Looking forward: Optima Group’s Perspective

As we all acclimate to a new working and living environment, we hope that everyone is doing well during this difficult period. We are here for you and encourage you to reach out to us with any questions you may have. This is a time where we believe we can only succeed by coming together as a community, even if virtually, and supporting each other.

This has been a challenging week for all of our clients, but today I was especially thinking about the RIAs. Their simultaneous need to manage clients, adjust investment strategies, and maintain firm morale has been overwhelming. And, most RIAs’ budgets are in disarray since they are faced with steeply falling revenues for the first time in years.

Yet, this is also an opportunity for many firms. Ones that recognize the fundamental tenets of running successful small businesses in different economic environments are likely to recover more quickly than their peers. Ones that don’t may suffer further disruptions from client attrition and loss of key personnel.

What are some winning strategies?

Client money in motion during times of crisis will result in new business opportunities. Make sure you are communicating to your clients and your market using every channel available. Recruit successful sales resources that may be looking for a new home. Step up your marketing activities, including letting clients, prospects and centers of influence know why you are still their trusted advisor.

Be ready to access capital. There is a tremendous amount of capital that is still available to RIAs – both as equity interests and lending facilities. While valuations and initial payments are being dialed back, firms that can think strategically about building long-term value can position themselves to come out of this downturn with higher upside potential. Don’t think about the great deal that got away because the market intervened. Think about how to get the best deal done now.

Get your team motivated and involved. Tomorrow is not going to be like yesterday. Successful firms will need to sacrifice in the near term to be ahead in tomorrow’s climate. Be blunt and direct but make sure your staff knows that you are all in it together. 

Get help while you can. The financial incentives and relief in the bill passed by Congress, and the facilities available in many states are there to be used. Don’t think that the funds are for other industries or businesses or be reluctant to access these resources. Your competitors will. Shouldn’t you?

To sum up, you know you offer great solutions, client service and reporting. It’s time to take a breath while doing even more. Run your business daily like a driven, entrepreneurial firm. Spend time on yourself and your business – not just your clients. We will all get through this. But some, with insight, perseverance and persistence will find themselves in a better place in the not too distant future.

Stay safe and healthy,

Ken Hoffman
Managing Director and President

Alternatives Platforms Gain Traction in the Retail Market

Earlier this week, in the midst of the current market chaos, iCapital Network, announced that it had closed on a new $146 million funding tranche. Latest round of investors included well-known industry giants such as Goldman Sachs, AMG and Hamilton Lane, who joined an equally impressive list of earlier backers featuring BlackRock, UBS and Blackstone.

The robust capital commitment reaffirmed the expectations of leading investment firms that interest in hedge funds and other alternative products among HNW investors – and the intermediaries that serve them – would continue to rise and perhaps accelerate through this period of market uncertainty. 

With AUM approaching $50 billion, iCapital now ranks among the largest of the new alternatives platforms targeting the HNW market. iCapital offers investors access to a curated menu of private equity, hedge funds, and private credit products from an independent source at lower minimums and with a set of due diligence tools. The firm has over 50 private label relationships with leading investment firms to drive distribution. Among these, is BlackRock, which has integrated iCapital as an alternatives source with its popular Aladdin wealth platform. 

iCapital, however, is not alone in this space. Listed below are other leading names in retail directed alternatives platforms. These platforms also typically offer a variety of services related to access, evaluation, trading, and reporting of various alternatives investments including:
• Comprehensive dashboards showing offerings, performance, execution records, manager roadshows
• Analytic tools and performance tracking
• Simplified execution with automated subscription and redemption processes
• Integration with PM and reporting systems

We will continue to track the growth of these alternatives marketplaces among B/Ds and RIAs serving the HNW and UHNW markets to see if they become a preferred option for alt. access and an attractive point of differentiation for intermediaries.  

What Should You Say to Wealth Clients?

We are in uncharted territory, facing a health crisis unprecedented in our lifetimes. People are stocking their pantries with non-perishables, searching online for Purell and coping with social distancing. Many businesses, municipalities, schools and communities across the globe have shuttered. What would have seemed like science fiction a few weeks ago has become what is hopefully our short-term reality.

For most organizations, it is no longer ‘business as usual.’ Many have implemented new service protocols designed to provide added support to clients while keeping everyone safe. And, where possible, companies are leveraging technology so employees can work from home. 
In times like these, it’s especially important for financial advisors to reach out to clients with empathetic messaging that builds trust and keeps clients informed.  

Communicate early and often. Frequent and proactive communications through all channels (emails, social media, updates to your website and phone calls) will reassure clients that you’re on top of the situation.

Where possible, segment your message. Your clients’ concerns will depend upon their situations. For example, older clients may be particularly worried about enjoying a secure retirement while business owners may need strategies to keep their companies afloat.

