At the PLANADVISER National Conference in Orlando, Florida, panelists discussed the best ways and reasons to leverage and utilize partnerships. Anders Smith, senior vice president of DCIO and Strategic Platforms at Nuveen Investments, noted that many advisers say, “Help me to understand the profitability of my business.”
It is important to look at your practice as a business and to understand that how you spend your time impacts profitability, Smith said. Some things an adviser already does in his practice can be performed by a third party at a lower cost. Third-party services include payroll management, advanced sales and distribution, among others.
“[Providers] think about what tools we can create to help you run your business,” said Randy Blanchetti, regional vice president at Principal Financial Group. Advisers should look at what a practice is doing that can be outsourced, what a practice wants to do in the future that it will need time for and what new technology and programs exist.
An adviser’s time should not be spent on administrative issues, Smith added. “Think about the core things of your practice that you have to do, spending time on those revenue-generating activities,” he said.
The most important thing to ask when meeting with providers, wholesalers or third-party administrators (TPAs), according to Smith, is “What is it going to take from me to be considered one of your top clients. … What does this relationship need to look like for me to be able to call on you and get you when I need you and for you to be able to provide the resources that I need?”An adviser should look first at the key principles of his firm, what the firm needs and what resources the potential partner can offer.
Partners should meet annually to plan and quarterly to discuss proposal changes, said Kevin Devine, NE divisional vice president at Nationwide Retirement Plan Sales.
“The most successful advisers that we see have great relationships with our personnel across the board so the wholesaler, the regional vice president know your business and you know them. They know how you operate,” Devine said.
Advisers should take advantage of services to help them operate more efficiently, Smith noted.
“One service model does not fit all,” Blanchetti agreed. “The most valuable thing we can bring to you is people, boots on the ground, to help you enter new markets.”