Brinker Capital at FSI OneVoice 2016 in Orlando

Noreen D. BeamanNoreen D. Beaman, Chief Executive Officer, Brinker Capital

For the third year, Brinker Capital is proud to be a Premier Sponsor of the Financial Services Institute and at the 2016 OneVoice conference in Orlando, Florida next week. This annual gathering is so valuable to us and our strategic partner firms by giving the opportunity to network and learn about the latest within our industry.

During the past few years, we have seen an evolution within the financial services industry. Advisors are now working with third-party providers who integrate their portfolios, practices and reporting. They are no longer simply just offering investment recommendations but changing the conversation with clients and how they deliver investment advice. In addition, they must keep abreast of regulatory changes that are happening within the industry and determine how their practices may be affected.

Brinker Capital understands these changes, and challenges, and is committed to creating a meaningful experience for both advisors and investors, regardless of how our products are accessed. To help our advisors, we work with industry leaders, law firms and custodians to identify how the latest fiduciary rule may impact their business and how we can best serve clients. We are focused on providing advisors with the tools, technology and resources to have more effective conversations with clients and help them embrace goals-based wealth management.

For nearly 30 years Brinker Capital has been committed to being the best strategic partner to financial advisors by bringing accountability, dependability and innovation to every aspect of our business. I am honored to be a part of this year’s Women are from Venus: The Changing Demographics of Women in the Industry and as Clients panel and look forward to an exciting discussion.

Looking forward to connecting with many of you in Orlando!

Brinker Capital, Inc., a Registered Investment Advisor

Handling ETFs at the Brinker Capital Trading Desk

Joe PreisserJoe Preisser, Portfolio Specialist, Brinker Capital

In light of the continued media attention focused on the performance of certain exchange traded funds, during the equity market selloff at the end of August, we thought it prudent to discuss the steps we take here at Brinker Capital to ensure that all of the client orders entrusted to us are handled with the utmost care.

The price action seen across the exchange traded fund (ETF) landscape in late August, and in particular on the 24th, was nothing short of extreme, and is something our trading desk makes every effort to protect our client’s orders from.  We use our trading expertise and depth of experience to ensure that we make every effort to achieve the best executions available for our client’s orders.  ETFs have truly changed the investment landscape through their unique construction and, as a result, require a thorough understanding of their characteristics in order to effectively trade them. We pride ourselves on having gathered a great deal of knowledge, insight and experience in trading these instruments over the past five and a half years, and on having developed strong relationships with a number of well-respected trading desks on Wall Street to further enhance our expertise.

As many of the articles in the financial press discussed, there was a historic level of volatility during the first hour of trading on Monday, August 24, with much of the drastic price swings caused by the exorbitant number of trading halts that occurred across equity markets.  As an ETF is predominantly a simple reflection of the average price of its components, if those underlying constituents are halted, the ETF will not be priced appropriately by the market makers transacting in the security.  This problem can also occur on more mundane openings as well, as an ETF’s components open for trading at slightly differing times.  As a result of this phenomena, unless we have a very specific reason for trading an ETF during the first few minutes of a trading session—an ETF with European exposure would be an example of an exception—we will generally avoid trading during the first fifteen to thirty minutes of the session in order to allow for all of an ETF’s underlying holdings to open and the initial volatility to abate.  Although we did not have any active orders during the morning of August 24, if we had we would not have been transacting until the volatility abated.

shutterstock_70010218The strong relationships I mentioned earlier, with several of the most respected trading desks on Wall Street, allows us to leverage their expertise whenever we are moving into or out of a large position. We carefully examine every instrument we are asked to trade, and make our decisions on an individual basis as to what the best approach would be in order to minimize our impact on that instrument and to attempt to achieve the best possible executions.  Often, when we have a large order in an ETF, which itself is relatively illiquid, we will utilize the expertise of one of our trading partners to transact directly in the basket of securities that comprise the ETF in order to access the truly available liquidity and to minimize our impact on the security we are trading.  This strategy of course would not have helped on the 24th because it was the temporary illiquidity of the underlying securities that rendered the ETFs themselves illiquid, but I feel this example is important as it highlights the efforts we undertake in an effort to seek the best possible prices for our clients. In addition, a number of the articles discussing this episode highlighted the importance of imposing price limits while avoiding the use of “market” orders and this is a guideline we strictly adhere to.  Whenever we have a meaningful trade, we always set an appropriate limit, and will closely monitor the trade until its completion to ensure that the price does not deviate from the parameters which we put in place.

