Products August 29, 2016

Vertical Management Systems Partners With Mid Atlantic

VMS has added Mid Atlantic Trust Company as a trading destination and custody provider within its adviser and TPA network. 
Reported by

Vertical Management Systems (VMS) announced a new partnership with Mid Atlantic Trust Company, allowing VMS clients new access to Mid Atlantic’s supermarket of mutual funds, exchange-traded funds (ETFs), and tools such as ModelxChange.

“We are excited to offer our services to VMS’s Retirement Revolution ecosystem,” notes Tim Friday, president of Mid Atlantic. “Their modern technology structure allows Mid Atlantic to provide a very cost effective solution to their end-clients.”

For more stories like this, sign up for the PLANADVISERdash daily newsletter.

New offerings will be delivered to VMS clients via the Retirement Revolution program, described as “a next-generation recordkeeping platform built for today’s demands, with 100% fee transparency, true open architecture and participant-level recordkeeping.” According to the firm, the approach “radically simplifies 401(k) recordkeeping, provides greater operating flexibility and transforms the way forward-thinking organizations manage their retirement business.”  For more information, see http://vmsholdings.com/Home/RetirementRevolution.

To learn more about VMS, visit www.vmsholdings.com.

Data & Research August 29, 2016

RIAs Need to Focus on Efficiencies to Drive Growth

After explosive profits in 2014, they declined sharply in 2015.
Reported by

More than two-thirds of registered investment adviser (RIA) firms said they will emphasize operational efficiency to drive future growth and improve the bottom line, according to “The FA Insight Study of Advisory Firms: Growth by Design,” published by TD Ameritrade Institutional.

After explosive growth in 2014, key performance metrics declined sharply last year, and RIAs expect the same for 2016. Assets under management (AUM) grew 10.6% in 2014, but AUM growth dropped off to 4.7% in 2015—a 56% decline. After very healthy revenue growth rate of 14.4% in 2014, this metric fell to 7.3%. RIAs enjoyed a client base growth rate of 7.1% in 2014, but it was only 6.0% last year. And RIAs’ median operating profit was 26% in 2014, but only 20% in 2015.

Never miss a story — sign up for PLANADVISER newsletters to keep up on the latest retirement plan adviser news.

TD Ameritrade said that the squeeze on profitability means that rather than relying on the markets to generate growth, RIAs need to proactively plan for their futures.

“After 2014’s record profitability and explosive growth, advisers now must be more disciplined—and that’s not a bad thing,” says Vanessa Oligino, director of business performance solutions at TD Ameritrade Institutional. “Firms need growth plans that go deeper than just riding the market tide if they expect their success to carry through different cycles.”

TD Ameritrade found RIAs in the top quartile converted 40% to 50% more owner income per dollar of revenue. They also spent a much lower percentage of revenue on overhead expenses, resulting in greater profitability and higher income per owner.

Fifty-six percent of standout firms said that client experience is a key growth driver, versus 41% of their peers. Standout firms also said it is important to deliver consistent, high-quality client service and onboarding.

Only 34% of firms in 2015 had increased their pricing in the past two years, compared to 42% in 2014. TD Ameritrade said this may be misguided—if RIAs clearly articulate and demonstrate the value they deliver, they can command higher fees.

Twenty percent of RIAs point to mergers and acquisitions as a key driver of recent growth, with the most common transaction being the acquisition of a solo practictioner.

The report is based on a survey of 325 advisers. More information is available online at www.fainsight.com. 

«