Be transparent. Let clients know how you’ve adapted your business operations and how they can reach you. Share your position on the financial markets and re-iterate your strategic approach to investing, being honest about the uncertain road ahead.

Be available. During times like these, sometimes clients need a sympathetic ear and recognition that we are all in this together.

Get creative. Schedule virtual get-togethers so clients can hear what your company is thinking and have an opportunity to ask questions. You can maintain a sense of community through webinars, social media posts and emails that reinforce your leadership and support.

How to Spring Clean Your Brand

Spring brings a sense of renewal, so it’s the perfect time to clean and revive. People give their homes a “spring clean” with the goal of making things feel fresh and new. But spring cleaning is not just for your home, use this mindset to breathe new life into your brand. Embrace the new quarter as a new beginning and an opportunity to revitalize your creative, positioning and marketing plans. 

Your brand creates an immediate first impression and is crucial to your business strategy. A strong brand should reflect your evolution by showcasing your value proposition, vision, and intent of the business. It allows you to connect with your current audience and reach new clients.

Here are four questions to ask yourself as you consider refreshing your brand this spring:  

Logo and Brand Identity  
Question: Does your logo, look and voice reflect where you want to be in this new decade?

Recommendation: Use this time to evaluate your mission statement/value proposition, logo, website and other creative assets. A strong brand is the pillar of your marketing efforts and is essential for building awareness. Companies are constantly evolving, and a refresh keeps your brand from feeling or looking old. On average companies update their identity every 7-10 years. Renew and refresh your company’s vibrancy and set yourself apart from the competition with an updated brand.

Client Audience and Database
Question: Who is your ideal client? Are you reaching them? Is your database segmented?

Recommendation: Now is the time to clean your client lists to ensure the information is current, accurate and consistent. After your data base has been scrubbed, the next step is to identify high potential niche groups with specific needs and create audience segments and client personas. Through audience segmentation you can deliver more focused, personalized and relevant content to targeted clients which ultimately provides a better client experience. 

Client Service
Question: Are you proactively anticipating clients’ needs and adapting your offering accordingly? Do you have a pulse on what your clients want in 2020?

Recommendation: As remote interaction and servicing becomes commonplace, businesses must find new and creative ways to help their clients and still provide exceptional client service from afar. This is an opportunity to implement digital solutions and technology such as video meeting apps into your communication efforts. This is also a great time to survey clients about specific products and services as well as overall company experience. Leverage any learned information from clients including feedback and reviews. These insights can help you determine what can be done to make your products and services better and what can be eliminated from the mix. In today’s world, it is crucial to provide a friendly digital presence and respond quickly to client needs. Embrace digital solutions to help you maintain exceptional client service and gain critical feedback.

Social Media
Question: Do you have the right social media accounts for your business? If so, are they up-to date? Do you have planned content to publish on these channels?

Recommendations: Evaluate the social media accounts you are currently using and make sure they are updated with current logos, images and links to your website. Review and refresh your social media strategy, set goals, examine analytics and build robust content calendars. LinkedIn and Twitter are the fundamental social accounts for financial services, but Instagram can bolster brand awareness and help you engage with clients. HubSpot reports that Instagram sees over one billion active monthly users and 500 million daily Instagram Stories. There is a financial services audience on Instagram, but make sure your content is optimized on this platform, which relies heavily on visuals including captivating photography and videos. Your employees are also key in building your social media presence. Recommend that their profiles are up to date and connected to your business page. Encourage your employees to connect on LinkedIn and share your content. They are valuable to organically expanding your social reach and building brand awareness. Finally, don’t forget to clean out your messages and make sure you haven’t missed any questions, comments, concerns, or feedback. Clients expect instant responses, this is a chance to showcase exceptional client service in a public forum.

An Important Message from Optima Group

As everyone continues to feel the effects of COVID-19, or coronavirus, we wanted to share with you our preparedness plans and our wishes for the continued well-being of our colleagues, partners and clients. Our goal is to continue to serve you and provide the highest level of attention and service. To that, we are taking the following steps:

1)     Business continuity plan activation. We have put into action our detailed business continuity and preparedness plan that covers remote workplaces, client communications, technology, cybersecurity and other key factors.

2)     Vigilance regarding health and the impact of contact with others. We remind, as always, anyone who is not feeling well to stay home and recover. We are practicing social distancing within our office and have established an optional remote workplace policy to enhance distancing. We have systematic interoffice communications and meetings both virtually and by phone multiple times a day to keep everything on track and continue to meet your expectations.

3)     Move to virtual meetings and communications. For the foreseeable future, we have cut down any non-essential travel or face to face meetings. We are fully enabled technologically to conduct virtual meetings through a variety of applications to continue to provide the guidance and help you require.  

