Business development services as unique as the advisors themselves


IIt has been said of financial services that there are as many different business models for advisors as there are financial advisors themselves. Advisors bring their unique personalities, perspectives, and ways of engaging with their clients to their practices and businesses. The challenge for Custodians, Connecting Houses, Independent Brokers, RIAs, Solution Providers and FinTech companies is to support and help all of these unique businesses grow. Most of the practice management, business development and service models of these entities tend to be regulated and grouped into service and solution platforms that address the core challenges of advisors as a whole and are formatted similar. This is a wise and efficient way to deliver these services at scale, but may not meet all of each individual advisor’s particular needs and unique vision for their business and growth goals.

To dig deeper into this, we decided to reach out to new Institute members Jim Malgeri, President and COO, and Drew Horter, CEO of Civitas Advisor Solutions – a business development company for advisors, consulting and financial institutions based on partnership, community and culture. Their primary mission is to assess and strategically develop a personalized business plan, tailor specific solutions to individualized support needs, then partner with the business on an implementation plan and guided execution. We asked Jim and Drew questions to explore their views on building a business to be the “Advisor of Advisors” and meet the changing business development needs for Advisors in this hyper-competitive business environment now. driven by an accelerated rate of change.

Horz: What is your motivation for launching Civitas and what are the industry challenges you face?

Malgeri: The motivation for launching Civitas Advisor Solutions is truly based on an altruistic quest to help advisors succeed personally and in their consulting practice. Our name, “Civitas”, comes from the Latin meaning “Community” with the basic pillars of the business being Culture, community and partnership. Our goal is to develop a community of like-minded advisors who seek business development support from major financial institutions, broker/dealers and RIA platforms and want to incorporate the latest thinking and competitive resources available to grow their individualized businesses. .

Horter: Currently, financial institutions and advisory service providers offer transition brokerage advisors and independent financial advisors a “platform” with a variety of services. In today’s business environment, this out-of-the-box approach may prove too restrictive, outdated, and costly for many advisors and RIAs. Many of these advisor support platforms may not be up to date with the accelerating changes taking place in the industry in technology, business model innovation, changing client perspectives and new digital customer engagement strategies. Advisors and RIAs move to an independent “platform” to be offered a static stack of services for a basis point fee. The result is that advisors and RIAs pay up to 30 basis points or more in some cases for a “platform” with generic tiered services, but also, over time, pay the provider of the platform in basis points thanks to increased AUM growth.

Horz: How have you deliberately designed your program to address these challenges and provide a different level of support for advisors and their businesses?

Malgeri: The genesis of Civitas Advisor Solutions is the creation and implementation of the next generation of business and support solutions for advisors and RIAs. We engage Broker Advisors and RIAs through free consultations (no limit on the number of initial conversations) initiate a discovery period to assess their current status. The Civitas team helps define the goals of the counselor and the practice. Several trading options are created and presented for discussion and selection. Then, a personalized plan – unique to that advisor and firm – coupled with specific solutions and ongoing support is established for a flat fee. Ultimately, Civitas reduces the overhead of your current custodian or B/D and scales solutions – e.g. marketing, compliance, technology, etc. – that benefit you and eliminate base point fees.

Horz: Can you discuss some of the differentiators of your advisor support model in more detail?

Malgeri: Our main differentiator is the open architecture allowing unlimited solutions that our team customizes to meet the needs of each advisor or RIA. Additionally, Civitas has been developed to incorporate an advisory branch that consults and plans for each advisor or RIA. The Civitas team will consult, design, execute and support advisors, RIAs, Fintech companies, banks and institutions ranging from $50 million to multi-trillion dollar businesses.

Horz: How exactly do you assess and strategically design a personalized business plan for each advisor or consulting firm client? What criteria and process do you use?

Horter: Leveraging our extensive consultancy, institution and advisory experience, we use a consultative approach that involves behavioral analysis and analysis of current state practices. We capture data points about the advisor, the team of advisors and the practice to frame strategic options in developing a plan. We break down our process into discovery, design, plan development, execution and support. Our experience is based on in-depth project management and Agile/Scrum methodology.

Horz: What is the range of support services that you offer to your clients?

Malgeri: We do not consider our offer as “services” but rather as “consultation” which encompasses personalized solutions that meet the needs of each client. Our range of solutions is limitless and Civitas builds them to suit Advisors, Registered Investment Advisors or Financial Institutions.

We start by offering culture, community and partnership. These pillars are the most important offering we can offer anyone. And from there, we deliver our Solutions Sphere.

Horz: Can you tell us about the extensive ecosystem of support services you have organized for your advisor clients and how you work with them as strategic partners in your efforts?

Malgeri: My team and I perform rigorous due diligence on every prospective supplier of strategic partners and only a select few partners make it to our roster list. We work with each strategic partner to tailor solutions based on our knowledge of the market and expectations of customer needs.

Horter: When we analyze an advisor’s practice, we not only look at their operations, compliance, practice management, OCIO services, etc., but we also work with all of our strategic partners to determine how we can help the consulting firm run more smoothly, grow faster while providing the quality of a balanced work/life relationship.

During the first year or two, we constantly coach, coach and improve the Advisor’s Strategic Business Opportunity Plan. Too many advisors work “in the business”, but do not work “in the business”. We can see opportunities and find solutions for them sometimes that they don’t see. We focus on achieving agreed goals and benchmarks.

Horz: General recommendations or advice that you would like to share with advisors and financial institutions on the development of their business development plans?

Malgeri: For advisors on developing their business plans, we generally recommend that you start by designing your vision 30,000 feet from your business to conceptualize your business model: create a vision board, establish your personal goals and commercial, as well as your brand and your story. With that as your base, break that vision down into segments, prioritize the segments from highest to lowest, create actionable tasks from your priority segment, and focus your energy on completing the highest priority tasks within your segment. We would work with advisors at every stage to help analyze, define and implement strategies.

Horter: For financial institutions, we want to be an extension of the institution and their basic services. They can “white label” our business development solutions and processes for the benefit of their current advisors or new advisors. Being able to offer up to ten hours in advance with an advisor discussing the process of developing their strategic business opportunity plan, without any upfront commitment, is a big selling point for advisors. They can see that we are doing our best to help them and the broker or RIA they are working with.

the Institute for Innovation Development is an educational and business development catalyst for financial advisors and growth-oriented financial services companies determined to lead their businesses in an operating environment of accelerating business and cultural change. We position our members with the necessary continuous innovation resources and best practices to drive and facilitate their growth, differentiation, and unique next-generation community engagement strategies. The institute was launched with the support and foresight of our founding sponsors – Ultimus Fund Solutions, NASDAQ, FLX Networks, Pershing, Fidelity, Voya Financial, Advisorpedia and Charter Financial Publishing (publisher of Financial Advisor and Private Wealth magazines).

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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