A Supplement to Accounting Today
LIVING WITH RISK SR•33
Mont Levy, chief executive officer of BAM Advisor
Services, a service provider for independent registered
investment advisor firms, believes that one important area of
focus on the horizon is the 401(k).
“The laws are now changing, which would demand
greater disclosure by providers to plan sponsors and
participants with regard to what fees are actually being
charged to them,” said Levy. “I think with this coming
transparency, the opportunity for the investment advisor,
the one with that fiduciary responsibility, to offer a program
where costs are much lower will be an area where advisors
who pursue it can really provide some excellent service to
their clients.”
BAM Advisor Services works with about 130 firms
nationwide, of which between 85 and 90 percent are
affiliated with CPA firms.
Downside
FROM PAGE 32
TOOLS FOR SUCCESS
For CPA firms that have branched out into the financial
planning arena, it isn’t simply about the product offerings,
whether it is stocks and bonds, mutual funds or life
insurance. Following successful strategies and leveraging the
tools necessary to educate themselves and their clients are
what help pave the path to success.
“We are not in the business of manufacturing products,
that’s not what we do. We leave that up to the insurance
providers, the mutual fund companies and other product
manufacturers. We are really in the advice business, so we
leverage technology and give advisors the tools that they need
to educate themselves and educate their clients, and then
they can choose what the right solutions are based on what
other people ‘manufacture,’” said Roger Ochs, president of
H.D. Vest Financial Services, which helps tax and accounting
practitioners integrate financial services into their practices.
Among the tools available through H.D. Vest is a
process called “ 8 Wealth Management Issues,” which is
designed to help advisors take a more comprehensive and
holistic approach with their clients. Some of the issues
include investment management, family risk management
and education planning.
“At the end of the day, it is really about providing
the client with the right advice so that they can meet their
overall goals, and we use that 8 Wealth Management Issues
approach to be much more comprehensive in the approach,”
said Ochs. “As you go through this process, it gives the CPA
a roadmap to have a more broad-based discussion with the
client about all their goals, dreams and desires.”
H.D. Vest, a non-bank subsidiary of Wells Fargo, also
developed the Vest Forward initiative, which is designed
to leverage its relationship with brokerage firm Wells
Fargo Advisors. “[Wells Fargo] has a very comprehensive
technology product offering that can allow us to provide
advisors with tools. One in particular is called Envision,
which is an investment management tool that not only helps
with the investment plan itself, but also reports back to
the client as to how they are doing relative to their overall
retirement planning goals. We just introduced this in January
of this year,” Ochs said.
Through the initiative, financial
advisors also have access to proprietary
stock and bond recommendations and a
larger bond inventory.
In recent years, 1st Global has
developed several solutions for clients,
such as its Sustainable Income Solutions.
This customized model is a way for
advisors to be able to talk with clients
about the unique risks in retirement, such
as a relationship risk due to a potential
divorce. An SIS team is dedicated to
working with advisors, running client
data through a financial planning system
and then presenting a plan for advisors
to implement. CPAs can then compare
the plan against their own planning and
develop a list of solutions to help clients
reach their financial goals in retirement.
Since its launch less than two years
ago, SIS has grown and today there
are marketing materials for advisors to
conduct client seminars on SIS and a host
of planning materials to help advisors in
conversations with clients.
With regard to strategies or advice,
Levy of BAM said, “We are in a very
low-rate environment and many investors
would like to get better yields on their
money. The problem is that investors
fail to equate demand for greater yield
with taking on greater risk, and in the
environment we are in, we think that the
most important thing practitioners can do
is to really help their clients think about
the levels of risk they’re taking. You can’t
control the markets. We are not going to
stop the reality that there is risk and we live
in a risky world. The most important thing
you can do is really focus on the amount of risk that not only
your client is willing to take but really the amount of risk
your client needs to take.”
PROVIDING CLIENT ASSISTANCE
In an effort to assist advisors with client communication
and advice, Raymond James provides various materials such
as white papers and “cheat sheets.” For example, there are
white papers that relate to the 2010 Tax Relief Act and its
implications, and there’s also a campaign “cheat sheet” to
help advisors manage fixed-income risks for clients.
When asked what makes CPAs an ideal representative
for personal financial planning, Pat Daxon, vice president of
the financial planning group at Raymond James, said, “CPAs
are already advice-driven.”
Raymond James Financial Services has a couple of
programs available for CPAs, including its Professional
Partners Program, which enables CPAs to form a strategic
alliance with a Raymond James Financial Services financial
advisor. Within the program, affiliates may become an
Investment Advisor Representative, whereby they would refer
clients to Raymond James Financial Services for financial
services on a fee basis, and would then be compensated based
on the advisory fees generated from the account. Or if the
CPA is a Raymond James Financial Services financial advisor
or a branch owner, they can access all of Raymond James’
products and services.
