RIA UX design before and after COVID-19

There is currently a plethora of information and opinions about how COVID-19 has and will continue to change the way we all do business. Technology is often at the forefront of these decisions.

Consider your local pizza restaurant, where you order pizza for Friday movie night. In the past, you’d call in an order, and you could hear the background conversations because the teenager who answered put you “on hold” by putting the phone down on the counter. You would go in to pick up the pizza, maybe see a neighbor, chat, come home and relax for the night. That same pizza place now has to compete more fiercely with Domino’s, which has a full staff that designed a compelling user experience (UX) that makes it easy for you to order online and have your pizza delivered. You can pick a time and select one of their promotional items while also applying coupons and racking up rewards.

The biggest difference, now, between your local place and Domino’s may be the UX you are using while interacting with them online. Many small restaurants have had to update or launch a website where you can order—without the expert UX staff Domino’s has. For a small pizzeria, the UX may be terrible, and in frustration, you may start ordering from Domino’s. This scenario can be applied to any business. Simply put, a good user experience can help keep and acquire new clients, while a bad user experience can be a deal breaker.

In a recent study by Aite Group, when asked about the benefits RIAs would like to see from client-facing technologies in the near future, found that 51% said, “acquire new clients.” This is not surprising; your pizza place would like to acquire new clients too. And, just like restaurants, RIAs need to provide an online UX that is easy to navigate, provides information where people expect to see it, has calls to action and delivers relevant thought leadership. While UX alone isn’t going to give RIAs everything they want (after all, people still want good pizza), now is a great opportunity to make a UX that works harder and is more effective. In combination with creating informative campaigns and continued communication with prospects and clients, technology can begin to play a bigger role in acquiring new clients.

RegTech gets Holistic

The trend toward consolidation in the regulatory technology (RegTech) arena may be heating up. Last week leading compliance technology and surveillance firm, Smarsh, announced its acquisition of Entreda, a fintech provider focused on helping RIAs and broker-dealers address information security and cybersecurity risk. Together, the firms seek to provide a more holistic RegTech solution spanning regulatory and compliance, as well as security and cybersecurity risk.

An increasingly competitive field
The acquisition is further evidence of a trend toward blending related risk and compliance services for those who support the RIA and broker-dealer markets, a trend undoubtedly buoyed by the SEC’s increased emphasis on cybersecurity issues. Leading TAMPs, custodial and other platforms, including Orion and LPL, have seen this trend coming for some time and continue to expand their suite of services to include compliance and/or cybersecurity. Other fintech providers are recognizing this as well. Last year, RIA in A Box, a compliance software and consulting services provider, announced the addition of a cybersecurity solution to round out its toolkit. Traditional compliance service providers including ACA/Cordium and Aurora also offer a range of cybersecurity services as well.

Becoming best-of-breed
A key challenge for RegTech consolidators is to ensure their ostensibly all-in-one solutions can compete with the bevy of discrete best-in-breed compliance, surveillance and cybersecurity solutions on the market. This will be particularly important for those RegTech providers wishing to move “upstream” to service larger RIAs – where more established TAMPs and custodians maintain a strong foothold.

Aggregators Get Strategic

An area that we follow closely as an indicator of the overall market health is RIA transactions in progress and/or completed, particularly by aggregators. This includes outright acquisitions, as well as joint ventures or major new offerings. After a record number of transactions in 2019 at unprecedented multiples and a strong Q1 2020 start, March and April deals declined sharply as the markets reacted to the impact of COVID-19.

However, we are seeing some signs of renewed activity, as firms adapt their deal focus to align with the environment. Some examples:
1. Kestra Financial’s Bluespring Wealth Partners, an acquirer of RIAs and wealth management firms, with an emphasis on providing succession strategies, sees demand accelerating for succession planning from firms
2. Hightower Advisors continues to concentrate on RIAs versus breakaway brokers and announced two transactions in April and May, the first being the purchase of tax and estate planning specialists, Wellspring Associates and the second taking a stake in RIA Osborn, Williams and Donohoe
3. In April, Dynasty Partners and Mariner Wealth Advisors introduced a wealth management platform, Mariner Platform Solutions, which combines “Mariner’s Wealth Management skills with Dynasty’s Core Services platform and its turnkey asset management platform.” Typically, Mariner’s acquisitions are absorbed into the Mariner brand and structure. This model facilitates transactions with firms that want to partner with Mariner, while remaining independent. Mariner has also taken a minority stake in Dynasty Partners
4. Goldman Sachs, after acquiring United Capital in 2019 and folding it into the Goldman Sachs brand, in mid-May announced its intention to buy Folio Financial, which offers retail robo-advisory services and an RIA custody platform

Aggregators, often backed by PE firms that need to deploy capital, have served as a gauge for deal strength and valuations. Similarly, as we look at the current opportunities, we study what aggregator activities might portend. Our takeaway is that, as the climate has shifted away from being a seller’s market, aggregator and other firms have begun to be more thoughtful and strategic in their transactions. While this may not be a permanent change, we anticipate that it will continue at least through the end of 2020.

