Asset Management as a Value Add: How RIAs Can Leverage Investment Resources to Help Advisors Harness Growth and Focus on Their Client Base
2020 has been a volatile year in the financial markets, with the presidential election, the pandemic and civil unrest contributing to widespread uncertainty. Investors are increasingly looking to their advisors for new strategies to ride out volatility without derailing their long-term plans. With clients seeking additional support, it presents a challenge for advisors who strive to be reliable partners to their clients and add value, while simultaneously seeking opportunities to grow the business. As advisors look to scale, they reach a pivotal point where they must decide where to focus their time and efforts.
One area where advisors can save time and create efficiencies is through asset management. We believe when asset management is approached strategically, it can differentiate your business, propel growth and help your clients meet their long-term goals. We provide support for advisors on this front through Valor Asset Management. An extension of our core GVA offering, Valor is one of the many solutions GVA provides to help streamline our advisors’ days, so they can focus their time and resources on working directly with clients. Here, we spotlight the philosophy behind Valor and the benefits it offers to GVA advisors.
A Solution Designed for GVA
To understand where we are now, it is important to highlight how we got here. GVA was founded on the traditional RIA structure, and we provided compliance and back office support to those wishing to transition to an independent practice. This approach supplied the foundation for all those in our network to grow their businesses and achieve the structure they desired. As we broadened our network and solidified our foothold within the backend support channel, we recognized an opportunity to expand our focus to include another core offering for our advisors: asset management.
Four years ago, we welcomed Lee Johnson Jr., CFA, to our team as our chief investment officer and he set out to create what are now known as the Valor models. His focus was on methodically and strategically building models that met our advisors’ goals of managing investment risk while advancing clients toward their long-term objectives. The models need to work for investors at various risk levels and be customized to advisors’ preferences.
As the models took shape, we offered them to advisors within the GVA network, who could choose to outsource their entire asset management function to Valor or utilize the extensive research within their own strategy. This dual-sided approach puts the power in our advisors’ hands and creates a launchpad for growth.
A Disciplined and Customizable Investment Approach
Valor offers eight models with a range of diverse exposures. The suite includes three equity-only models and five ETF and blend models that range from very conservative to very aggressive. Each model is directly managed by our CIO and his team, and the strategies meet various investment objectives and risk metrics.
Valor models are unique for a variety of reasons, particularly the highly trained team behind them. These experts have designed an investment approach that manages risk while also driving growth, thanks to the underlying actively managed strategy.
Individual equities offer tremendous upside, and return potential is not watered down as it can be within an ETF or mutual fund wrapper. This approach creates an incredibly powerful offering for the end investor, but the associated due diligence process on the advisor’s part for equity selection is time-intensive and cumbersome. We handle that for you.
Our team utilizes tools like Orion Advisor Services and Morningstar Office to identify individual companies and perform extensive research and due diligence on performance, managers, cash reserves and other fundamentals that drive their long-term potential. Our models are reviewed and rebalanced quarterly to ensure we are not over- or under-allocated to certain positions. The quarterly reviews allow advisors to stay on top of what their clients are invested in and ensure they keep within prescribed investment allocation targets.
Adding Value and Empowering Advisor Growth
Our asset management offering was designed with our advisors in mind. It is meant to streamline portfolio management processes and allow advisors to spend more time on planning and working directly with their clients. Some of the core benefits include:
- A dedicated and responsive management team -GVA advisors enjoy direct access to our chief investment officer and his team of portfolio managers and investment professionals. In addition to scheduled quarterly conference calls where details are provided on recent investment decisions and market outlook, Lee makes it a point to be available to our advisors, answer questions from clients, offer his take on the latest events and act as a sounding board for concerns and questions.
- Risk-minded and customizable – Because our team takes an active management approach, advisors can design a solution that meets the client’s goals while appropriately managing their risk tolerance. This is a significant value-add for high-net-worth investors. The process of customizing a portfolio needs to be responsive to the client’s risk appetite. We provide every office with a risk questionnaire that they can share with clients to assess needs, goals and outlook. The 15-question survey explores a client’s perspective on the markets, economic landscape and more. This survey produces a score that the advisor can use to assess overall risk tolerance and facilitate a follow-up conversation with the client.
- Ongoing risk-mitigation measures -The risk questionnaire was strategically designed to provide a well-rounded view of client risk appetite and foster stronger communication between advisor and client. This is not a one-time activity, and rather it can be used repeatedly, allowing advisors to react to the latest newsflow and market changes and bring their client into the investment process. Since the election alone, we have seen double the questionnaires distributed to clients, empowering their advisors to keep a finger on the pulse of their risk tolerance and a step ahead of any changes.
- Supportive of a holistic wealth management approach – Advisors on the GVA network share a common perspective on the importance of a holistic approach to managing their clients’ wealth. We are responsive to current events but maintain a long-term view, conducting appropriate research of investment opportunities and investing only in high-quality companies.
Lee Johnson provides his latest market commentary in real time and his door is always open for GVA advisors seeking his insight. Check the blog later this month for Lee’s reaction to this year’s events, his current outlook and perspective on 2021.In the meantime, connect with us on LinkedIn and Twitter for our latest insights and team updates.