A Financial Advisor’s Guide to Creating Visual Content

Creating Visual Content

If you want to create an online presence that stands head and shoulders above your competitors, think about adding a little spark to your text by creating visual content.

Saying “visual content” is a fancy way of saying put some good-looking pictures and images on your site and in your text. Blog post images add interest and allow people to share your content on highly visual platforms like Pinterest. Images that you share on social media break up streams of text-and-link-only updates. And infographics can help you convey important information in a unique, engaging way.

Don’t shy away from creating your own photos and images! With a few simple tools, a little effort can go a long way.

How to Source Images for Visual Content

What do you do when you want to add a picture to something you’ve written, either on your site or as part of a PDF or Word document? If you answer is, “I run a Google image search,” it’s time to drop that habit now. As in, today.

Here’s the issue: if you use an image without permission, even one you found on Google by searching “free use,” “royalty free,” or something similar, you may violate copyright laws. You can be as well-intentioned as you want, but not everyone is so honest.

Remember that the site hosting the “royalty free” image could have taken it without permission in the first place.

Be very careful when sourcing images from Flickr Creative Commons for the same reason. A user on Flickr can easily take a photo from someone else, upload it to their account, and say it’s free-use — and you may not know the difference until the original creator of the image sends YOU a nasty email threatening legal action for stealing their photo.

In addition, there are lots of rules around Flickr’s Creative Commons. Not all photos come with the same licensing and you won’t be able to use every picture in the same way. You need to ensure you understand how you are and are not allowed to use a particular image before downloading a photo from ANY creative commons archive.

You can avoid angry emails from photographers who feel you infringed on their rights by purchasing photos you want to use, either from the creator or from stock image sites. Of course, this gets pricey and funds for your business will be better used elsewhere. That’s because plenty of free options for truly free use images do exist. Take advantage!

Here are some of our favorite sites to use when we need to source an image for some visual content:

You can download photos from these sources and use them however you’d like, even for commercial purposes. This is a much easier way to create visual content without paying a lot of money (although some sites encourage donations) or worrying about using a copyright-protected photo.

Resources to Create Visual Content

You don’t need to be a graphic designer to put together a nice-looking, polished image — so don’t let that stand in your way as an excuse to avoid using photos in your blog posts, social media updates, and emails! You have a range of options to help you create something clickable and interesting for your audience.

If you do want to get serious, you can use Photoshop, Illustrator, or InDesign to put together really professional images. Even Photoshop Elements, a limited (and much cheaper) version of Photoshop, can do just about everything you need to design something great.

But most advisors neither want to mess around with design nor have the time to do so. Here are more standard tools that make visual content super easy for anyone:

CanvaCanva is a free design tool that allows anyone to create beautiful, professional-quality images for use on blogs, social media, websites, and more. Note that this is more than just an editor — it really focuses on principles of graphic design and even features a Design School. Eric Roberge, an XYPN member, uses Canva to create engaging images for his Facebook page.

PicMonkeyPicMonkey is another free tool that allows you to do a lot with images that you can upload to the application. It’s more of an editor than a designer, and allows you to alter images in a variety of ways, add text and overlays, use filters, and more. XYPN member Michael Solari uses PicMonkey to create images that are consistent and clean for his blog posts.

Share As ImageShare As Image offers a straightfoward, no-frills way of putting together images for your online properties. PicMonkey and Canva are much more advanced, but this the fastest and easiest one to use of the resources listed. You can easily make a quality image in 5 minutes or less. Choose from images the app already offers, overlay some text, and upload a watermark (like your logo) that can appear on any image you make. XYPN currently uses Share As Image for blog post images.

Piktochart: Piktochart is a go-to tool for creating infographics. It comes with a range of templates you can start with, which saves time and effort. Piktochart has a bit of a learning curve and isn’t as simple as the other tools here. There’s a free version that you can use, but it’s limited. It’s a good option if you’re just getting started or only want to make an infographic or two. Paid accounts allow you to do more and create more custom designs. XYPN uses Piktochart to create inforgraphics.

The neat thing about all these tools: they work in your browser and require no software downloads. This is a major benefit for any virtual advisor.

Don’t discount outsourcing your visual content needs, too. A VA or other freelancer can help make basic images for you if you find that, even with these tools, the task is too time-consuming.

Using Images on Social Media

Not sure what to tweet or post? Keep in mind that some of the most engaging content you can share isn’t text. People love images! And of course, if you’re interested in expanding your presence on Pinterest at all, you need to get visual.

