CASE STUDY
Jen, Independent Broker Dealer, $40M AUM
Jen is an advisor in the local office of a large Broker Dealer. She manages $40M in client assets. Jen uses a mix of direct mutual funds, BD model portfolios, and her own research to create solutions for her clients. Jen is unhappy with her current business model and feels that if she had the right structure in place, she could take more control of her life, better serve her existing clients, and grow her business.
Problems with Her Business Model
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Payouts are low to start with, and the process is a constant struggle with management.
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She has no home office administrative support. Her voice mail is full, and she always feels behind.
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Jen doesn’t have time or resources to further build her business.
Problems with Client Servicing
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Constant business turnover at the BD, which frustrates her clients as they are inundated with paperwork.
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Jen is unable to differentiate her business, thereby losing out on prospective HNW clients.
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High internal costs for client portfolios.
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Existing client servicing is always behind, and Jen is in danger of losing clients.
Jen was looking for a partner who could actually deliver on everything her BD had promised.
Specifically, Jen needed a trusted partner to guide her through her options and ultimately help her manage the transition from BD to fiduciary.
She was nervous about making a change, but knew she faced critical risks to her business if she kept operating in this suboptimal and increasingly outdated structure.
Invariant appealed to her because they could “deepen her bench” and truly support her practice--by bringing best-in-class technology solutions and implementing institutional quality portfolios for her clients.
Jen had three options.
1
Start her own RIA, and use Invariant as an insourced CIO.
2
Break away to a friendlier BD, and use Invariant to help manage the process.
3
Join Invariant Investment Management directly
as an advisor.
The Solution
Jen decided that she wanted to control her destiny and launch her own RIA, but she was afraid she would end up with even less support than she had in her current situation.
Invariant did a deep dive on Jen’s book of business and her plans to expand her client base. Invariant identified her goals, values, and investment philosophy and worked together to best align these with her new business venture.
Invariant mapped its portfolio solutions to her current clients and devised a strategy for handling taxable accounts. Utilizing their proprietary systems, they demonstrated how cash management needs from ACH inflows/outflows, Roth conversions, tax optimization strategies, and more would be handled. Furthermore, Invariant created solutions for her bigger clients, some of whom had concentrated stock positions with a low basis.
They also put her in touch with experienced and affordable attorneys to handle regulatory filings, plugged her in to their technology stack so she had the best tools at her disposal, and were there every step of the way to make sure things got done right.
The Outcome
Running her own RIA with Invariant’s iCIO partnership, client all-in fees have come down, Jen is making more money, and she can sleep well at night knowing she has a sophisticated team watching her back. Now on to the fun part: looking to bring this differentiated, best-in-class team to new and bigger clients.
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Clients’ All-in Fees Have
Gone Down Significantly -
She’s Keeping More of
What She Earns -
Her Administrative Problems
Have Been Solved -
She Spends More Time on
Building Her Business