The Missing (TD) LINC in your Practice

A high-level rundown of #NationalLinc 2020.

Invest in yourself. This was a key theme of this year’s TDAI Conference. Many sessions at Linc noted this as the key to moving your practice ahead in 2020. The advisor-client landscape is shifting to a hybrid of digital and human advice, and we need to dive deep into the technology systems that will help us create the best outcomes for our clients. The better you can leverage technology, the better fit you’ll be to manage the next generation of wealth.

Addressing the acquisition

First, let’s address the elephant in the room. We all know Schwab agreed to buy TDAI. This is a massive acquisition that will have an impact on all corners of financial services. The DOJ is examining the industry and right now, there’s limited engagement between the two companies because of all the regulations. First, the merger must pass an anti-trust review, which all parties involved are optimistic about. Then once the deal is final, the two companies can collaborate.

Tom Nally, President at TDAI, spent the better half of his opening remarks sharing insights on how the new resources will allow for investments into technology that will bring the best possible service to all clients. Since the two entities are currently competitors, leadership is taking its time to determine the long-term goals and the best path to get there. Will they change their tech platforms? They don’t know, but TDAI is committed to Veo One and will continue to add more capability, ultimately resulting in the retirement of the legacy Veo.

Many key decisions have not been made yet, and we’re looking at a 2-3-year time horizon for the integration between Schwab and TDAI to be complete. The great news that received a sigh of relief, Advisors will not have to repaper clients, and both companies are doing as much as they can electronically and urge current users to opt for electronic delivery of statements and mailings in preparation.

Regardless, rest assured, the best business model will prevail and will put clients first with RIAs.

Has Blockchain officially arrived?

Blockchain is not just for the kids. Ric Edelman shared research that shows most advisors do not invest their clients’ money in cryptocurrencies, but they should reconsider. He highlighted that simply allocating 1% of a client’s portfolio to Bitcoin could drastically improve their returns, and the downside is limited with just a 1% allocation. The successful future advisor needs to adapt to change and not be afraid of the new investment landscape. Crypto is emerging as a legit asset class to be considered, and our ability to weave it into a strategy for our clients is becoming essential.

Cutting-edge vs. bleeding-edge in FinTech

Too often, we jump at a shiny new solution that fails to fully address the problem. In our industry – with people’s livelihoods at stake – we need to avoid this at all costs.

Teri Shepherd of Carson Wealth advised when adding new technology, companies need a clear understanding of the problem they’re trying to solve. They need a clear roadmap, making the due diligence process a top priority. Don’t allow partners to over-promise and under-deliver. Make sure to be completely transparent throughout the process and ask for transparency from each vendor in return. If you approach it this way, you should end up with the right solution in the end.

Additionally, consider all possible resources available to you. If you’re a small, one-advisor shop, consider partnering with a roll-up RIA. Take advantage of their available tech stack. Conversely, if you’re larger, consider acquisitions or building in-house if you have the right ecosystem. Most technology partners have tremendous support available. Leverage these partners and consider them an extension of your team.

In summation, the line between cutting-edge and bleeding-edge in tech is blurred. Don’t be fooled by the bleeding-edge. Buying a solution so new and disruptive that it could fold in on itself at any point is a risk we shouldn’t be willing to take.

Preparing for the inevitable

In the final session we attended, Doctor Ian Bremmer shared his insights on where he sees our country going based on the current Geo-Political climate. After a well delivered global summary, the esteemed president of Eurasia Group cut to the chase: “We are in for a rocky couple of years, growth is slowing around the world and economic indicators point to a severe disruption to the gains we have become accustomed to expect.”

This is a great reminder to prepare for client meetings that won’t include rosy reviews of record-breaking performance. Treat this as an opportunity to focus on the value we can control. This perceived value will help to sustain our clients through an upcoming rough patch.