Your Virtual Ensemble®

Overview

In the September 2005 issue of Investment Advisor, our founder coined the phrase Virtual Ensemble® to help describe FocusPoint’s service offering.

In his words:

The solution to many advisors’ dilemmas may be a Virtual Ensemble®, a group of independent advisors from around the country, who have similar business philosophies and have consolidated all non-client-related activities through a completely Web-based centralized engine. This Virtual Ensemble® could be set up as some sort of co-op arrangement. Another possibility would be to outsource various functions to a variety of providers.

If the main job of an advisor is to serve clients and build the business, it seems that a virtual turnkey business solution would free the advisor to do just that. Interestingly enough, as we have implemented the Virtual Ensemble® structure, we have found that this model works not only for solo practitioners but also for groups of advisors, even traditional ensembles. Wrapping the Virtual Ensemble™ support system around a traditional ensemble practice adds even more operating leverage to the equation. For solo practitioners, the Virtual Ensemble® creates an alternative to the traditional ensemble. With a streamlined business, breaking through the million dollar mark may not be necessary to match, or even exceed, the industry profitability benchmarks.

Critical Elements

Regardless of the specific solution, here are some of the critical elements we believe should be incorporated into the Virtual Ensemble® concept:

• Advisors would own and operate their own RIA. This allows them to maintain their identity within their own community and continue developing their own brand.
• Advisors should be able to choose a broker/dealer affiliation, provided their b/d allows them to operate an outside RIA.
• The Virtual Ensemble® structure should be invisible to the client who should only have a relationship directly with the advisor.
• The core of the Web-based engine should be a fully integrated client relationship management and portfolio management system.
• Ideally, further leverage would be obtained by providing advisors with virtual document management technology to allow them to have truly Web-based, paperless offices.
• All investment research would be centralized, but advisors should be able to fully participate in the investment selection and management process, if they so desire.
• Each advisor would have investment discretion for his clients.
• The system would provide the ability to manage all of the client’s assets, regardless of size or type of account.
• The system would provide real-time tracking of all back-office activities, including account transfers, trades, and client distributions.
• The advisor could run all investment proposals and reports via the Web, at any time and from any place.
• Instead of focusing on research, trading, downloading, reconciling, reporting, portfolio management, and monitoring, advisors would spend their time developing client relationships and growing their businesses.
• High quality client communications and reports should be provided that would go out under the advisor’s signature and branded with their firm’s logo.

Make It Easier

• Practices with assets under management of up to $40 million to $50 million should be able to easily operate with only a single staff person.
• Transition guidance and coaching, along with a team of transition specialists should be available to help the advisor make a quick and profitable transition to the fee—based business model.
• Ongoing business coaching would help advisors maintain a profitable business while finding a balance between their personal and professional life.
• The Virtual Ensemble® would have the scale to continue developing systems and the resources to purchase state-of-the-art technology that would be prohibitive for individual advisors.
• Advisors in the ensemble would have the scale to obtain compliance services, marketing support, case design, and financial plan writing services utilizing top talent while paying preferred rates.

Think of FocusPoint as your Virtual Ensemble®, allowing you to enjoy all of the economies of scale and synergy of a traditional ensemble while keeping your independence and remaining in control of all decisions relating to your business.