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Rating:Independent Advisors Looking to Internally Manage Growth, SEI Forum Finds Not Rated 3.0 Email Routing List Email & Route  Print Print
Thursday, March 15, 2007

Independent Advisors Looking to Internally Manage Growth, SEI Forum Finds

News summary by MFWire's editors

Growth is both a blessing and a curse, said advisors at a recent forum hosted by SEI (Nasdaq: SEIC), a leading global provider of outsourced asset management, investment processing and investment operations solutions. The SEI Advisor Network's Advisor Growth Forum assembled 25 of the company's fastest-growing advisor clients to discuss current challenges and share best practices as they strive to grow their businesses.

Attendees belonged to a diverse mix of firms, e.g. solo practitioners, niche advisories, ensemble firms, family firms, etc. Despite different characteristics, however, all pointed to a need to invest in firm infrastructure including operations and staffing to enable growth.

"There comes a critical point in the evolution of your firm when you realize your current structure or model just won't accommodate growth," said Paul Salisbury, Insight Group on Salt Lake City, Utah. "The more we grew, the exponentially more difficult things like maintaining client service, overseeing budgets and running day-to-day operations became to manage."

Advisors noted that they had begun or recognized the need to begin focusing on specific areas of their businesses. Some issues discussed included:

* Standardization of processes. As advisors' practices grew, their processes didn't grow with them. Particularly with specific client exceptions, the gaps in service and inefficiencies increased. By implementing standards and systematizing operations and outsourcing functions, however, they were able to improve efficiencies almost instantly.

* Integration of systems. Most advisors use multiple systems for different functions of their business -- financial planning, aggregation, custody, etc. -- resulting in increased cost and time to the advisor. While advisors acknowledged that integrating all systems might not be realistic, they noted that exploring ways to consolidate disparate systems was extremely beneficial.

* Expansion of business management. Many advisors said they were considering hiring a COO or general manager to oversee operational aspects of their business. Yet in doing so, advisors are presented with new challenges -- quality staff is becoming increasingly difficult to recruit and/or afford.

* Growth - Lifestyle dilemma. Though all advisors attending were in "full growth mode," most stressed that not compromising their current lifestyles was a top priority. Time, income and quality of life were all factors they considered in their struggle to manage growth.

* Analyzing cost of client relationships. Because clients' demand for service has increased over the past few years, say advisors, they dedicate more time per client. By comparing time spent to the value of each relationship, advisors can pinpoint opportunities to increase profitability and free up time.

* Better understanding of existing technology. Many advisors felt that gaining a better understanding of the full capabilities of in-house technologies was critical to finding more time to spend with clients and prospects.

* Focused marketing programs. Although the majority of advisors still rely heavily on referrals, many are realizing the need for structured, proactive marketing programs to obtain new clients. They are investing in numerous traditional marketing vehicles, particularly public relations campaigns.

According to another recent survey by SEI, 43 percent of advisors attributed growth to their decision to outsource investment processes, a common theme among growing firms.

Guest facilitator Mark Tibergien, principal of Moss Adams, spoke on barriers to growth advisors face nationwide, as well as leading targeted work sessions. Cautioning advisors about their investment in infrastructure, Tibergien challenged attendees to ask themselves whether or not they're growing at the right pace, are growing with the right clients or are you adding overhead to support the wrong clients.

Steve Onofrio, Senior Managing Director, Sales and Support, SEI Advisor Network, also led sessions aimed at understanding operational challenges.

"The growth-oriented advisor experiences a unique dilemma," said Onofrio. "The more successful they are, the harder their jobs become. That's why it's critical to look to long-term infrastructure investment to correct this imbalance."

Participating firms, all of which had more than $200 million in firm assets, attended the forum because of their expressed interest in organizational, platform and structural issues associated with growth.

About SEI Advisor Network

SEI Advisor Network provides independent advisors with outsourced wealth management platforms that are designed to meet the demands of a new generation of wealthy clients. In an evolving wealth management industry, the group offers an end-to-end process for successfully transforming their clients' businesses in every critical area, including marketing, practice management, investment strategy and client relationship platforms. The SEI Advisor Network is a strategic business unit of SEI. For more information, visit http://www.SEIAdvisorNetwork.com.

About SEI

SEI (NASDAQ: SEIC) is a leading global provider of outsourced asset management, investment processing and investment operations solutions. The company's innovative solutions help corporations, financial institutions, financial advisors, and affluent families create and manage wealth. As of the period ending December 31, 2006, through its subsidiaries and partnerships in which the company has a significant interest, SEI administers $366.6 billion in mutual fund and pooled assets and manages $181.5 billion in assets. SEI serves clients, conducts or is registered to conduct business and/or operations, from more than 20 offices in over a dozen countries. For more information, visit http://www.seic.com. 

Edited by: InvestmentWires Staff, 

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