A Transaction Management Unit of a large brokerage services company was struggling to secure large asset business from independent investment advisors at a time when those advisors were leaving the big name firms in droves to start their own business. This Unit provides transaction management services so once independent, the advisor can keep track of their clients’ transactions in order to comply with regulatory requirements and provide value-added services to the advisor’s clients. Not something the advisor can easily take care of themselves, they seek third-party providers such as the Unit. The Unit’s platform is expensive; the Unit had established a threshold amount of assets an advisor needed to bring on to the platform in order to be cost effective and profitable. Due to the competition in the market, the Unit found that its Asset Acquisition Branch was consistently bringing in advisors with less than the minimum assets. They found that many times the advisors actually had more assets than they brought to the Unit but were giving them to the larger players in the marketplace. The recession led to a significant decrease in the Unit’s asset base under management and to new accounts with an excess of minimum asset target by the Unit. While large accounts still existed, the Unit found that the most powerful investors chose the Unit’s larger competitor for these accounts, oftentimes being drawn to the name they better knew. The Unit’s team needed the skills to draw larger investors and meet their minimum asset target amidst a shrinking asset pool.
Accordence tailored its system to teach the Unit the skills it would need in a one-day hybrid course. Working with the sales side of the Unit’s corporate training group, Accordence consultants walked through individual issues that different individuals had, and devised strong solutions to these tough questions. By looking at these different problems, Accordence found that the Unit needed to be assertive and find its leverage. Due to the competitive and economic environment it seemed members of the sales team were forced to accept any asset transfer offer an advisor put in front of them. The Unit had thus been left, at times, with the accounts their larger competitor turned down, because these accounts were either too small or more work than they were worth. Oftentimes these deals were connected with a verbal statement such as “Do well on these and we’ll give you more business”, but the lack of a formal agreement led to many dead ends.
The most notable success was a creative deal struck by the Unit’s San Francisco office. The office was approached with an account of $6 million dollars. This number was below their normal accepted threshold, and under further research, turned out to be made up of non-standard assets for the Units product to manage. These non-standard assets would be difficult to operate, which was probably the reason their larger competitor had turned it down. The Unit used the Accordence framework during the session to brainstorm leveraging this non-standard asset offer. The team discovered that the owners of these non standard assets also had tens of millions of dollars in suitable assets also entrusted to the advisor. The Unit struck an agreement that would ensure them future investments by the advisor of these suitable assets if they also managed the non-standard assets for a set period of time. Sticking to their end of the agreement, the Unit was rewarded with tens of millions of dollars in assets to manage a short time later.