Instagram—It’s Not Just For Fun Anymore

Instagram, which used to be primarily a platform for personal use, is increasingly used by companies to promote their brands and their businesses. It allows organizations to show the friendly, personal side of themselves. In 2020, usage of social media has increased substantially as a way to access the larger world while we stay at home.

According to a study from, an Influencer Marketing Agency, Instagram campaign impressions have increased by 22% between Q4 2019 and Q1 2020. Instagram is a cost-effective way to organically connect, build awareness, raise image perception, reach prospects and engage with current clients.  

Here are a few tips to optimize Instagram for your business.

1.     Understand Instagram culture. Instagram is heavily people focused and content is key. This is your opportunity to unite people, connect with a community and share stories.
2.     Use images and videos. Clients respond best to original, engaging images and videos that do not look too staged. Give them a behind the scenes look at your company. Showcase employees and leadership and show your audience you care about people.
3.     Increase your reach and grow your following. A large percentage of growth comes from partnerships and sharing. Support and collaborate with non-profits, local causes, other businesses and people that have the same target market.  
4.     Find the right time and frequency. Find the amount of posting that is right for your firm. This will depend on what you have to say, the resources that you have to devote to posting and other factors. The focus should be on quality, not quantity, and it’s important to maintain a regular schedule. And time of day for posting can make a difference. According to HubSpot, these are the best days and times for professional services to post on Instagram: Tuesday, Wednesday/Thursday, and Friday at 9 a.m. or 10 a.m.
5.     Words matter. Although Instagram is primarily a visual platform, content and hashtags are still important. If you’re referencing a longer piece or an article from elsewhere, link to it via your bio. Use hashtags to help raise awareness of your profile. 

Know Your Client

While not a new concept, content marketing, particularly in the form of thought leadership programs, is proving to be an effective tool for promoting service firms like wealth and asset managers. This is not surprising since these firms “sell” an intangible product where expertise is critical, and well-crafted thought leadership can provide a compelling proof statement of capabilities and product quality. 

Personalization, in the form of targeted messaging and communications demonstrating you understand your clients, their challenges and needs, is trending in content marketing today. Several recent studies from McKinsey and others have quantified the significant sales advantage of personalized outreach campaigns. Surveys also suggest rising expectations by clients for increased personalization as an essential element of a satisfying client experience. 

We believe wealth and asset management firms that closely align their thought leadership content with the needs, goals and circumstances of their clients will be more successful. Traditional thought leadership often focuses on general topics about how a firm, for example, manages assets or builds diversified portfolios. It tends to cover investment process, philosophy, and expected outcomes apart from specific client experiences. Personalized thought leadership shifts the focus to the client. It explains product and service design and delivery from the perspective of the specific way clients will find value in the experience. 

Crafting this type of thought leadership requires first and foremost a deep understanding of your clients. Increased data collection from a wide array of sources coupled to sophisticated analytics can help you build dynamic client profiles and achieve highly granular client segmentation. 

These client profiles can serve as the foundation for personalized thought leadership. Marketers can now create content that connects expertise and product features to the specific needs of the individual (or micro-segment) client. Tone, language, and comprehension level can also be closely tailored to the target as can timing and media choice. 

The result is more relevant and compelling messaging, resulting in deeper and more satisfying client relationships.

Optima Group’s Perspective: Impact of the Current Market Environment

As a research-driven organization, Optima Group closely monitors events that are expected to have a material impact on the financial services sector. Needless to say, we are carefully watching trends that might emerge from the current situation. We are focusing special attention on several key questions, the answers to which may portend consequential future developments in the industry. These questions include:
1. How have investment managers responded to a new normal of financial market volatility and what will be the intermediate and long-term effect of these decisions on their businesses?
2. What share of managers across HNW and institutional markets rebalanced according to pre-bear market strategic allocations and what share have reacted with significant tactical shifts?
3. Did industry standard asset allocation strategies suffer from insufficient risk management in black swan events, and will this lead to new approaches that achieve more effective diversification? 
4. Will new approaches to risk management catalyze a round of creative product development in alternative asset classes or accelerate the expanding use of alternatives and alternative platforms among RIAs and OCIOs
5. How will wealth management and institutional clients react to the current reliance on and benefits of innovative forms of communication — and will increased familiarity with these forms of interaction accelerate the trend towards the digital client experience?
6. What market share changes will we see among robo-advisors serving individual as well as institutional clients over the next year?
7. Will behavioral and political consequences of the crisis drive interest in and use of ESG strategies by individual and institutional investors? 
8. What impact will the down markets have on the broader competitive environment in wealth and asset management and how will it affect firm valuations and M&A activity generally? 