4)     Heightened attention to office cleanliness and hygiene. We have increased our office cleaning and sanitation efforts and provided additional cleaning products and sanitizers for individuals to use as needed.

We understand that this is a very challenging time for all, but we remain committed to serving you as always. We continue to keep a close eye on the rapidly changing landscape in order to respond expeditiously. We thank you for the continued trust that you place in us and encourage you to reach out to us with any questions you may have.

Before the Mad Men…

Well before the post-WW2 “mad men” of advertising, there were pioneering women who made their mark in the marketing world. In honor of Women’s History Month, we celebrate women leaders who were ahead of their time and helped pave the way for future generations of creative women.

Mathilde C. Weil, America’s first ad woman  
Mathilde C. Weil, an immigrant from Germany in the 1870s, went to work as a translator following the death of her husband, then became a writer for newspapers and magazines. She found, however, that buying and selling ad space was a more lucrative career. In 1880, 40 years before the 19th amendment was ratified, giving women the right to vote in the U.S., she opened the M.C. Weil Agency in New York. Her firm functioned as the middleman between advertisers and publications, with a strong focus on medicine ads. She had two female partners, Mary Compton and Meta Volkman, making it a solely female run firm. Mathilde ran the agency for over 20 years, until her death in 1903.

Queen of the copywriters, Bernice Fitz-Gibbon
Bernice Fitz-Gibbon began her career in the early 1920s in Macy’s advertising department. From there, she became Publicity Director at John Wanamaker, then moved to Gimbels as Publicity Director and a member of the executive board. In 1954, she left to start her own advertising agency and, in the 1950s, was “reported to be the highest paid woman in advertising.” Along the way, she came up with some of the most enduring retail ad slogans of all time, including Macy’s wartime “It’s smart to be thrifty,” and Gimbels’ “Nobody, but nobody, undersells Gimbels.” She was also a mentor and shared her knowledge, and, as a result, “Fitz-trained” copywriters were in hot demand throughout the advertising industry.

Mary Wells Lawrence, first female CEO of a NYSE-listed company
Mary Wells Lawrence began her advertising career working as a copywriter for a department store in Ohio. After working for Macy’s and several agencies, she joined Jack Tinker & Partners, a revolutionary “think tank” of creatives known as “Tinker’s Thinkers.” She was responsible for such innovative campaigns as the Braniff Airlines painted planes and Pucci-designed uniforms. According to Mary’s book, A Big Life in Advertising, when Jack Tinker failed to make Mary president as promised, because “It’s not my fault, Mary, the world is not ready for women presidents,” she left and founded Wells Rich Greene in 1966. Clients included well-known names such as American Motors, Cadbury Schweppes, IBM, Pan Am, TWA, P&G, Ralston Purina and others, and her firm created such iconic campaigns as Alka Seltzer’s “plop, plop, fizz, fizz, oh what a relief it is,” “Flick your Bic,” and “Raise your hand if you’re Sure.” Mary continues to inspire and is one of the founders of wowOwow, which was a website (now merged into PureWow) started by and written solely for women.

March is Women’s History Month
Women’s History Month is a dedicated month to reflect on the often-overlooked contributions of women to United States history.”1


Three Things to Consider About Millennials

Recently, the cover story for InvestmentNews was “Why won’t financial advisors take millennials seriously?” In part, the article explains that most financial advisors don’t feel millennials (born between 1981 and 1996) are worth the effort because of a lack of investable income or because millennials are dubious of financial advisors. 

Millennials do present a different set of challenges from the generations before them, but perhaps some of those challenges would be worth it if financial advisors saw them more as a future investment in their businesses. 

Millennial women cannot be ignored
According to the Pew Research Center, since baby boomer women forged into the workplace, the percentage of women working has grown. In 1985, 66% of women were in the workforce and 86% of men; in 2018, the gap narrowed to 72% of women compared to 83% of men. Additionally, millennials are getting married and starting families later than previous generations, which means financial advisors need to adjust their thinking in order to help single, professional women.

Inherited money may walk
While millennials stand to inherit a significant amount of money from their boomer parents, most of them are not that interested in using “daddy’s financial advisor.” Millennials want someone who understands them and what their struggles and perspectives are. As the generation who entered the workforce during the Great Recession, they have different ideas about money than their parents, who enjoyed great periods of economic growth.

Millennial money may come from non-traditional sources
This may be one of the greatest challenges for financial advisors who are not millennials themselves. Millennials make money differently than their parents and grandparents. Mark Zuckerberg is a perfect example. Not to mention others like the founders of Pinterest, Mashable and Tinder.

