ADVISOR FORUM

F&D Advisors Delivers Complete Wealth Picture to Affluent Clients More Effectively

F&D Advisors (FDA), which specializes in wealth management for affluent clients and their families, has been using SPT products since its founding 10 years ago. Liz Goodrow, Senior Client Care Associate, explains that to serve multi-generational clients, the firm needs a complete view of their assets, which often include a wide range of holdings from many custodians. Until FDA learned of ByAllAccounts, however, assembling that complete view took three people three days each month.

ByAllAccounts specializes in reconciliation-ready data for advisory firms. Since FDA began using the ByAllAccounts Custodial Integrator with PortfolioCenter, its data aggregation process has become far more efficient, freeing up time for client service and providing scalability for the firm to grow. Read the interview that follows to find out how FDA has gained productivity and even increased assets with ByAllAccounts.

F&D Advisors

Providing a complete picture of each client's assets is a cornerstone of good wealth management. Goodrow tells how ByAllAccounts helps track the assets of affluent clients by vastly simplifying the data aggregation process.

SPT: Can you give us a glimpse of your firm and how you work with your clients?

Liz Goodrow: We have approximately 300 client relationships, including multi-generational families. A client relationship may include the patriarch, his kids, their families, and even his parents. We work with all family members, from those in retirement to new college graduates. Our average client has between $2.5 million and $3 million in investable assets.

SPT: With such sophisticated clients, you must work with a lot of custodians. How many?

Liz Goodrow: We receive direct downloads into PortfolioCenter from five custodians, and this covers approximately 90% of the assets. ByAllAccounts gives us access to about 50 more custodians.

Fueling Growth Through Data Aggregation

Data aggregation and reporting have added value to client relationships and fueled growth for the firm. Giving clients a complete picture of their wealth has increased client satisfaction and retention while bringing in new assets and clients, Goodrow says.

SPT: What is the value of collecting data on the remaining roughly 10% of the assets you manage, for which you don't have a direct PortfolioCenter interface?

Liz Goodrow: Part of good wealth management is being able to view our clients' total portfolios, including assets like life insurance, annuities, or company retirement plans. This also allows our clients to see the entire picture, and that value-add is key. It differentiates us from a lot of firms

SPT: Have any clients been concerned about privacy issues?

Liz Goodrow: Privacy can be a hurdle for clients, as in any business relationship. However, our clients understand that our entire relationship is based on trust. Therefore, it is very rarely an issue that cannot be overcome.

SPT: How do your advisors use that information?

Liz Goodrow: It helps them calculate net worth, determine allocations and rebalance portfolios.

SPT: How do you report on the held-away or non-managed assets?

Liz Goodrow: In a couple of ways. We include held-away assets on a net worth statement to review as a part of a client's financial plan. Sometimes we will show their performance on those assets to contrast and compare to the assets we manage.

From time to time, reporting on these assets leads us to begin actively managing a client's 401(k), for instance. We then disclose this in our investment policy statement and/or contract.

SPT: Can you share more detail about how you show the difference between managed and unmanaged accounts on your PortfolioCenter reports?

Liz Goodrow: For the accounts we're not managing, we'll set up a separate group, for instance, the five outside accounts that are managed by ABC Advisors. We can run reports on the outside group and compare it to our managed assets. This allows us to compare asset allocation, fees, and risk of outside portfolios. This is a marketing tool for us, and over time can lead to new billable assets. For example, we had a client come on board about five years ago with $1 million managed by us. He's now a $10 million client partly because of the value of showing him his total portfolio.

Our clients also talk with their friends and say, "My advisor gives me a complete monthly report of every investment I have. You're getting a report on just the assets your advisor manages? You need to talk to my guy."

SPT: How has data aggregation affected your firm's growth?

Liz Goodrow: It has increased profits, as well as client satisfaction and retention rates. It's also helped with referrals and gathering more assets. If a client has assets held through another money manager, our ability to get downloads from the custodian and show the client's entire net worth has helped us with our marketing and management.

Efficient Data Aggregation Frees Time For Client Service

Goodrow explains how time-consuming it was to aggregate data manually and how ByAllAccounts has simplified FDA's workflow. Now, data aggregation can be performed by one person, freeing up time for client service.

SPT: Before using ByAllAccounts, how did your firm download and reconcile custodial data?

Liz Goodrow: Prior to using ByAllAccounts, on the first day of every month, we would log into Web sites and print screens with the transactions, holdings, and market value or pricing as of the end of the month. This was done for almost 200 accounts. Three people would spend three full business days doing nothing but data entry. It was very labor intensive.

SPT: Did you decide to start using ByAllAccounts mainly to save time?

Liz Goodrow: Saving time was a large part of our decision to use ByAllAccounts. It was valuable to have the capability to download transactions daily. Reconciliation is still a work in progress, but we now can concentrate the workflow with one dedicated person who has daily responsibilities, versus three of us for three days.

SPT: How did you hear about ByAllAccounts?

Liz Goodrow: One of our friends from Schwab Performance Technologies told us about it and we signed up to be beta testers. It's gone very well since then.

SPT: How easy was it to integrate into your work?

Liz Goodrow: We went live with it as soon as we were able to enter new accounts. If we had not, we would have had to do the printing and manual entry again at the end of the month. As you can guess, we were pretty motivated.

SPT: What kind of support do you get from ByAllAccounts?

Liz Goodrow: ByAllAccounts is very responsive. If we have any issues, we send a screenshot showing what the error is, and they typically fix it within 24 to 48 hours.

SPT: How do you use the time you've saved?

Liz Goodrow: Now our Client Care Associates spend more time dealing directly with clients—which I'm very excited about.

SPT: What about your ability to add new accounts?

Liz Goodrow: To put it in perspective, two years ago, we were tracking 200 accounts manually, amassed over a period of seven years. In the last two years, we've added another 150 accounts, but are aggregating the data in less time.

SPT: Did you evaluate other aggregation options?

Liz Goodrow: We looked into outsourcing, but when we compared the offer, cost and time involved, we went with ByAllAccounts. It has simplified our workflow tremendously.

Sharing Best Practices For Using ByAllAccounts

Goodrow shares best practices she and the firm have learned in two years of using the solution.

SPT: What best practices would you recommend for leveraging ByAllAccounts?

Liz Goodrow: The only thing I would do differently is to set up clients in the ByAllAccounts WebPortfolio tool based on URL, not on individual client relationship. For instance, for those with Fidelity 401(k)s, I would set up a client called 401k.com—that's Fidelity's 401(k) URL—and I would list all applicable accounts under this URL. Any problems usually stem from the Web site, not the individual account. Therefore, if I have a problem with 401k.com, it probably applies to 15 to 20 accounts. I can go into the client, 401k.com, and run a manual download once, versus going into 15 to 20 accounts as set up by family relationship.

SPT: What other suggestions do you have?

Liz Goodrow: Another suggestion is to wait to start the ByAllAccounts download process until after lunch. By about 1 p.m. Eastern, ByAllAccounts has received most or all of the data so that all can be downloaded automatically. The later in the day we wait, the less chance we have to do manual entry.

A third tip is to make sure you have legal documentation. We ask our clients to sign a legal document authorizing us to have Web access with the URL, their ID and password listed. They understand what we're going to do—and not do—because we disclose everything.

SPT: Those tips will be helpful to any firm that aggregates data. Thank you very much, Liz.