You can also use images to promote courses, ebooks, or other offerings to your audience. Sharing a quick snippet about something you want people to know about, like XYPN member Mary Beth Storjohann does for her Newlywed Money Bootcamp, is a much more effective way of getting people’s attention than constantly pushing plain-text links.

Best Practices for Utilizing SEO

If you’re using images on your site in blog posts, don’t forget about SEO considerations. Use these quick tips to optimize your visual content to help drive organic search traffic (assuming you’re using WordPress for your website and blog):

  • Include a keyword in your image title
  • Fill out the “alternative text” box on the image editor — use a phrase that’s similar to the title but not exact and includes your keyword
  • Give your photo an “image title attribute,” also found in the image editor.

Do More Than Text — Use Great Images!

Everyone can type up a snippet to share on their website and post it. Few advisors are making the effort to create visual content that appeals to potential clients. Get in the habit of using these simple, straightforward tools and start differentiating yourself from the other, plain-text-only financial planners out there.

Grow Your Business by Working with a Virtual Team

Virtual Teams for Financial Planners

Many new firm owners want to do what they can to bootstrap their business and minimize expenses. These same financial planners might also suffer from an entrepreneurial “superhero syndrome,” where they believe they can do everything involved in running a successful practice.

After all, wearing many hats is a money-saver in itself. The more you can do on your own, the less you need to pay someone else to handle that work for you.

But these two mentalities, when working together, can really backfire on financial advisors. Here’s the reality: you simply can’t do it all. At the very least, you can’t do it all and maintain a consistent, high level of quality across the range of tasks you try to complete.

When your firm starts to grow, you should foster that growth by devoting your time to what’s truly important to you: serving your clients and providing them with valuable financial planning.

That doesn’t mean you drop everything else. You still need to handle administrative, accounting, marketing, and other tasks. If you want to continue to grow your business, you need to start considering how you’ll effectively work with a virtual team.

Download your copy of The Virtual Advisor, our free ebook on running a fully virtual practice.

The Argument for Developing a Virtual Team

Many independent financial advisors do not like the idea of relinquishing control of any aspect of their firm to someone else. Who knows your business better than you, right?

The thing is, what you know better than anyone else is your profession (financial planning) and the mission of your business (how you uniquely serve other people who need your knowledge and expertise). There are other elements of your firm, however, that other people could help you manage and provide you with a better result than what you could have created on your own:

  • You probably don’t know how to build (and maintain) a website better than a website designer.
  • You probably don’t know how to write better than a professional freelance writer who specializes in creating financial content.
  • You probably don’t know the ins and outs of the tax codes like a CPA.
  • You probably don’t know how to share your message in a way that gets people to sit up and listen on social media better than an online marketing expert.
  • You probably don’t know how to create a good looking freemium better than a graphic designer.
  • You probably don’t know how to connect with influencers in the industry, book speaking gigs and podcast interviews, and land quotes in the media quite like a well-trained assistant.

Do you know how to do some of these things? Of course! Could you cobble something passable together for some of the other tasks that your business requires? Sure!

But the point is you cannot do everything, all the time, to a high standard of work.

You wouldn’t ask designers, writers, accountants, marketers, or administrative assistants to create a comprehensive financial plan for a client. And you shouldn’t ask a financial planner to code a website or write 10,000 words per week for various posts and articles.

You might still believe you can do everything, but there’s no getting around that you don’t have time to do all of this all on your own — while also providing great, quality service to your clients who deserve the bulk of your focus and energy.

That’s where a virtual team comes in. You can outsource appropriate tasks to the right people for those specific jobs.

As a result, you’ll have more time, focus, and energy to devote to working on growing your business instead of constantly being stuck working in the trenches of your firm. If you outsource the right way, you’ll free yourself to develop a bigger, more profitable financial planning practice.

Why “Outsourcing,” and Why Virtually?

Outsourcing in this context simply means hiring on an independent contractor or freelancer to take on tasks required to keep your business running smoothly and efficiently.

XYPN member Mary Beth Storjohann explains that, to her, outsourcing means “passing off the tasks that may not be the best use of my time.”

Daniel Wrenne, another XYPN advisor, elaborates on this idea. “[Outsourcing is] taking tasks we currently perform (or would like to perform and don’t have the time) and reassigning them to someone outside the firm that will complete these tasks for us in a manner that provides greater overall efficiency and therefore moves us toward our ultimate growth target faster.”