Or consider even more non-traditional moneymakers, such as Jeffree Star, with a net worth of $75M, a make-up artist who became YouTube famous with 17.5M subscribers and started a make-up line. Or YouTube favorites, Dude Perfect, a group of five competitive guys who made $20M last year. These represent careers that ten years ago financial advisors, and the rest of the world, could never have imagined. Advisors who want to go after these millennial mavericks will need to present their services in a new, fresh, and personal way.

It’s time…to have the (coronavirus) talk with your clients

It’s difficult to listen or read any vaguely news related report or look at any social media right now and not hear something about the coronavirus. Casual conversations frequently drift to talking about it, rife with opinions and advice on how to “protect” against it. Markets around the world have reacted negatively to coronavirus (Covid-19) fears, production slowdowns and other factors related to the virus. Here at Optima Group, we are keeping a close eye on the situation and making preparations to ensure work continuity in case we are impacted.  

Let your clients know you’re there for them
When the going gets tough, that’s often when your clients most want to hear from you. A variety of studies, as well as anecdotal evidence, point out the importance of client communication, particularly during periods of uncertainty. Take this opportunity to let your clients know you are closely following the situation and ready to make any moves or adjustments necessary. Reinforce the idea that you are not there just to manage their money, but to help them with a holistic approach to navigating life’s challenges. Your clients will appreciate it and be reminded of the strong relationship you have with them. 

Keeping Up

The recent offer by Morgan Stanley to buy discount broker E*Trade has been widely publicized – and for good reason. The move is emblematic of a number of important trends in the banking and wealth management industries, including:

• The strategy of leading investment banks to move down market to build their share of the growing mass affluent segment
• The realization by still another large financial adviser that a significant commitment to technology is an existential imperative, particularly in appealing to next gen clients
• The likelihood that discount brokerage as a standalone business is not viable and that brokerage offerings need to be part of a broader holistic offer that includes banking and potentially other financial services

But perhaps the greatest significance of the E*Trade buyout is what it suggests about the pace of change in the investment management business and how impactful a disruptive startup can be to a large and well-established business.

It was only five years ago that Robinhood, with $3 million of venture capital, built a better mousetrap. The firm launched a slick, easy to navigate mobile app with a social network aspect and commission-free trades in stocks, funds, gold, options and cryptocurrencies. By 2018, the platform had reached 4 million accounts surpassing E*Trade. This year, Robinhood reached the 10 million mark, almost halfway to the combined accounts of TD Ameritrade and Charles Schwab.

TD Ameritrade and Charles Schwab had been building their businesses for nearly 50 years, E*Trade for nearly 40 years. Robinhood, in less than 5 years, has reached scale and challenged these entrenched leaders forcing significant strategic shifts and consolidation.

We expect the pace of change to continue to accelerate in financial services as new technologies offer new solutions and value propositions. This only increases the importance of current industry leaders to stay ahead of market and technological change.

Your Home(page) is a Reflection of You

In many ways, designing a corporate website is like decorating a home. You expect, and, hopefully even invite visitors to come to each, and you want them to stay a while, get to know you better and continue to engage with you(r) company. Here’s how to apply lessons learned from the increasingly popular home design shows, to help you make your home(page) and the rest of your website welcoming, impactful, and a better reflection of your organization. 

Coordinate your look and feel with who you are. Are you more Shabby Chic, Industrial or Mid-century Modern? Your website design is an extension of your brand – it immediately tells visitors what your value proposition is and defines your target audience. For example, if clients and prospects are ultra-high-net-worth investors, the look and feel of your website should be upscale, not retail, so visitors know they’re in the right place. 

Make it easy for people to find you. When you invite someone to your house, you give them your address, so they know where to find you. It’s the same thing with your website – make sure your URL or a link to your home page is on your LinkedIn profile, stationery, email signature and other corporate literature. And work toward optimizing your site with SEO search terms that bring you to top of the list.

Create good flow. Everyone likes an open floorplan, where it’s easy to get from one room to the next. If your visitors wander into your ‘About Us’ location, create a clear passage to the next place they may want to visit (or you’d like them to go), such as ‘Contact Us.’

Avoid clutter. It’s hard to find what you need when your house is a mess.Make your website easy to navigate by presenting information in an organized fashion, with copy that’s succinct (and leaves out the unnecessary) and images that support your message. A little white space is a good thing. 

Set up space for visitors to hang out. Guests to your home gather in the kitchen when you have a large island with seating. On your website, create a spot for visitors to congregate, such as on your thought leadership page. Reinforce your expertise by making it inviting, and keep it stocked with fresh treats your visitors will want to consume.

Be a good host and keep the conversation going. When you entertain company, the onus is on you to provide guests with the essentials. You don’t want your website visitors to remain stuck on your home page or cut their visits short. Center your content around their needs and draw them in with invitations to view your most recent video or latest blog post. Engaged visitors hang out longer and will look forward to coming back again soon.