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Investment Management Is Not a Differentiator

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You can pretend that your asset management and portfolio construction is a differentiator. But let’s face it: It’s not, said Brent Brodeski, CEO of Savant Capital.

Investing is a commodity, Brodeski said, during a panel session at TD Ameritrade Institutional’s national conference Thursday. Advisors’ investment management does not drive growth, he added. But rather, what does drive growth of an RIA firm is when advisors advise, get clients, manage relationships, convey their wisdom to newbies and mentor the next generation of advisors. They can delegate and outsource everything else.

Don’t sell yourself on performance, said Ron Carson, founder of $4 billion Carson Wealth Management Group. If that’s what you’re leading with, it’s a losing game.

Michael Stier, president and CEO of Adhesion Wealth Advisor Solutions, agrees that an advisor’s value goes above and beyond investment returns, especially since there are so many choices out there for people to invest themselves. He contends that an advisor’s value is in the other things they do to help clients accumulate wealth. This includes being an emotional coach for clients—keeping them from spending too much and jumping out of the markets at the wrong time, but also helping them stick to a savings plan and manage tax consequences.

Stier’s firm implements investment management for RIA firms, giving them more time for client-facing activities. According to Stier, most advisors spend 50 percent of their time on back-office functions, while high-end practices spend 75 percent of their time on client activities.

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