Wrenne also emphasizes the fact that financial planners are financial planners, and your attention should be on the people you serve. “My focus areas are working with clients and business planning,” he says. “These are the areas I enjoy working in and feel confident in my productivity. Everything else is fair game.”

In addition to using outsourcing in order to buy back valuable time, XYPN member Katie Brewer points out that hiring someone to help can also free firm owners from tasks they simply don’t enjoy. “Outsourcing for me is taking the parts of my business that I am not an expert at and don’t enjoy, and paying someone else to do them!” she says.

Outsourcing tasks doesn’t need to come with a lot of complication. You can hire part-time help in the form of independent contractors or freelancers; no need to hire employees. When you choose to make your team virtual — meaning part-time workers do not come in to your office and can work from anywhere — you get to choose the best talent available to you because location is not a limiting factor.

What a Virtual Team Can Help You Accomplish

If you’re ready to reclaim your time so you can focus running your business instead of getting bogged down in the day-to-day task list, you need to start outsourcing. But how do you determine which tasks to delegate to someone else?

“I keep a running list of things that I don’t particularly like to do and that someone else could be doing, and I revisit it every month to see if there is something from it that I can start outsourcing,” says Brewer. “Any time I have some extra income start coming in, I will usually start outsourcing one other aspect of my business.”

XYPN co-founder Alan Moore takes a similar approach. “I always ask myself, ‘do I need to be me to do this task?’ and if the answer is no, then I try to outsource it,” he explains. “I start with leveraging technology, like online scheduling, to eliminate the task, and will then outsource whatever tasks remain.”

For Moore, those specific tasks could be “investment management, financial plan writing, scheduling, marketing, social media and newsletter management, blog writing, etc. The list goes on and on!”

Wrenne adds to the list, saying that he looks at the intersection of what is easy to outsource and also inexpensive to outsource. “I typically start by outsourcing those tasks we are least confident in our feel very unproductive completing ourselves,” he adds. For Wrenne, This could include compliance, accounting, content creation, website management, creating marketing material, and administrative work.

XYPN member Sophia Bera takes a slightly different approach to determining where help is needed in her firm. “It’s more about finding people who are experts in these areas who’d like to add to my team rather than giving them tasks,” Bera explains. “[My accountant] is way faster at bookkeeping that I am, so why would I want to spend 10 hours a month doing that when I can pay her for 5 hours of her time and save myself 10 hours of dreaded bookkeeping? [My content manager] is a much better editor than I’ll ever be and she keeps my newsletters interesting! When you are bored of reading your own newsletter, hire a great writer to freshen it up!”

Bera notes that you can also hire someone part-time to help with financial planning, too. “I knew that my client base was growing and that I could use help…but I was also a long way from being able to hire someone full-time. I was able to hire a paraplanner for 3-8 hours per week on an as-needed basis. She’s now prepping for my client meetings, creating meeting agendas for check in meetings, and helps me analyze 401(k) investments and company benefits.”

Why You (Yes, You) Can Afford to Outsource

The argument for hiring part-time help and developing a virtual team to help with all aspects of your business might be compelling — but many financial advisors who maintain the “bootstrap it” mindset may find it difficult to justify taking on additional expenses.

But outsourcing your tasks provides you and your business with a tremendous amount of value, that may even help pay for itself if the effort from your freelancers and contractors helps you land new clients or sources of income. “[A virtual team] frees up my time so I’m able to focus on building relationships and marketing,” explains Storjohann.

Outsourcing may also provide a much more cost effective route for your business than any other option. “I paid less than $10,000 last year to have 3 experts help me out a few hours a week,” says Bera. “I would have had to pay four times that to hire one person, full-time, and they wouldn’t have been experts in bookkeeping, financial planning, and marketing.”

Bera also explains that it can provide a tangible return for you and your  business, and shared her own experience. “The truth is that outsourcing allowed me to grow my business last year while I was going through a divorce,” she says. “I don’t think I would have done nearly as good of a job for my clients and keep up with writing gigs if I wasn’t able to depend on my freelance team. My social media presence continue to grow during this time as well which has lead to more writing and speaking gigs for 2015.”

Remember, outsourcing will add on to your expenses. But it also allows you to scale up and grow your business — and it provides a better, more cost-effective way of growing than traditional ways of hiring.

“It used to be that in order to grow your firm, you had to hire a full-time staff member,” says Moore. “You ended up with a receptionist that you had to train to do bookkeeping and tried to teach how to help with client data intake forms.”