While this article has discussed our approach to ETF trading, we certainly apply the same level of expertise, care and attention to all of the client orders placed in our care, regardless of the investment vehicle.

Brinker Capital, Inc., a Registered Investment Advisor. The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Holdings are subject to change.

Even in our Frenzied Industry, Shakespeare’s Voice Shines Through

Noreen D. BeamanNoreen D. Beaman, Chief Executive Officer, Brinker Capital

If you’re like me, then you have spent the last few weeks forcing helping your high schooler with his or her summer reading. In doing so, I came across a Shakespeare quote I haven’t seen in a few years, yet seemed apropos to the current climate of our industry—“Cry ‘Havoc!’ and let slip the dogs of war.” (Bonus points if you can name the play this quote is from).

The phrase itself characterizes victorious soldiers seeking spoils from a fallen foe. While poignant, advisors in the throes of the Curian aftermath are feeling like they are on the wrong side of the leash!

At Brinker Capital, I felt the foremost action our team needed to take was to be available to support financial advisors and their clients. Not to hit them over the head with how great we are, but to talk with them and understand how Curian’s offering benefited them and the goals of their clients.  We knew Curian had an impactful offering and sales culture, but we wanted to dig deeper. Our recent hire of Greg Verfaillie confirmed what we already believe at Brinker Capital.  As he expressed in his interview in RIABiz, “In the conversations I’ve been having with advisors, it’s clear this decision is not going to be made on product or platform; it’s about the relationship.”

Greg has given us insight into what attracted advisors to his former firm, the type of support that they found meaningful and what partnership means to them.  This has guided us in effectively providing the right portfolio alternative, strategically communicating so advisors can convey the right message to their clients, and most importantly, being respectful of the process they are engaging in when seeking a successor firm for their clients’ assets.

With our 28-year history and our dedication to understanding the needs of advisors, we are ready to help provide solid support and smooth transitions throughout this frenzied process. After all, as our aforementioned poet once said, “Experience is the teacher of all things.”

The views expressed are those of Brinker Capital and are for informational purposes only. Brinker Capital, Inc., a Registered Investment Advisor.

Tech Talk: Disrupting the Industry

Brendan McConnellBrendan McConnell, Chief Operating Officer

Over the last two years we have seen a tremendous amount of change driven by technology in the financial services industry—an industry that has gone from lagging around technology innovation to one that is very much at the forefront. With change comes disruption, and we are beginning to witness a tremendous amount as wealth management firms adjust to offer technology-driven investor experiences.

One recent disruption that has seemingly dominated headlines is that of the online digital advice firms, perhaps more widely known as the “robo advisor.” In most cases, these platforms provide a lower-cost, time-saving alternative for the average investor complete with a more frictionless experience through the use of technology. These firms have set a new baseline around portfolio management, and traditional advisory firms are reacting.

Charles Schwab, Fidelity and Vanguard are three major institutions now offering, or planning to offer, their own digital wealth platforms. They are making a conscious and deliberate investment to deliver this type of technology to the segment of investors who would prefer less human interaction and faster execution of transactions. These platforms also allow the financial advisor to bring additional scale to their own practices.

At Brinker Capital, we hear concerns from financial advisors on how this new class of investment management is impacting the industry and, more importantly, how it’s impacting them. Suffice it to say that the real impact on the rise of technology in the industry will ultimately be a positive impact for advisors and investors. These new technology innovations are making their way into the hands of financial advisors to in turn offer to their clients. This will lead to a more efficient and productive advisor with the ability to serve a broader audience of consumers looking for financial planning and advice. The future-ready advisor will be one that can offer comprehensive financial planning while maximizing the technology available in the industry.

Technology is changing the way consumers view financial advisors. The services that consumers value most from advisors has certainly started to shift. This has upended the advisor value stack. At a recent Fidelity Investment conference, Sanjiv Mirchandani, President at Fidelity National Financial Clearing and Custody, outlined Fidelity’s vision of the future advisor (images below) with a simple and easy-to-understand visual of the current advisor value stack.

