Who Controls Your Investment Management Process?

Some firms will make this decision for you. Not Strategic Blueprint

In our last piece, we noted the increasing popularity of corporate RIAs and examined the ways to partner with one.  

Is it an option like Strategic Blueprint and our ‘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?

As part of that discussion, we focused on who controls your data – you or your firm? Now, it’s time to set our sights on another crucial factor that often defines the relationships between RIAs and advisors: Who controls your investment management processes?

Approach and product flexibility 

Answering this question, in part, depends on whether you have the freedom to pursue your preferred investment approach because, with tuck-in models, it’s often my way or the highway. In other words, management is centralized.

Before going any further, it’s important to note that some advisors could be very well served by a tuck-in or even a dually registered firm that allows them to leverage brokerage solutions or offer advice depending on the client’s preferences and circumstances. (The Strategic Financial Alliance, which is part of the same family of companies as Strategic Blueprint, is a good example of the latter).

For instance, if you have limited resources and are still working to take your businesses to the next level, affiliating with a firm like that would allow you to focus your energies on serving clients and achieving growth – all while maintaining your independence and having access to a diverse set of options.   

For others, though, investment management strikes at the core of who they are – and they wouldn’t surrender control of it to anyone. That includes advisors who prefer to:

• Manage every client portfolio (Advisor as PM), doing all the research, due diligence and everything else that goes into that process.

• Utilize subadvisors, devoting their time to managing the managers who oversee all or a portion of client portfolios.

• Work under subscription agreements, offering advice to clients but not managing the actual investments.

Your overall rationale for choosing one of the above investment management models may vary from your peers. But typically, the ultimate deciding factor comes down to following the path that allows you to best meet the specific needs of your clients.

Meanwhile, variety and selection are the other factors that determine who has control over your investment management process. Does having a limited number of proprietary or products from which to choose truly support an Advisor as PM investment model? Not really.

At the very least, that would require having a wide variety of models at your disposal, not just a few of them. It would also mean that you’d be able to create your own models from a more expansive list of non-proprietary products and investments – which many firms either don’t have the relationships to accommodate or will not allow.  

Your vision and your clients 

When selecting the best corporate RIA partner, there isn’t necessarily a wrong answer. But when you think about the vision of your practice, how you want it to evolve, what your end games is and the needs of your clients, it’s important to remember that investment management is an essential component of that equation.

Julie Sullivan is the 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.