Profitably Expand Your Services to Lower Tier Market Segments with Your Own Proprietary RoboAdvisor Package
Of all the trends in the advisory business the past several years, the one garnering out-sized attention is the “Robo-Advisor” in which investors can get low-cost advice through packaged portfolios (most often selected through a risk-scoring questionnaire matched to a portfolio algorithm).
Through BSM’s Avenue Robo-4-Advisors package, you completely control the branding, content, portfolio structure, investment products, associated services, fees, and revenue.
Segment Your Market Profitably
Instead of ceding the low-end of your marketplace (i.e. those below your asset minimums) to pure-play Robo-Advisors, you can offer essentially the same service package but within your own business and advisory model. Your clients gain the benefit of your investment expertise and local presence while you turn a low-profit market into one with high margins that you own 100%.
Children or Friends of Existing Clients
You love referrals from clients, but it becomes awkward when a client’s children or friends don’t meet your asset minimums for your full service package (in order for you to offer your services profitably). With your own RoboAdvisor, you can offer these important relationships your investment program, but do so profitably. And, these low-asset relationships will grow in value over time (and certainly upon wealth transfers from mom and dad) and when this happens, they’re already clients.
Some investors, even those that meet your wealth minimums, are very fee sensitive yet want supplementary professional planning advice (this is indicated by Vanguard’s advisory service). Avenue allows you a highly cost effective investment service, but in combination with periodic (e.g. monthly; quarterly; annually) one-to-one oversight.
How Avenue Paves the Way to Increased Revenue and Profits
Think of Avenue as a utility that gives you all the functions of a RoboAdvisor, but through your own website, under your own brand, with 100% control, and your proprietary investment advice.
You gain this utility for just $6,000 per year. And, you also receive BSM’s entire planning, investment, portfolio, and rebalancing suite at no additional charge. (Similarly, if you license BSM’s suite, Avenue is included.)
In one step, you advance your firm in these four important ways:
- You expand your marketplace.
- Increase your revenues.
- Slash your planning, investment, and monitoring software costs.
- Increase your profits.
Putting Avenue Robo-4-Advisors Into Action
- You are given a unique link that is attached to a button you place on your website.
- BSM defines your Avenue Robo-4-Advisors to your brand/logo, color scheme, and imagery.
- You can use BSM’s standard client/investor questionnaire, edit it, or create one from scratch.
- Using your investment philosophy, you create as many models as you want with any mix of mutual funds, stocks, and/or ETFs (even separate accounts if the managers used support low minimums).
- You assign a score range to each model so it is automatically selected based on the client/investor’s answers.
- You set up one or more rebalancing Rule Sets, including tax-loss harvesting rules to add incremental return to each model across time.
- One Rule Set is attached to each portfolio model.
- A proposal/report cover page and page template are defined with your images, color scheme, and text.
- You can define one or more IPSs.
- One IPS is assigned to each model.
- You define the look and content of the proposed portfolio’s performance and risk analysis template.
- You do the same for the product performance and risk one-page summary templates associated with the products in each model.
- We assist you in setting up the connection to share the client, model, and product data with your custodian’s account opening process so it can be automated.
- You review the client dashboard that includes all the inputs for prospective clients in the process as well as those that have accepted the proposal; this includes a link so you can view the actual proposal produced.
The Client/Investor’s Experience
- The client/investor clicks on a button/link on your website that launches your proprietary Avenue Robo-4-Advisors.
- Each new client/investor completes a profile screen and the questionnaire.
- As the client/investor answers the questions, a score accumulates.
- The resulting score automatically selects the specified model.
- The proposal packaged is produced for the client/investor (as a .pdf).
- If the client/investor accepts the proposal, the profile information, selected model, and investment amount are passed to your trading system (BSM sets up the links for you so it can be done seamlessly).
- BSM’s rebalancing tool evaluates the models each day and, when the rules in the Rule Set are “true”, the model will rebalance automatically through your trading system.
- All accounts are maintained through your custodian; nothing changes for your team’s operations.
- Performance reporting and fee billing (you set and control the AUM fees) are done through your normal processes; there isn’t a separate system for you to manage or one outside your operational control.
Your planning, investment, and portfolio expertise adds value to any investor, but the delivery costs often lead to taking only those able to pay a full-service fee. Avenue Robo-4-Advisors provides a resource that tailors your expertise and fees to match the needs of different market segments. Clients in the high volume tiers receive your expertise at a comfortable fee-level, and packaging your expertise maintains your profit margin objectives.
For your low AUM clients served by your branded RoboAdvisor, you can offer supplementary client seminars, education sessions, and small-group meetings. These group sessions (either in-person or via electronic meetings) give your RoboAdvisor package a local market relationship component (unlike standard RoboAdvisor firms) while still providing you with significant operational leverage to keep your margins high.