“Now, you can hire 3 specialists to perform those tasks. This helps to reduce costs, because you only pay for what you need, and lets you hire true specialists instead of trying to train someone not completely qualified for every single task thrown their way.”

Where to Find Quality Freelancers and Contractors

Once you know what tasks need to be outsourced and you’re ready to start building a virtual team, you can start seeking out talented people to provide their expertise. Knowing where to look can be difficult if you haven’t hired a freelance or contractor before, however.

Choosing someone with a knowledge of or background in finance may provide you with the best experience. XY Planning Network has its own line of extra services for members and nonmembers. If you need to outsource your blog management, blog content, or social media management, this is an excellent way to ensure you hand off this work to a team that innately understands the needs, wants, and goals of a financial planning firm.

And we also like The Client Connection from Careful Cents for this reason. Carrie, the owner of the site, worked as an accountant for 10 years before starting her own business focused around supporting “solopreneurs,” or one-person businesses (often run as sole proprietors).

She’s built a large network of freelancers and independent contractors with similar backgrounds and experiences in a financial field. Many of her connections — and members of the Client Connection looking for work — understand basic personal finance principles and can use language that fits in with a financial brand.

There are other networks that you can try, as well. “99 Designs, Fiverr and ODesk are a good place to start,” suggests Brewer. “I am currently looking at the Leapfrog VA Network for a general Virtual Assistant.”

Or stick to your own network of people to find great help, says Storjohann. “First, look to your personal network for referrals. Leverage contacts on social media and be open that you’re looking for assistance.”

Bera seconds the idea of remaining open to people who may already be in your network or connected to you via social media. “My content manager found me after we connected on Twitter, so that was easy!” she says. “My associate planner went to the University of Georgia with a friend of mine, and then we met in person at a conference. My bookkeeper was a referral from another CFP®.

Wrenne says referrals are a good way to go. “I want referrals from other firms that are already doing a great job on what I would like to do. These referrals are sometimes hard to find but I consider them essential,” he explains.

A Few Tips to Keep in Mind Before Outsourcing Work in Your Business

If you’re thinking about giving a virtual team a try in order to grow your business, there are a few tips and tricks you can keep in mind — along with a few resources that might provide more essential information for you.

“I would highly recommend the book Virtual Freedom by Chris Ducker to get an idea of how to manage outsourcing and what you can outsource,” suggests Brewer.

Storjohann says you should ramp up outsourced work slowly while you learn to manage your new team. “Start with a few hours a week for small tasks that don’t necessarily require your expertise to execute such as updating twitter, uploading blog posts, managing your books, and so on.”

Bera says you can lean on your fellow advisors for support, too. “Start by getting clear about the work you need help with and then send the job description to 10 other financial planners,” she advises. “We’re a resourceful bunch. I think you’d be surprised who comes your way!”

Need additional support to grow your firm? XYPN is here for you. Learn more about the network by checking out our introductory video.

Kitces Roundup: Best Posts for Financial Advisors Looking to Start a Firm

Kitces Roundup Financial Advisors

Considering starting your own firm? More and more financial advisors are exploring this path — and with networks like XYPN that provide the necessary technology platform, compliance support, and other tools that make it possible to run a successful business, it’s becoming an increasingly realistic option for advisors who want to serve their ideal clients, their way.

While starting your own financial firm is possible, there’s still a lot of information out there about how to do it. It can get overwhelming, especially if you don’t know where to start.

We’re here to make it a little easier for you. We’ve rounded up 25 of the best posts from XYPN co-founder Michael Kitces’ blog for financial advisors looking to start a firm. Enjoy! Read more

Investment Management Options for Registered Investment Advisors


Investment Management Options for RIAs

When I launched my RIA in 2012, I was completely overwhelmed by the prospect of being a solo firm owner. I went from being a junior planner, only responsible for working with clients, to being the financial planner, investment adviser, compliance officer, marketing guru, tech-fixer, and bookkeeper.

In addition to wearing all of the hats, I was creating and implementing a process of providing financial planning services, and learning how to actually run the business. Even with all of this, my biggest fear was the investment management portion of the business.

I had always worked in firms that had investment experts, so I was strictly on the planning side of the house. The thought of learning how to manage investments, in addition to everything else, was overwhelming.

“What are my options for investment management?” is a really common question we hear at XYPN. There are actually a lot of different options out there, and choosing one when you first launch can be difficult.

