New Ways to Prosper in a Changing Market Environment

What if there was a way for you to get paid on managed assets without studying for your Series 65 test?

There was a time when mutual funds, insurance, and annuities ruled the world of investment options for financial professionals, and only the biggest institutional or qualified investors had deep enough pockets to utilize wrap accounts. Today, you can open a managed account with a zero balance. The DOL, along with the regulatory agencies, encourage clients to move to wrap account platforms and away from commissioned products. The landscape is even harder for insurance and annuity specialists. Adding fuel to the fire, you're going to come across clients with poor health, who aren't good candidates for a lifetime annuity. With other clients, you're likely using FIA's to cover a percentage of their portfolio - perhaps just enough to cover their fixed expenses. This means you're leaving money on the table for another financial professional to invest.

Massachusetts, for example, has a program designed just for you in these situations — the Solicitor's option. The state gives us few gifts, but this is a great business-building opportunity.

This Solicitor's option is designed specifically for accountants, attorneys, and insurance specialists who want to help a client with their particular area of expertise and then refer the client to an investment advisor or wealth manager to manage the rest of the portfolio. As the Solicitor, you are paid in perpetuity for these accounts, allowing you to build an additional ongoing revenue stream from your existing client relationships. As the client's portfolio grows, so does your income from the ongoing management fees.

In this arrangement, the wealth manager is giving up a percentage of their fee in order to gain access to a new client. The client does not pay any more than they would if they went straight to the investment specialist. It's good for the client since you're introducing them to an advisor that you vetted. And it's good for the wealth manager because they gain a new client. The new revenue benefits the annuity/insurance specialist. It's truly a win-win-win situation. 

There is an application fee and a process that involves a background check. The annual renewal of $50 allows you to maintain your IAR status as long as you want to continue receiving the revenue. Please note that not all wealth managers are well-versed in the state's process, and not all broker-dealers allow their advisors to participate, so choose your investment partner wisely.

Once you are approved through this program, you are listed on the SEC site as an IAR; however, Massachusetts categorizes you as a Solicitor, so you aren't able to choose investments or actively participate in meetings. It's like a relay race - you do your work and then pass the baton on to the wealth manager for the portfolio management. Just make the introduction and wait for your check to arrive from the RIA.

For more information on becoming a Solicitor, join us at our next RIA Academy and learn about your options. 

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Jill Anderson - Senior Vice President of Business Development, The Patriot Financial Group

Jill specializes in coaching CPA’s and Attorneys to help clients receive holistic and coordinated financial planning services. “Jill has decades of experience and provides a valuable resource to our advisors. With her track record we are confident that she will elevate our advisory practices to new levels,” said Dave O’Donnell, Founder of The Patriot Financial Group. She works with accountants, attorneys, insurance companies, lending institutions, and other professional partners to incorporate financial services into their firms to better serve their clients and provide a valuable resource. With a team approach, clients always have access to the experienced specialists who are in the best position to offer creative solutions to their unique financial challenges. The Patriot Group’s fully independent advisors provide help with Retirement Planning, Wealth Management, Business Owner Planning, 401(k) plans, Group Employee Benefits, Tax Planning, Legacy Planning, and Risk Management.

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