Products April 20, 2016

New Redtail Technology Services Added to Morningstar Office

Morningstar and Redtail Technology announced an agreement to add Redtail's CRM functionality to Morningstar Office for financial advisers.
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Morningstar Inc. is integrating Redtail Technology’s customer relationship management (CRM) capabilities into Morningstar Office, its portfolio and practice management system for financial advisers.

The integration further expands Morningstar’s relationship with Redtail. In 2014, the companies worked together to provide access to Morningstar’s proprietary research and analytics within the Redtail CRM user interface. 

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“Now, advisers can transfer data between firms to reduce redundant entry and provide up-to-date client and account data within the Redtail CRM interface,” the firms explain. “Redtail will become an integral part of Morningstar Office, along with account aggregation, back-office services, and rebalancing capabilities.”

Jeff Schwantz, Morningstar’s head of adviser and wealth management solutions, North America, says that incorporating Redtail CRM as a core functionality in Morningstar Office shows the firm is embracing an “open technology ecosystem” to improve the daily management of advisers’ practices.

In addition to account aggregation, back-office services, and rebalancing capabilities, Morningstar Office includes portfolio management and performance reporting, advanced research functionality, sophisticated investment planning, and secure client communication. Redtail CRM solutions include automated workflows, an intuitive user interface, and paperless office and email archiving.

Client Service April 20, 2016

Small-Business Owners Remain Prime Candidates for Advice

Small-business’ equity is rarely as liquid, or even as valuable, as its owner expects, especially when one needs to cash it out quickly. 
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Small-business owners planning to exit their businesses for retirement or other reasons may be in for a rude awakening when looking to cash out their equity, according to new survey research from Securian Financial Group.

“While 54% of business owners plan to leave their business in the next 10 years, 72%  have taken no exit planning action,” the firm warns. The survey results further show the “vast majority of small-business owners are unprepared for exiting their businesses. The financial ramifications, especially for business owners counting on their companies to fund their retirement, could be significant.”

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The findings are in line with the most recent PLANADVISER Micro Plan Survey, which shows small-business owners are slowly but noticeably wising up to the retirement-related risks their businesses face—especially regarding the ability of their employees to retire on time and with sufficient savings. Perhaps one of the most telling findings from the 2015 edition of the survey is the increase in the number of retirement plans that work with an adviser and have $5 million or less in plan assets. That statistic has risen considerably in the past year to 65.9%, up from 52.0%, indicating that more small-business owners are aware of their need for guidance and are turning to advisers for help.

It may also suggest that advisers are finding worthwhile and profitable opportunities in this market, for example by sitting down with the small-business owner to work on their own retirement transition plans. Complicating the matter, this type of “cross-sold” work is one of the main points of content in the Department of Labor’s new fiduciary rule.

Andrew O’Brien, who directs Securian’s business owner client solutions group, says that “for most small-business owners, the business is by far their largest asset. Not properly planning for the sale or transfer of their business can leave a lot of people—including the business owner—in a very difficult position.”

According to the survey, just about half of small-business owners “want to sell their business to a partner, key employee or third party, while 37% want to transfer the business to family members.” Channing Schmidt, who leads a team of Securian associates who advise financial professionals and their business owner clients on advanced planning, warns that such a sale or transfer will inevitably involve “multiple financial and legal steps that tend not to work well for the owner when rushed.”

“A written exit plan developed by a team of experts working in concert with the business owner is the best way to prepare for a successful transition,” he concludes.  

Six hundred small-business owners with an average of 27 employees and annual revenue ranging from $250,000 to more than $20 million were surveyed in August and September 2015 for the Securian Small Business Owner Life Stage Study. More information is available at www.securiannews.com. 

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