The latest Secrets to Scale features Clint Sorenson, Co-Founder and Partner of WealthShield. WealthShield has been a LibertyFi partner for over five years and was created to put investments back into the hands of investment advisors.
Click here to view Clint's podcast episode or read some highlights from Alli and Clint's conversation below.
“We saw the growing demand of advisors going independent and needing the support they were leaving behind.”
Building a firm that drives positive impact
WealthShield’s goals from the beginning were straightforward. After witnessing the huge independence trend five years ago, when advisors were moving away from big firms and starting their own firms, the WealthShield team realized that these new RIAs were leaving behind a lot of services that they may have taken for granted – including investment management. WealthShield was established to provide third-party investment consultant services for RIAs.
Understanding the advisor and the end clients
WealthShield begins by listening and understanding an advisor's business and the clients they work with. The team digs deep by asking a variety of thought starters, including:
- What's your client experience like?
- What are they used to?
- What do they like, not like?
- What’s their demographic?
- Are they ultra-high-net-worth?
During the first few weeks of onboarding, WealthShield works very closely with the RIA to understand who the advisors are, what their clients are like, what their experience is, etc.
WealthShield also takes time to understand the end client (investors). Each client goes through a behavioral profile, which helps WealthShield determine how emotional vs. logical a client is when it comes to their money, to then build an appropriate portfolio.
Overall, WealthShield believes strongly in rules-based portfolios, and implementing technology that removes discretionary decisions. This helps to eliminate emotional reactions advisors or clients could have.
Direct indexing + UMA case study
Every client looks different. For clients with large account balances, the WealthShield team found that UMA technology coupled with direct indexing was a good tool because it allows for more customization with these complex portfolios. For example, if an RIA adds a new client with concentrated equity positions, and they want to balance that out of sell out of that over time into a more diversified portfolio.
Direct indexing allows advisors to pick an index that fits with a client’s overall goals and allocation. By incorporating direct indexing to help with the tax overlay, WealthShield can help automate tax-loss harvesting to build up a loss reserve and reduce a complex position. Clint and his team feel that leveraging direct indexing, and combining it with more active strategies, tactical strategies, and other pieces that fit with that client's goals is why the UMA is a game-changer.
A differentiator: alternatives
When it comes to alternatives, it’s all about the complexity. The ultra-high-net-worth clients need a differentiated experience. Advisors are competing against large firms who tout access, and WealthShield helps advisors compete and win business against these big firms. The WealthShield team has sourced and added high-performing funds, that have greatly helped diversity clients’ portfolios.
Clint’s #1 tip for achieving scale
Clint shares actionable tips throughout the podcast, and one takeaway to remember is this — independent advisors should focus on doing what they’re best at. In Clint’s opinion, that is bringing in clients, acting as the family CFO, nurturing relationships – and then outsourcing everything else.
The decentralization trend is moving rapidly within the industry, and according to Clint, “It’s the best time to be an advisor.”
To learn more about WealthShield, and to subscribe to their monthly market trend report, visit https://www.wealthshield.co/.