The traditional financial advisor value stack:

Advisor_Value_Stack_Traditional

Source: Sanjiv Mirchandani, Fidelity

Now, technology and investor preference has upended and squeezed the top-end of the value stack:

Advisor_Value_Stack

Source: Sanjiv Mirchandani, Fidelity

What Fidelity is identifying here is that investors are putting greater importance on financial planning and behavioral management when selecting a financial advisor. This is the opportunity for a financial advisor to demonstrate their value and justify their fee over the digital advice offering. Fees are less of a concern with advisors who are following this new value model. The new future-ready architecture is one that supports goal-based financial planning and a digital experience. Advisors who focus on these values seem better positioned to succeed in this evolving landscape. Advisors should focus less on the portfolio management, outsourcing these duties, and more on a planning centric client relationship maximized by technology.

The views expressed are those of Brinker Capital and are for informational purposes only. Brinker Capital, Inc., a Registered Investment Advisor.

Tech Talk: Adding Value Through Technology

Brendan McConnellBrendan McConnell, Vice President, Business Administration

I recently participated on an advisor technology panel at the 2014 FSI OneVoice event in Washington, D.C. One of the topics of conversation highlighted the number of new technologies available and what technology an advisor should consider adopting. It starts with creating a solid technology foundation.

Financial services, not unlike most other industries, is a competitive landscape where it can be difficult to separate yourself from the pack, so to speak. There are a lot of skilled institutions and personnel promoting similar products and services. Embracing the right technology is one way to differentiate yourself. Adding technology to your practice can be disruptive, but a firm with the right appetite for change finds success in transforming the customer experience. Let’s look at a few tools and concepts you should start considering adding to your business.

Adopt a Customer Relationship Management (CRM) System
CRM systems are designed to help you manage your business more strategically and efficiently. They serve as the ecosystem where all relevant business data exists—from client contact information and account data, to prospect opportunities and service requests. Your CRM is the hub around which all other technology revolves. Most CRMs are now offered as cloud-based technology, giving you access anywhere on any mobile device and eliminating the need to support the technology infrastructure. The cloud delivery also makes CRM much more affordable. Use CRM systems to automate workflows and eliminate those time-consuming, manual procedures. Set up alerts so that you know when a new proposal is run or an account hits a specific threshold. Have emails proactively sent to your clients when a service case is completed or for an anniversary or birthday. Time is your most valued resource, add more of it through a properly implemented CRM system.

Adopt a CRM SystemIf you are currently using a CRM, your future technology choices should include an evaluation of integration with your system. Think of your CRM like a power strip that all other technology plugs into. This will provide you with a simplified infrastructure with one source and a single log in. If you are shopping for a CRM, take a look at your current core system, software, and platforms and find the CRM that will integrate best with your existing technology. If you follow this strategy it will eliminate the siloed technology approach, which often leads to inefficiencies.

Improve the Client Onboarding Process
As important as embracing technology is to your internal processes and procedures, it’s vital for enhancing the client experience. This is where you prove to the client that you add more value than simply serving their investment needs. A recent Fidelity RIA Benchmarking survey found that 77% of high-performing firms were focused on using technology to enhance the customer experience and satisfaction.

Client onboarding, for example, is an area worth the technological investment. Tools that allow for pre-population of forms, applications that allow secure, electronic signatures, using CRM data to customize templates—all of these enhancements create a unique and personal experience for the client. And we all know the adage “a happy customer is a loyal customer.” In addition, a paperless workflow technology can provide a tremendous amount of efficiency and process standardization that can help reduce resources required (time and money) and help eliminate mistakes.

Customization is KeyProvide Customizable Client Reports
What about the ongoing servicing of existing clients? Client reporting, much like the onboarding process, helps enhance and maintain successful relationships. Each one of your clients has an investing objective that is personal to them. You need to be able to provide them with a custom report that shows how they are measuring against their goals rather than trying to fit them into a predefined template. The one-size-fits-all model is no longer going to meet your clients’ expectations for the evolving world of goals-based investing.

The driver behind successful adoption of technology for any practice is internal participation. You must have buy-in within your organization or practice. Whether a one-man show or a team of 20, everyone has to commit in order to maintain a culture of innovation. With proper adoption of technology, enhanced client experience and satisfaction will be within reach.