There’s no doubt that the financial services industry will change. As it does, we are committed to keeping pace with these changes as we determine the effective strategies to manage the future challenges our clients face.   

Stay safe and healthy,

Dennis Dolego
Director of Research

Black Swan Event Communications

Back in 2011, AON Risk Solutions published an insightful article on surviving unexpected catastrophes, called “Keys to Success in Managing a Black Swan Event.” The article is instructive for organizations, including wealth and asset management firms, looking for guidance in crafting their communications and client outreach programs through the current COVID-19 pandemic. 

First, what not to do 
It is important to understand the psychological effect a Black Swan event can have, namely shock, fear, panic, disbelief, denial, anger and ultimately, grief. According to the article, companies that struggle to survive in such circumstances exhibit one or more of the following reactions: 
1. Failure to acknowledge the event, stick their head in the sand and hope it goes away
2. Spend time denying responsibility for it
3. Look for someone else to blame for it
4. Become paralyzed by disbelief and indecision
5. Act too slowly to find a solution or try only one solution at a time – maintain too narrow a focus, thereby missing obvious options that might be more readily available

For wealth and asset managers dealing with concerned clients, these reactions can lead to fewer communications and/or erratic, confusing and unsatisfying communications that do more damage than good to an already stressed client relationship.

Next, what to do
1. Take emotion out of the equation. Focus on accurate, factual and objective data
2. Break down the situation into manageable pieces and clearly outline the tactical response
3. Own the responsibility for the choices made and the actions taken
4. Be confident that a solution will be found
5. Be persistent and do not give up

Evidencing these steps through client outreach provides reassurance to fearful clients instilling much needed calm and a sense of confidence in the firm’s leadership. Objectivity, clarity and command of the data surrounding and explaining an event, reinforce clients’ belief that the firm is honest, fair- minded, realistic and understands the situation to the extent possible. The client does not have to be concerned that they are being misled by too rosy or too dire a scenario. Finally, the client can take comfort that all options are being weighed and the best decision will be made given the circumstance. 

Communications are an important component of client relations for wealth and asset managers even in the best of times. But during periods of extreme stress, the right communications can save, and even enhance a business, that may otherwise suffer significant damage. 

When ‘Corona de Mayo’ Takes On New Meaning

It’s Cinco de Mayo. A time when friends and families normally gather together for good times, chips with guacamole and Corona beer with a wedge of lime. Now get-togethers must be virtual, and the Corona name is forever linked with a deadly pandemic, similarly named for its crown shape.

Is the Corona brand strong enough to withstand this twist of fate? It would seem so, because in 2019, Corona ranked #70 on the Forbes list of leading brands,1 and it reports that its sales are still strong. However, Corona’s situation makes you think about what you would do if your brand was suddenly confronted by an unfortunate, unanticipated situation. 

There are lessons to be learned about brand crisis management from other leading organizations that overcame adverse situations of their own.

When teens started taking the “Tide Pod Challenge”…Proctor & Gamble (P&G) found an influencer to convince them to stop.
Some time around December of 2017, teenagers seeking celebrity status thought it would be funny to dare one another to consume Tide Pods (laundry detergent packets), videotape and post the challenges on social media. One of the actions P&G took was to launch a social media campaign, recruiting NFL tight end Rob Gronkowski to influence teens to stop with the message, “What the heck is going on, people?”2

When seven people died from consuming cyanide laced Tylenol…Johnson & Johnson (J&J) took control of the narrative.
Between September 29th and October 1st of 1982, seven individuals in the Chicago area died after taking Extra-Strength Tylenol that had been tampered with and laced with poison. J&J reacted swiftly, by setting up a task force to address the issue, alerting the public to stop using the product and conducting one of the first wide-spread recalls in consumer history. It used paid media and PR to take control of the narrative and made it known it was putting customer safety first. Then J&J put its engineers to work to develop tamper resistant packaging.3