Download our free business plan template to organize your options and design your ideal firm.

Here are some the options available to you as new(er) firm owners.

Don’t Manage Investments

Remember that you don’t have to manage money at all. Investment management can be a very time consuming and complex process (especially if you don’t use third-party platforms for support), so simply eliminating the service all together can help save you a ton of time and energy. It will also keep your E&O insurance rates low, since trading errors aren’t a risk, and that might save you quite a bit in your first year.

Other than not wanting to spend the time, what are some other reasons you might want to not manage investments for clients? A few to consider include:

They might not need investment management. If you work with younger clients, recent graduates, etc. then they might not have assets to manage, so it simply isn’t a service they need.

You might decide that there are too many conflicts when it comes to managing money. Kate Holmes, founder of Belmore Financial in Las Vegas, is a financial planner that has chosen to not manage investments. She told me that her clients “like that [she doesn’t] have any conflicts when it comes to doing both their financial planning and managing their investments.”

Conflicts can arise in various situations. One example is if you work with a lot of military members or government employees with access to the TSP. Many would argue that those clients should keep their money in the TSP, while advisers managing investments have incentive to roll the money over to an IRA.

Another example is the infamous conflict that fee-only advisors are accused of having, which is whether to have clients pay down debt or leave money in their investment accounts. When you don’t manage investments, you don’t benefit from the client making the decision to invest more and keep debt which can help keep the advisors unbiased and objective.

Some advisors ultimately want to focus on providing financial planning services. While we will discuss some outsourced options below, some advisors don’t want to manage these outsourced providers either, and prefer to keep their business model even simpler.

For advisors that don’t manage investments, how do they help their clients with their portfolio? There are a couple of options:

  • You can simply direct clients to a low cost do-it-yourself custodian like Vanguard. Vanguard allows advisors to have view access to investment accounts (with clients permission of course) so you can see if clients have implemented your investment recommendations, though ultimately the control and responsibility is theirs.
  • You can use a technology platform like Blueleaf with built-in account aggregation to gain view access to your client’s investment accounts. This way you can view their IRA’s, 401(k)s, checking and savings accounts, etc. Note: If you tell them that I told you about Blueleaf, you will get two months free, and so will I.
  • Simply make recommendations as you see fit, and ask clients for statements on a regular basis (quarterly is likely preferred) so you can keep an eye on their accounts.

Partner with Another RIA for Investment Management

Advisors who want to focus on financial planning and outsource the work that goes into investment management might prefer to partner with an RIA that is passionate about investments. We all have our passion, and while I’m in the “I love planning and hate investing” camp, there are a lot of “I love focusing on investments and hate doing planning” camps out there.

If you look around, you will likely find a lot of firms that are willing to help provide investment management services. I’ve seen successful relationships structured several ways:

Prominent NAPFA member Bob Maloney is an advisor that is passionate about financial planning, but isn’t interested in serving as his clients’ investment adviser. He has partnered with an RIA that only provides investment services, and completely outsources the service. This means that the client is contracted with two companies: one to provide financial planning and another to provide investment management.

Clients pay Bob’s firm for financial planning, and the other RIA for investment management services. In addition, since both firms provide different services and aren’t competing, they are able to refer business back and forth.

Note that Bob actually pays the investment firm a referral fee which is calculated as a percentage of revenue that Bob receives from clients, to send him financial planning clients. Bob doesn’t receive any referral fees for sending the investment company clients.

Most incorrectly believe that organizations like NAPFA prohibit the paying of referral fees. NAPFA only restricts the acceptance of referral fees, not paying them, in order to avoid conflicts that would cause. They just don’t want their advisors to be incentivized to recommend one professional over another, and instead want the advisors to recommend the best professional for the client.

If you prefer to simplify the relationship for your clients, you can contract with an investment management firm to provide services to your clients. There is some crossover with this type of agreement and working with a traditional TAMP. By contracting with an investment management firm, you would have your clients sign a 3-way agreement between the client, you, and the investment firm.

As the financially planner that initially worked with the client, you would want to ensure that contracts state that you “own” the relationship meaning that you can fire the investment firm, and they wouldn’t be able to contact the client. With this type of relationship, you would typically oversee the work being performed by the investment manager, establish the clients’ goals which then dictates portfolio construction, and be responsible for client communication.

The investment manager would then handle all of the investment management related tasks, such as account opening, transfers, research & analytics, performance reporting, billing, rebalancing, etc.

