Best of the Week: How RIAs Stretch the Marketing Budget
Investment advisors often tend to be minimalists when it comes to marketing, typically spending between 2% and 4% of their budget on promotional efforts. But as much as business leaders rely on client referrals to grow their business, some advisors are getting more creative when it comes to planning and promoting events after two and a half long years of Covid. Efforts include presenting guests with “experiential” events like bourbon tastings or a cooking lesson from a well-known chef.
In other top-read wealth management articles this week:
The counselor duo head to Wells.
Wells Fargo
has seen plenty of successful advisers decamp for rival firms in recent years, but the powerhouse has just recruited a two-person team managing $580 million in assets from
JPMorgan Chase
it is
wealth management unit. Scott Seltzer and Christopher Defelice bring a list of high net worth clients they serve from offices in New York and Palm Beach, Florida.
The case is cancelled. Now what?
UBS
backed out of its planned $1.4 billion acquisition of robo-advisor Wealthfront. The wirehouse says it remains committed to expanding its digital offerings, but the collapse of the deal leaves observers wondering what its next steps will be. UBS has struggled in the past with robo-advice, most notably with the shutdown of SmartWealth. Wealthfront, meanwhile, remains one of the only major digital advisory platforms still independent in the United States.
Rise of single-stock ETFs. Fund company Direxion has expanded its lineup of single-stock ETFs, an increasingly popular tactic for gaining outsized exposure to an individual company. These rapidly proliferating funds offer bulls and bears the opportunity to make short-term bets on whether a particular stock will rise or fall. Direxion’s six new funds offer positions in Amazon, Google’s parent company
Alphabet
,
and
Microsoft
,
continue the trend of building ETFs around heavily traded large-cap stocks. However, single-stock ETFs tied to smaller, hipper companies like GameStop and AMC may soon follow.
Be social. Like it or not, rising generations – Gen Z and Gen Alpha – are increasingly relying on social media and other online media to seek out professional services, ingest the news and, yes, get financial advice. Our columnist says that successful companies are going to have to engage with their customers on social platforms. It offers a five-point plan for optimizing digital messaging, including establishing credibility and humanizing their brand.
No more problems with share classes. The Securities and Exchange Commission has settled a lawsuit with another registered investment adviser for overcharging clients through fees on certain classes of mutual fund shares when cheaper offers of the same funds were available. In the latest SEC action in a long-running crackdown on stock class abuse, Aventura Capital Management has agreed to pay nearly $1 million to settle allegations that it was charging fees excessive for mutual funds and money market funds.
Amid the effervescent growth of the RIA industry, many companies reactively invest in new talent or capabilities, only when they find that their bandwidth is exhausted. In this week’s Barron’s Advisor Q&A, Verdence Capital Advisors CEO Leo Kelly explains how he takes the opposite approach, adding capacity long before growth. It also explains why the company left the Hightower fold and identifies industry dynamics that can make it difficult to add new advisors.
Have a good week-end.
Email advisor.editors@barrons.com
