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Cloud Technology Blog for RIAs and Broker-Dealers

External IT News Round-Up 3/27 to 4/2

4/1/16 12:20 PM / by Alexander Lapa

A weekly round-up of everything you need to know.


As an added service for our blog readers, External IT provides a weekly round-up of the stories you need to know in the financial industry.

The list of top advisors at the country’s biggest brokerages has changed massively since last year. Breakaway brokers might want to ask themselves three simple questions before they commit to a path. RIAs should not assume the Department of Labor’s impending fiduciary rule will have no impact on their businesses. LinkedIn has a new tool that may improve advisors’ success with prospecting. And there are at least 15 reasons why companies should embrace the cloud.

The Financial Times published its annual FT400 list of the most successful advisors working at wirehouses and major regional broker-dealers. Tepid economic growth, volatile stock markets and interest rate stress have combined to shake up this year’s list. Unlike the previous three years, only half of the advisors from 2015 returned in 2016. Advisors are chosen based on a formula using assets under management, years of experience, compliance record and other factors. The median advisor on the list manages over $1 billion, and the average advisor there has been practicing for 26 years.


The Wall Street Journal posted a column by Norb Vonnegut about how breakaway brokers can decide whether to start their own RIA or join an existing firm. He suggests they ask themselves the following: “Am I an entrepreneur?” “Have I compared the economics?” And, “What does my spouse say?” If you lack a burning passion to start your own firm, you might be better off at someone else’s RIA. If you don’t need a recruiting bonus and foresee high client retention, keeping 65% of revenues may be worth starting up shop yourself. But if your spouse says you are a disorganized person, rethink taking on the burden of business ownership, Vonnegut warns.


WealthManagement.com ran an opinion piece by Ed Gjertsen, chair of the Financial Planning Association, on the need for RIAs to prepare for the DOL’s fiduciary rule on retirement advice. He warns that the DOL rule likely will increase some requirements that RIAs already follow as part of the SEC’s 1940 Act. The new rule’s “best interest contract exemption,” for example, may call for a different approach to collecting fees on IRA rollovers. RIAs also might want to adjust their marketing strategy, since, once the rule is finalized, clients could struggle to discern what differentiates advisors if they all follow a fiduciary standard on retirement guidance.


InvestmentNews reported on how the social media platform LinkedIn has opened its ProFinder feature to advisors. Users searching for CFPs, CFAs, CPAs, insurance experts and other financial professionals can sort through a list of recommended candidates. Yet advisors should note that most LinkedIn users seeking help in this manner will be firmly middle market and not high-net-worth prospects, according to the article. However if advisors do hope to gain clients through ProFinder, they ought to fill out their LinkedIn profiles with enough detail to appear in the search function.


Forbes published a lengthy article offering 15 reasons why corporate financial departments should migrate onto cloud platforms. The piece explains that doing nothing risks putting firms at a competitive disadvantage. A few of the reasons given are: mobile enablement and social collaboration; scale and hyper growth; as well as avoiding costly onsite upgrades and infrastructure investments. These benefits also apply to wealth management firms. The piece ends by asking CFOs how much longer they can afford to wait before entering the cloud.


External IT recognizes that your practice strives to combine stellar financial advice with high quality technology, while abiding industry regulations. We hope you found this news round-up useful.

Topics: News, Technology, Breakaways, Trends

Alexander Lapa

Written by Alexander Lapa