Use Traditional TAMP

Similar to outsourcing to another RIA, advisors can choose to work with a traditional TAMP. I’m using the term “traditional” to differentiate from the newer technology-based TAMPs that have come into the market in the last few years.

A TAMP, short for Turnkey Asset Management Platform, is a fully outsourced investment management solution. TAMPs are designed to allow the financial advisors to outsource all of the work that goes into managing investments.

Every TAMP is structured differently, and provides a variety of services. When evaluating TAMPs, you should be sure that you understand:

  • Fee structure – There can be a lot of layers of fees, including custodial fees, trading fees, and underlying fund expenses, in addition to the fees to the TAMP itself. There might also be a la carte fees for services like performance reporting, billing, etc. Fees vary wildly, but most start at .35% of AUM and I have seen fees over 1% depending on services offered.
  • Investment philosophy – If you are a big believer in DFA, you can find a TAMP that uses DFA funds. You will find TAMPs available to support a wide variety of investment philosophies including market timing, passive, tactical asset allocation, and everything in between.
  • Additional services – TAMPs might provide an online portal for clients, assistance with filling out paperwork, performance reporting, and even para-planning services. Be sure you know what they offer, even if you won’t need it immediately.
  • Minimums – Most TAMPs requirement asset minimums. They will likely have a minimum level of assets that the advisor brings over, minimum assets that each client has with the TAMP (at a household level), and a minimum account size as well (for each account within the household). Be sure you understand these minimums, and ensure they are in line with your typical/ideal client.
  • Legal contracts – It is probably worth having an attorney review any contracts you sign with a TAMP. You want to be sure that you retain hire/fire rights when you partner with a TAMP, because they last thing you want is for your to fire your TAMP, only to have them contact all of your clients.

Use Technology-Based TAMP

New on the scene is a slew of technology-based TAMP services that is bringing down the cost of outsourcing investment management services. Many are leveraging technology originally produced to bring investment management services to consumers at very low cost, now developing platforms for advisors to better serve their clients.

As far as I know, all technology-based TAMP’s provide the same basic services including a rebalancing solution, reporting, billing, client portal, etc.

Here are some options if you’d like to go this route for your investment management:

Betterment Institutional (or B+) – Based on technology from their sister company Betterment, B+ provides an advisor-facing solution to outsource investment management.

  • You can elect to use their model portfolios, or build your own using their 12 preselected ETF’s.
  • Accounts are rebalanced daily, with no transaction costs, and have built in tax-loss harvesting capabilities.
  • All account opening and transfer paperwork is electronic, the client portal is super slick, and ultimately it allows you to get out of the day-to-day tasks that you don’t need to be a highly trained CFP to provide.
  • Fees are 0.25% of AUM (plus the modest expense ratio of the underlying index ETFs), with no account or advisor minimums.

The downside of B+ is that currently, you can’t ACAT in existing asset positions, meaning you need to sell all assets to cash before transferring to Betterment. Depending on your ideal client, this may or may not be an issue. B+ also doesn’t currently allow you to exclude assets from the model portfolios, so you aren’t able to hold cash or legacy assets.

Motif Advisor Motif Advisor is another advisor platform built around what was originally a retail-focused platform. Motif Advisor utilizes “Motifs”, which in practice is just another name for a Portfolio.

  • Each motif can hold up to 30 stocks and ETF’s.
  • You can build your own Motif, or select from the tens of thousands that other advisors (and consumers) have created. You can then purchase the Motif in your client account. Advisors commonly have a core Motif, and satellite Motif’s, and use different combinations to accomplish the clients goals.
  • Motif Advisor allows for two layers of rebalancing – you can rebalance the positions within the Motif itself, or you can rebalance across all the Motifs held in the account.
  • Motif Advisor allows advisors to ACAT in some holdings (not mutual funds currently) and hold funds outside of the model.
  • Fees start at 0.25% AUM and go down as the advisors assets grow. They do have a $50,000 account minimum in the form of a $10/month/account fee.

Why would you use one of these, or another, technology-based TAMP? Ultimately it is all about providing your clients with cutting edge technology, and outsourcing work that doesn’t bring clients a lot of tangible value. The new technology-based TAMPs in particular tend to have better client portals, and a more efficient (online-only) onboarding process for new clients and all the associated paperwork (which is handled electronically).

The ultimate goal, with any of the above options, is allowing you to focus on what you love doing, and outsourcing the tasks that you don’t enjoy doing.

