NEW YORK, Oct. 4, 2012 /PRNewswire/ -- NFP Advisor
Services Group, which provides technology, service and asset
management platforms to financial advisors, including RIAs and
hybrids, and is a business segment of National Financial Partners
Corp. (NYSE: NFP), a leading provider of benefits, insurance and
wealth management services, today published the results of a study
identifying the benefits of multidiscipline practices (MDP) to
clients and advisors, and exploring the unique obstacles that these
practices must overcome to achieve success.
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James Poer, President of NFP
Advisor Services Group, said, "As demand from clients and business
owners drives a shift in the industry toward a more comprehensive
approach to wealth management, the study finds that the most
successful financial advisors are proactively evolving their
practices to meet this demand. MDPs, with their diverse product
offerings, are uniquely positioned to thrive in this environment
given their ability to meet the high expectations of clients
seeking holistic financial guidance."
The study, commissioned by NFP Advisor Services Group and
produced by leading independent research firm Aite Group, reveals
that investors whose financial advisor delivered comprehensive
wealth management, including investment management, financial
planning and at least one insurance product report higher
satisfaction levels than those who work with financial advisors
through a narrower, single-product or single-service engagement.
For the purposes of this research, MDPs are defined as practices
deriving at least 10–15 percent of revenues from each of the
following products: insurance, investments, benefits and fee-based
financial planning services.
The benefits of building an MDP are numerous, although the
staffing and operational requirements of MDPs are complex:
- MDPs attract affluent clients with complex financial
needs: Investors surveyed who leverage MDPs to meet multiple
financial needs are more likely to be business owners and have
higher investable asset levels.
- MDPs experience higher client growth during challenging
market environments: In 2011, MDPs surveyed reported a 10
percent median growth in net clients while other practice types
reported median growth rates ranging from 5–6 percent.
- MDPs receive more referrals from and generate more new
revenue through professional partnerships: Just under half of
MDPs surveyed derive one-quarter or more of their 2011 revenue from
internal partner referrals while less than one-third of other
practice types derive as much of their revenue from partner
referrals.
- The most successful MDPs, based on revenue per client, have
teams with wide-ranging expertise: They distinguish themselves
from less successful practices with their larger staff, greater
focus on high net worth and ultrahigh net worth clients, and
diligent implementation of comprehensive financial planning
services. Smaller firms with less diverse practices need to find a
way to fill the gap as they grow.
- MDPs face unique staffing, sales and operational challenges
that they must overcome in order to achieve success: Practices
must find the right balance of solution experts, generalists and
support staff to carry out their vision of catering to their
clients' complete financial needs in the most productive and
profitable manner.
- There is limited access to integrated technology
solutions that can support more than one wealth management
area: Effective management of operating costs and enhanced
advisor productivity are critical to profitability.
Poer concluded, "To best navigate the complexities of running
such a practice, advisors should affiliate with a wealth management
firm that specializes in supporting MDPs and has a history of doing
so successfully. Advisors should consider the need for integrated
technology across multiple product lines and the ability to
leverage home office expertise to further enhance the range of
products and services offered in their practices. The end result of
an effectively-run MDP is more satisfied clients, who generate more
consistent referrals, higher retention rates and ultimately, a more
valuable practice."
View the complete results of the study at
www.nfpasg.com/multidiscipline.
About the Study
Aite Group's independent study – Multidiscipline Practices:
The Business Model of the Future – is largely based on the
results of two surveys. This includes a March 2012 survey of approximately 400 U.S.
financial advisors and their practices, with representation from
many types of firms (e.g., wirehouse, independent broker/dealers
and RIAs). In addition, a December
2011 survey of 1,000 U.S. investors sought to better
understand their wealth management preferences. This data has a
margin of error of 3 percentage points at the 95 percent level of
confidence. Separately, Aite Group conducted interviews with
five MDP owners to gather in-depth views on the benefits and
challenges of running their businesses.
About NFP Advisor Services Group
NFP Advisor Services Group, a business segment of NFP, serves
independent financial advisors whose clients include high net worth
individuals and companies by offering broker/dealer and asset
management products and services through NFP subsidiaries, NFP
Securities, Inc., member FINRA/SIPC, and NFP IndeSuite, Inc. NFP
Advisor Services Group attracts financial advisors seeking to
provide clients with sophisticated resources and an open choice of
products.
About NFP
National Financial Partners Corp. (NYSE: NFP), and its benefits,
insurance and wealth management businesses provide diversified
advisory and brokerage services to companies and high net worth
individuals, partnering with them to preserve their assets and
prosper over the long term. NFP advisors provide innovative and
comprehensive solutions, backed by NFP's national scale and
resources. NFP operates in three business segments. The Corporate
Client Group provides corporate and executive benefits, retirement
plans and property and casualty insurance. The Individual Client
Group includes retail and wholesale life insurance brokerage and
wealth management advisory services. The Advisor Services Group
serves independent financial advisors by offering broker-dealer and
asset management products and services. Most recently NFP was
ranked eighth on Business Insurance's 100 Largest Brokers of U.S.
Business; second on Business Insurance's Largest Agents and Brokers
Headquartered in the U.S. Northeast; as the ninth Top Global
Insurance Broker by Best's Review; operated the fourth largest
Executive Benefits Provider of nonqualified deferred compensation
plans administered for recordkeeping clients as ranked by
PlanSponsor; operated a top ten Independent Broker Dealer as ranked
by Investment Advisor; had three advisors ranked in Barron's Top
100 Independent Financial Advisors and is a leading independent
life insurance distributor according to many top-tier
carriers. For more information, visit www.nfp.com.
About Aite
Aite Group is an independent research and advisory firm focused
on business, technology, and regulatory issues and their impact on
the financial services industry. With expertise in banking,
payments, securities & investments, and insurance, Aite Group's
analysts deliver comprehensive, actionable advice to key market
participants in financial services. Headquartered in Boston with a presence in Chicago, New
York, San Francisco,
London, and Milan, Aite Group works with its clients as a
partner, advisor, and catalyst, challenging their basic assumptions
and ensuring they remain at the forefront of industry trends. Aite
Group is not affiliated with NFP or its subsidiaries.
SOURCE NFP