fees for clients, helps her keep a full team of experts to be laser focused on monitoring and trading client accounts, and gives her more freedom spend time working with and serving her clients.

Our goal at First Ascent is to support advisors so they can achieve better scale in their practice while reducing fees and staying focused on their clients. The more of their investments and operations advisors can institutionalize, they better client experience they can deliver. It starts with identifying and framing what your highest value is to your clients, and organizing your practice to support that calling.