Handling Investment Management with a Traditional Custodian

Despite all of the above choices, the most common choice by far amongst advisors is to do the “hands-on” management of investments yourself. By going the “traditional” route, you will sign on with a custodian to hold your client accounts. In practice, the leading custodial platforms can be separated into two groups, as they pertain to new(er) startup advisors:

Type 1: Custodians that primarily work only with large advisors – These bigger custodians typically have advisor minimums such as: Schwab ($25 million), Fidelity ($25 million), TD Ameritrade ($10 million), and Scotttrade Advisor ($7 million). Some will accept advisors below their minimums, but only with a significant platform fee (e.g., $10,000/year).

As a new advisor, these custodians are simply not an option in most cases. In a recent conversation with a sales rep for TD Ameritrade, they admitted that 9 out of 10 advisors that have less than $10 mil AUM fail within a few years.

While I personally think that the lack of support provided by the custodians isn’t helping, it is understandable why they are reluctant to bring on smaller RIA’s.

Type 2: Custodians that specialize in smaller advisors – Two custodians have remained dedicated to newer startup RIAs: Shareholders Service Group (SSG) and TradePMR. Neither of these custodians have minimum advisor assets, and are likely your only choices when starting an RIA.

TradePMR is known for providing additional resources, such as performance reporting and basic rebalancing. SSG is known for really deep discounts to different affiliated service providers they partner with, and for their customer service. In fact, I recently called SSG and the President of the company picked up the phone… hard to beat that!

Many advisors will ultimately decide to establish a relationship with a traditional custodian for a variety of reasons. Some of the more common I have heard are:

  • Money – Even though the technology-based TAMPs are relatively inexpensive when compared to traditional TAMPs, paying .25% of AUM fees can be a difficult pill to swallow. When you are starting a firm, every dollar counts so it can be tough to pay the fees to their platforms. (Though notably, some advisors simply include the platform fee as a part of their overall AUM fee, effectively passing the cost through to the client, since the all-in expense is still lower than the cost of many mutual funds.)
  • Control – TAMPs, both technology-based and traditional, force advisors to relinquish some level of control. Whether it is limiting yourself to only ETFs/stocks, or being limited to the investment philosophy of your TAMP, or simply having to rely on someone else to actually make the trades, some financial planners just don’t want to give up control.
  • Love It – Some advisors simply enjoy providing investment related services and prefer to provide the service to clients themselves.

One of the main reasons that advisors decide to AVOID a traditional custodial relationship is money. Providing investment management can be really expensive, both from a time stand point, but mainly from a hard cost standpoint. Common expenses include:

  • Custodian – Most custodians require you to keep $1,000+ in your firm’s master account. As a start-up, this is a tough pill to swallow.
  • Performance reporting software – Providing performance reporting to clients can get really expensive. Orion, a popular choice for performance reporting software, has a minimum annual fee of $10,000/yr. Less expensive alternatives like Blueleaf start at $2,340/yr.
  • Analytics – Some advisors want analytic software such as Morningstar Advisor Workstation or Riskalyze.
  • Risk Tolerance Software – Advisors typically purchase Finametrica, or another risk analysis software, to help determine their clients risk tolerance. (Though some may wish to use risk tolerance software even with TAMP solutions.)

The Combination Approach

Each group discussed has its pros and cons, but none of the options may be sufficient for your firm. From my experience, when an advisory firm hires a TAMP, they tend to outsource all of their investment-related tasks.

For those choose to work with a technology-based TAMP, many are also establishing a traditional custodial relationship (and splitting clients to each according to client needs and based on client account sizes).

Also, currently none of the technology-based TAMP’s provide “unique account types” like solo 401(k)s, SIMPLE/SEP IRAs, Coverdell ESAs, etc. Most also have limitations on types of assets that can be transferred in, so advisors may need a custodian in addition to help manage these assets in an account if the client doesn’t want to sell the position.

The owner of B+ recently told me that they are seeing a lot of advisors using their platform to manage the core portfolio, and using the custodian to manage other account types, hold legacy assets, invest in “satellite” strategies, etc.

Charging Clients When You Outsource Investment Management

Before we wrap up, I want to address the most common question we hear about outsourcing investment management to either another RIA or TAMP: “How can you charge an additional fee if you outsource all of the work?”

