Why Not Build These Capabilities In-House?
This is a common question. Many advisors aspire to the success of large firms like Pinnacle Advisory Group. When they look at how large firms are constructed, they see a full array of in-house capabilities and conclude they must also build those capabilities in-house. What they do not recognize, however, is that those firms built in-house capabilities because there were no outsourcing alternatives in the past. Today, firms like Pinnacle regularly review those alternatives for two reasons: first, we understand that our strengths are in providing clients with wealth management services and not necessarily in certain specific functional capabilities; and, second, who wants to manage all those additional headcount and technologies when someone else can do it better. If we can see the value of outsourcing at $1 billion plus, then smaller firms must also … arguably more so.
Is Pinnacle A Turnkey Asset Management Program?
The Pinnacle Solution is a much more comprehensive business solution than the traditional turnkey asset management platform (TAMP). Our goal is to be the “Intel-Inside” that enables the non-client-facing activities of your business so that you can focus on your clients and on building your business. We deliver a twofold value proposition: first, we free 40-80% of your time by providing investment and back office solutions and then help you use that time effectively to achieve your personal and professional goals by providing private label marketing communications, strategic business consulting and continuity planning. By contrast, most TAMPs offer a basic platform that allows you to construct a portfolio from a menu of investments, execute associated trading and produce consolidated reporting for clients.
Wouldn’t I Be Better Off with a TAMP?
We regularly receive inquiries from advisors who are disappointed with TAMPs. The most common complaints follow. Time savings are not there because the solution still leaves the advisor responsible for investment research, many back office activities, marketing communications, consulting, and continuity planning. They cost too much. Service levels are poor. Investment performance is poor. There is no access to senior management or money managers. The TAMP is putting its brand between the advisor and its clients.
Who Should Consider Pinnacle?
Independent Advisors Seeking Growth
We regularly speak with advisors in their late-40s or early-50s who have not achieved the growth they would have expected by this stage of their careers and who realize that their business practices must change so they can achieve their own professional goals before retirement. With that said, there is no reason why younger advisor focused on growth cannot also participate.
Independent Advisors Seeking Lifestyle
The trade press writes article after article speculating that the aging advisor population will lead to massive consolidation. We speak with hundreds of advisors each year and have yet to meet an advisor who wants to sell his or her practice. Instead, advisors want to continue working with clients well into retirement. We regularly speak with advisors in their 60s looking for a solution that will free their time to enjoy a retirement lifestyle and a continuity planning solution that reassures clients they will be cared for and that ensures your family will receive fair compensation for your life’s work should something happen to you..
Wirehouse Advisors Considering Independence
There are advisors leaving wirehouses and broker-dealers every day. Surveys tell us that more than 90% are happy they made the leap and that they wished they had done so sooner. The breakaway advisors that we speak with and that we have helped were looking for someone to hold their hand: to educate them on their options, to walk them through the process and to provide a turnkey solution that allows them remain focused on clients.
Advisors Looking for a Better Investment Solution
The investment environment has been difficult. Indeed, it has challenged the theoretical and practical effectiveness of the most commonly used investment solution in wealth management: Strategic Asset Allocation / Modern Portfolio Theory / Buy & Hold. Pinnacle came to this conclusion more than ten years ago and successfully made the transition to a more risk-managed tactical investment program. We have achieved a ten-year track record of beating the benchmarks with less risk after all investment expenses and our management fee. Plus our program was designed for advisors by advisors and can therefore address many of the tax, legacy asset and multiple account circumstances that advisors encounter so often.
How Does It Work?
Good news! Its very simple. You simply name Pinnacle Advisory Group as sub-advisor for your clients. Your custodian remains the same. Client account numbers remain the same. Custodian reporting to clients remains the same. By making Pinnacle sub-advisor, your clients are granting permission for us to execute the daily download and reconciliation of client accounts, determine whether re-balancing is required, execute trades and allocate trades across multiple accounts according to our proprietary tax location methodologies. Should you ever decide to part company with Pinnacle, the primary advisor simply removes Pinnacle as sub-advisor and once again … Your custodian remains the same. Client account numbers remain the same. Custodian reporting to clients remains the same.
Will I Maintain My Independence?
Yes. We started Pinnacle Advisor Solutions because we realized the economies of scale would play a greater role in an increasingly complex and competitive wealth management business. If true, smaller advisors would be disadvantaged. In the past they face two choices: join a larger firm with greater resources or partner with a similar sized firm, pool resources and divide labor. We have created a third option on the menu. Now smaller advisors can maintain their independence and remain competitive by leveraging our resources at a cost effective price.
Won’t You Steal My Clients?
No. If we did we would not be in business for very long. And to reassure the skeptical, we say so in our standard agreement. We will not solicit existing clients during or following our relationship.
Does the Pinnacle Solution Work with All Custodians?
Pinnacle can seamlessly work with any one of the big four custodians: Schwab, Fidelity, TD Ameritrade and Pershing. We are also confident we can work with most other custodians. With that said, not all custodians are either as accommodative to advisors or have the technology to make such a relationship work as readily as the big four custodians. Once Pinnacle and a prospective advisor have decided to pursue a relationship, we will take the steps necessary to work with the broker-dealer to make the relationship work.
Does the Pinnacle Solution Work with Broker-Dealers?
Yes. Every broker-dealer is different but assuming they are cooperative, this should be no problem. Once Pinnacle and a prospective advisor have decided to pursue a relationship, we will take the steps necessary to work with the broker-dealer to make the relationship work. With that said, our marketing communications may need to be reviewed by the broker-dealer before publication.