Jordan Alhadeff Quoted in PlanAdvisor Magazine: Practice Lessons Learned From the Pandemic

Virtual meetings and more personalized financial wellness programs are expected to continue.

This has been a challenging year, without a doubt, but even with all the downsides, retirement plan industry executives think retirement plan advisory practices have responded well to the COVID-19 pandemic.

In fact, many believe some of the business practices put in place this year will continue once the pandemic is behind us.

David Swallow, managing director, consulting relations at TIAA, says virtual meetings with plan sponsors and participants have become much more prevalent and are likely to continue once the pandemic is over. However, because the retirement plan industry is such a relationship-based industry, many advisers are looking forward to the opportunity to meet face-to-face with clients once again.

“It may be on a more limited basis,” Swallow says. “Instead of occurring four times a year, in-person meetings might be only twice a year, with two virtual meetings in the other quarters.”

Swallow says that with all the time advisers have saved on traveling to sponsor client and participant meetings, they may have been able to do more prospecting. He notes that many advisers have also leaned into discussions about in-plan lifetime income solutions.

“Advisers cannot just bringing a boilerplate solution to sponsors,” Swallow says. “It is about meeting them where they are and addressing new developments, like the lifetime income allowed under the SECURE [Setting Every Community Up for Retirement Enhancement] Act. This way, advisers have a better chance to land new clients, even in a year when travel is restricted.”

Jordan Alhadeff, founder and adviser at Murray St. Capital Advisors, says advisers have done well this year by focusing on the fundamental challenges their plan sponsors face—namely, uncertainty about the markets, the pandemic and the economy.

Alhadeff says he has made it a standing practice of his to reach out one-on-one to participants when the market is under stress.

“Be it questions about the debt ceiling, a terrorist attack or COVID-19, it seems that every year, the market faces at least a short time of uncertainty,” he says. “When I see back-to-back days of a sea of red, I make an effort to clear my schedule and call clients and participants to set their minds at ease. I keep the conversation focused and short, so I can move on.”

Michael Roth, head of retirement at Tegra118, a financial technology platform, says the pandemic is weeding out advisers who have not been able to shine in virtual meetings. This year has also heightened the need for retirement plan advisers to help plan participants with more than just saving for retirement, he says. For example, many employers are interested in helping their workers build an emergency savings fund that can help them navigate potential short- and medium-term income disruptions. There is also broader interest in helping employees assess their overall financial wellness.

Roth says this has become so important during the past year that he thinks participants and sponsors will expect advisers to deliver personalized financial health solutions, even after the pandemic is over.

As published on https://www.planadviser.com/practice-lessons-learned-pandemic/ By Lee Barney

6 Tips to Finding the Best RIA Tuck-In Partner

You’ve spent decades building your book of business as a financial advisor in a broker-dealer. Or maybe you’ve been in a wirehouse or bank just long enough to know when the chips are down, the high percentage of revenue taken from you doesn’t amount to much loyalty. If you’re looking to remap your career in financial services, what’s your exit strategy?

For some, it’s becoming independent as a “registered investment advisor,” or an RIA. More lucrative, less restrictive, and delivering greater autonomy, the RIA is the antidote to traditional brokerage. While it’s possible to do this on your own, the regulatory and legal legwork are costly and time consuming. It can be the better part of a year before you can open your doors.

An increasingly appealing model is to “tuck in” with an existing RIA.

If you’ve spent time in the traditional broker-dealer, you realize the relationship has its perks. You may benefit from their name cachet, the desk in Class A office space, and an administrative team that uses the latest investment management software to seamlessly serve your clients. 

But now you’re asking, “Is that worth the 30% or 40% payout I’m getting?” 

The pandemic has made it clear that office space and support staff can be expensive and unnecessary. Empowered by a proven investment platform from a trusted investment house, your home office or executive suite might be all you need to successfully hang your shingle.

Why a Tuck-In

Tucking in with an RIA like Murray Street Capital Advisors serves the growing number of advisors seeking professional independence and autonomy not found in the traditional wirehouse or bank model. Transitioning in this way allows the advisor to focus on serving their book and their futures. 

No age or career station defines the ideal tuck-in candidate. Some are baby boomers decades into their careers and planning their end game. Millennials and Gen Xers who’ve known all along they wanted to go it alone maybe spent a few years in a brokerage building their book and reputation - and now it’s time to cut loose.

For these and other breakaway advisors, tucking in with an RIA could be the “soft landing” to independence you’ve sought. If you’re considering independence, what should you consider when evaluating an RIA partnership?

The custodial partner. Before I launched Murray Street, I conducted tireless due diligence into the leading custodial providers. Why did I choose Charles Schwab? Neither I nor my future tuck-in partners would sacrifice any independence, while we each would enjoy the company’s vast portfolio of investment vehicles and the latest technology solutions. The Schwab organization eases your breakaway and the Schwab name associated with your brand will provide your clients invaluable peace of mind.

National licensing and presence. Opening an independent RIA could cost $50,000 and six months or more for the legal, regulatory, due diligence, even creating your brand. Established RIAs bring national registration and licensure in the state where you do the bulk of your business - and those markets you see as growth opportunities.

Fee transparency. You’ve worked hard to build your book and assets under management. But compensation arrangements at banks and wirehouses can take up to 70% of your revenue from you. Though fee arrangements vary, tucking in to a model that covers all of your overhead can often double an Advisor’s take home pay, all while reducing the overall fees to your clients. More importantly, most independent options should be an open book. When exploring your RIA options, review the documentation for what fees you will owe to RIA. Most are wholly transparent - a flat fee with no upcharges and no minimums. Your clients demand transparency and so should you.

Trusted technology. A state-of-the-art technology platform should excel at helping advisors and their clients navigate their accounts. Integrated and user-friendly cloud-based document management applications and software means all records are retained, stored, and accessible from any connected device - with complete regulatory-compliant document management and reporting.

Retain your independence. At Murray Street, advisor agreements are a simple contract. You’re trading the corporate W-2 for the Form-1099 of an independent contractor. We provide the technology platform, insurance, licensing and registration, and regulatory compliance. Although you are tucking in to an established platform, you have the freedom to brand your firm independently and as your own. More importantly, you’re your own boss without layers of bureaucracy. Work as many - or few - hours as you like; no one will micromanage your performance or schedule.

A partner from the start. By tucking in with an RIA, you’ll lose the bloated administration. But you’ll gain counsel and mentorship from partners who’ve walked your path; something recruiters from other independent firms can’t provide. It starts with the vetting process, a low-pressure conversation where you see if the fit is right. Once on board, you can network with fellow advisors about the latest client solutions or career growth. 

Tucking in isn’t for everyone. Some advisors are better suited being an employee in an institutional setting. It’s comfortable and lends a level of perceived security. There’s nothing wrong with that. What’s more, successfully shedding that non-complete can be arduous and confrontational.

Yet, the personal and professional empowerment found with “independence” allows the advisor to more personally manage their client accounts - and achieve the autonomy and future they seek.

There’s nothing more liberating than saying to a client, “I’ve started my own firm. Join me.”