When Jack Pearson’s character died from a faulty Crock-Pot® …Newell Brands showed empathy but defended its product with facts.
Season 2 Episode 13 of NBC’s drama, “This Is Us,” aired on January 23, 2018, less than two weeks before Super Bowl LII. The episode, entitled “That’ll Be the Day,” was a flashback revealing that beloved character Jack Pearson died after Super Bowl Sunday, 1998 from a house fire caused by a Crock-Pot. After countless viewers threatened to throw away their Crock-Pots, Newell Brands reacted with empathy and humor saying they, too, were devastated by Jack’s death. Jack himself (actor Milo Ventimiglia) personally apologized to Crock-Pot during a Super Bowl spot. Newell Brands also provided reassurances on #CrockPotIsInnocent, explaining that the low voltage appliances were safe and the type of accident portrayed in the episode was nearly impossible.4

What would you do if your brand became threatened?
With the daily social media usage of internet users around the globe averaging 114 minutes per day,5 news travels fast. It’s best to be ready with a team and plan so you can react quickly and stay in control of your message.

In the meantime, if you’re looking for some inspiration on how to spend a fun, but safe and socially distanced Cinco de Mayo, try some of these activities:

Although crises like the ones above are unlikely to impact your firm, it pays to be prepared. Optima Group can help you address a range of brand challenges, from a refresh to a reboot, and can help you communicate effectively in good times, as well as in challenging periods.  

1 The World’s Most Valuable Brands 2019 Ranking, Forbes,
2 Tide unleashes its secret weapon against the Tide Pod Challenge: Gronk, PR Week, January 16, 2018,
3 Crisis Communication Strategies, Case Study: The Johnson & Johnson Tylenol Crisis, U.S. Department of Defense
4 Croc-Pot’s Response to Its Tragic Role in ‘This Is Us’ Is a Lesson in Smart PR, Inc., January 29, 2018,
5 Daily time spent on social networking by internet users worldwide from 2012 to 2019, © statista 2020

Alternative Investments for the (UHNW) Masses

As UHNW investors continue their quest for more diverse sources of alpha and stability of returns, UHNW RIAs are increasing allocations to alternative investments. In some cases, UHNW portfolios may have upwards of 40-50% allocations to alternatives, including private equity, hedge strategies, real estate and other real assets. In fact, many of these UHNW RIAs position their exclusive access to unique and under-the-radar alternative asset managers as a key competitive differentiator. Clearly, the endowment model pioneered by Yale’s David Swenson is taking hold with UHNW investors and there seems to be no sign of abatement.

The democratization of alternatives
With the proliferation of alternative investment platforms such as iCapital, Artivest, CAIS and a host of others, RIAs and asset managers can now access a range of unique private managers through a single platform – thereby “democratizing” access to alternatives for individual and institutional investors. Many of these platforms tout themselves as turnkey alternative investment platforms, providing additional benefits such as lower investment minimums, streamlined processes and comprehensive performance reporting. Many appear to be gaining traction with leading wealth manager aggregators including Focus Financial, United Capital, Hightower, Mercer and others.

Rethinking RIA brand positioning
Leading RIAs who utilize these platforms appear to have discovered that an outsourced approach to accessing alternatives can help them streamline and scale their offer to a broader set of clients, while allowing them to focus on other high-value activities such as business development and client service. For those wealth managers who rely on their manager access and due diligence as key differentiators, these platforms may pose more of a threat. As “unique access” to managers becomes increasingly commoditized, RIAs will need to find other ways to differentiate themselves.

A Personal Approach in a Socially Distant World

COVID-19 has impacted the way we conduct business around the world. The current challenge is how to be personal in a remote environment. Video is an increasingly important way to connect, share content and deliver messaging as well as connect with friends and family. From basic video conferencing with co-workers and clients to developing fresh video content for website and social media distribution, companies are leveraging video to communicate with a wide array of audiences.   

Video Content
Video is an integral part of brand building, bringing real faces to brand messaging with a personal touch. In the past few years, there has been a rise of mobile-optimized content as consumers rely on mobile devices for information and entertainment. Customers are looking to instantly engage and consume bite-sized content.

Social Media Video
Social media is an important part of a marketing strategy to bring businesses, people and communities together with shared stories and experiences. Social media allows companies to “market” in a non-aggressive, value-added way. Social media videos are an opportunity to share helpful and relatable content about how to manage the crisis, how your company is handling changes, share essential tips and other valuable information in an authentic manner. 

Optima Group understands the need to stay connected in good times and bad. We develop innovative ways to incorporate video and help your firm stay top of mind with your clients.