InvestmentNews Article: Stop Devaluing Your Business
A large advisor migration toward retirement. The desire to slow down and implement succession plans. Intense demand from well-financed entities from both within and without the advisory sector.
All these factors are driving selling prices for RIAs and IBD affiliated firms higher.
But even though well-run firms are much in demand, that doesn’t mean that some practices aren’t more valuable than others based on nothing more than the perceived value they bring to their clients.
In his latest article for InvestmentNews, Allworth Co-CEO Scott Hanson posits on a specific practice management approach that he’s seen drive down the value of several otherwise successful firms.
Find out why firms that emphasize stock picking prowess over solid client service and holistic financial planning stand to lose the most as the investment advisory sector experiences further consolidation.
From the article: Stop devaluing your business
If you’ve convinced your clients that the primary service you provide for them is the management of their investments, you’re devaluing your business.
We live in an era where most investment flows are directed into passive investments, yet there are still far too many advisors who believe that the only value they bring is superior portfolio management.
Frankly, I don’t understand this.
If most professional money managers can’t outperform the indexes, neither can advisors and financial planners. And aside the question of whether this sort of active management provides any real value to a client, even if it is accretive and delivers alpha, it absolutely reduces the value of the firm.
Scott Hanson, Co-Founder, Allworth Financial