It’s true that by hiring a TAMP you are outsourcing a lot of the work that goes into managing money such as opening accounts, transferring assets, rebalancing, creating/implementing model portfolios, etc. However, I believe that if a computer system can easily do the task, then it isn’t really worth a lot.

Ultimately, the real value that financial planners provide is in helping clients avoid the big mistake. Our friend Carl Richards’ sketch sums it up well:


It doesn’t matter if you help a client beat the market year after year, if during a down market they go to cash. As advisors, we are between clients and their money. We are between clients and doing something really dumb that will ultimately mean they can’t meet their financial goals.

How much is that service worth? In my opinion, a whole lot more than what most advisors charge.

How Young Financial Advisors Can Make 2015 Their Best Year Yet

Young Financial Advisors

2015 is shaping up to be a great year to be a young financial advisor running their own firm – or looking to get started. The new year will be the first full calendar year that XY Planning Network is fully available to young financial advisors wanting to take their business to the next generation.

The network launched 9 months ago, and we’ve since grown to nearly 50 advisor members. All the while, XYPN has been working hard to deliver more and more benefits to those that want to join our ranks.

The Newest Way Members Benefit from Network Access: Turnkey Compliance Services

Our latest effort? The expansion of turnkey compliance services and resources available to our new and existing members. The new solution includes a complete new-RIA-registration package for young financial advisors launching a new RIA (including completing Form ADV, state registrations, and more), and ongoing compliance support and tools for existing state-registered RIAs. Read more

XY Planning Network’s New Find an Advisor Portal: A Win for Consumers and Planners

Find an Advisor Portal

Advisors, it’s nearly 2015. The web celebrated its 25th birthday this year. An online presence is essential to the success of your practice, and countless digital tools exist to help you run that practice in the most efficient way possible.

With all the technology available to us – and the demand for more tech-savvy service providers from younger generations – it’s time that we stopped letting physical location limit who we can help.

That’s why XY Planning Network is thrilled to provide the first search engine for consumers to use in order to search for a financial planner based on unique needs and specific situations. Our new Find an Advisor Portal allows for Gen Y and Gen X clients to find and connect with the one advisor who could best serve them, based on their preferences, goals, and stage of life.

The new portal benefits consumers and it benefits our advisors. Here’s how. Read more

3 Advisors Explain Their Best Tips for Time Management


Time Management for Financial Advisors

We all have 24 hours in a day — so why do some people seem so much more productive?

It’s all about your time management skills and knowing how to maximize the time you have available to work both in and on your business. The good news is that financial advisors can learn to better structure their time. You can make room in your days and weeks for all your clients, projects, business tasks, networking, continuing education and more that you want to devote your attention to.

Financial advisors can take action to create effective schedules and do more with their days. Start with these tips from three XYPN advisors (including our co-founder) to better your time management. Read more

Why Financial Planning Conferences Don’t Attract Young Advisors – and How FinCon Can Save Them


How FinCon can save Financial Planning Conferences

Financial planning has an age problem. We have more CFP’s over 70 than under 30.

One of the most effective ways to engage young advisors is conferences, and yet the current slate of conferences is deteriorating to a point that it’s just sad. It’s difficult to find a conference with enough young advisors to fill a table, much less a room.

A recent trip to FinCon made us realize what must change in order to save financial planning conferences. We only hope that conference organizers will read this post with an open mind, because “the way it’s always been done” simply isn’t working any longer.

This should serve as a starting point, a basic guide, to attracting young advisors to financial planning conferences. Read more

Choosing a Webinar Service: Insights from Behind the Scenes at XYPN

technology for financial planners

With dozens of great webinar providers out there, how do you choose the right one for your needs?  Where do you even begin?

When XYPN set off to find a webinar service, we began by asking ourselves a series of questions to help us delineate not only our institutional needs, but more importantly our member’s needs.

Here are some questions that can help you build your “must have” rubric: Read more

Improve Your Practice Image

3 Steps to Improve Your Practice as a Financial Advisor by Taking Your Own Advice

Improve Your Practice Image

Many times we don’t take our own financial advice and that has a negative impact on our ability to enroll others in our services. If we aren’t practicing what we preach, why should anyone else care?

In his book Platform, Michael Hyatt suggests that we should create a product (or service) that we would personally use. In my case, that’s easy, because I am a young professional and money is a major part of my life.

In order for my life (and business) to work, I must implement a financial strategy that supports my lifestyle.

Here’s how I take my own advice in order to run a better business in 3 steps — and how, as fellow financial advisors, you can improve your practice in the same way: Read more