Who Controls Your Data?

With Strategic Blueprint You Own Your Data, Keeping Your Options Open to Benefit You, Your Business and Your Clients

Over the years, a few trends have significantly impacted financial services.

One is the rapid advancement of technology. Thanks to modern tools and solutions that save time and facilitate better client service, firms and advisors are operating with more scale than ever before.

Another is consolidation. Businesses in this industry have always come together, going back decades, so consolidation by itself is nothing new. But the amount of money private equity firms have invested in our space is a notable shift from the past.

Lastly, advice-based models have taken off, leading many advisors to consider launching RIAs. Most industry insiders expect this trend to accelerate, with advisors likely to continue to flee wirehouse models in the future to set up their own advice-based businesses.  

At first, having one’s own RIA seemed like a no-brainer, not only from a business standpoint but from a compliance perspective. Today, though, the calculus has become less straightforward as operational costs and regulatory pressures have begun to rise. As a result, partnering with a corporate RIA is gaining more traction.

But what’s the best path? Is it a firm like Strategic Blueprint and its ‘plug-in’ approach that allows advisors to leverage our infrastructure while maintaining more flexibility and control? Or, instead, is it the ‘tuck-in’ route, which compels advisors to join an existing ecosystem? 

In the first of our three-part series examining the main differences between these options, we consider one big consideration: Who controls your data?

With Strategic Blueprint, advisors own CRM data and, with an appropriate agreement in place, have continued access to firm and custodial information. That contrasts with some tuck-in models, where firms exercise total control, in some instances, spelling it out in IAR agreements and privacy policies that client data is theirs. 

Granted, while the tuck-in approach can be ideal for anyone leaving the industry altogether or those wanting to focus on serving clients versus the day-to-day responsibilities of being a business owner, control of data is a significant concern. 

Think about any advisor wishing to sell their book of business. It’s hard to believe that any buyer will pay top dollar for something the seller, for all intents and purposes, doesn’t own.

An equally important consideration is advisors wanting to keep their options open. While many like the stability of being affiliated with the same firm forever, the reality is that advisors will continue to move as their businesses evolve and more responsive platforms become available, especially as private-equity-driven consolidation continues unabated.

Even in the best-case scenario, transitions can be protracted, taking more than a month to complete. But when advisors don’t have control of their data (leaving aside all the issues related to broker protocol), the process is slower still. It largely depends on clients reaching out to the advisor and vice versa, and even then, it’s a very tedious, time-consuming and manual-driven process.

The fallout? Advisors are unable to generate revenue, and clients cannot access advice about their investments – which during times of heightened market tumult (such as the opening months of this year) could have significant ramifications.

Everyone wants to have options. It doesn’t matter whether it’s something as frivolous as a dinner menu or as life-changing as an independent advisor looking for an RIA partner. That’s what being able to control your data comes down to – keeping your options open – and it’s why Strategic Blueprint’s approach is a better way for anyone seeking true independence. 

David Pittman is the Executive Vice President of Strategic Blueprint, an independent RIA with an affiliation model geared toward truly independent-minded advisors.

This article is part of WSR’s Sponsor Partner Content series.