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'Never underestimate an advisor equipped with technology'

Paul Hatch, founder of new Vise partner Vestria, gives tips for navigating volatility and growing your business

Today, Vise is excited to announce that we’ve partnered with Vestria, a new RIA accelerator led by Paul Hatch that provides flexible capital to growth-oriented firms. With this partnership, all advisors that join the Vestria network will have access to Vise to drive growth with personalized, automated portfolios tailored to their clients’ life goals and values. 

Paul is a 30-year veteran of the financial advisory industry who formerly held roles as Vice Chairman of Morgan Stanley Wealth and Group Managing Director and Head of Investment Products and Services for the Americas at UBS. 

Vise sat down with Paul recently to discuss his take on the current market, how it’s impacting RIAs’ businesses, and how they can be thinking about driving growth and efficiency during a time of volatility. 

How did you come to the financial advisory industry? 

PAUL HATCH: In July 1982, I was a young officer in the US Navy. I was getting ready to leave for a six-month cruise. Most of us would sell our cars so we didn’t have to pay to keep them stored, and buy a new one when we came back. I took the money from my car and gave it to my Dad. When I came back in February 1983, he had doubled my money by investing it in the market. I wanted to figure out how he did it. Some, of course, was skill, but a lot was just timing. The more I got into it, the more I realized how tough it was to generate positive returns, and how few people really understood the risks they were taking. I wanted to be someone that educated people on what they should and shouldn’t do.

What do you make of the current market environment?

It’s the perfect time for an advisor. Anyone can be a good advisor when the market is constantly going up and bear markets last a few hours, not a few years. I have no idea where the market will be in six months, let alone six years, but I do know it's going to be volatile and uncertain. Great advisors will chart a long-term path to take advantage of the uncertainty and win even more clients.

The best practice is calling clients twice as much as you regularly do. They need to hear your voice.

What types of calls are advisors getting from their clients right now?

Most of the calls will be the same: “What should I do now?” “Where is the market going?” “Should we be doing something different?” The smart advisor knows this is a trap. The smart advisor has already discussed the difficult times, and has a portfolio approach that anticipates volatility and emphasizes staying the path. Clients aren’t expecting advisors to always be able to tell the future but they want to hear from you that their current road, while difficult, is the right approach.

What are some tips and best practices you've seen among RIAs you work with?

The best practice is calling clients twice as much as you regularly do when the market declines. Don’t rely on email, it's not enough. They need to hear your voice. The call doesn’t need to be long, it just needs to be timely. One additional note — always asks the client if there are friends or family that need a call in these difficult times. You will find your referral flow will be significant when this is viewed as a service you are providing your clients.

How are RIAs starting today different from those starting 10-15 years ago?

RIAs are bigger and more sophisticated. They are more complex. Many of the fast-growing RIAs are wealth managers now, not just investment managers. 

What consolidation/M&A activity do you expect among RIAs over the next couple of years?

Consolidation is in the first three innings with a long way to go. The cost of doing business is going up daily. Capital is abundant (for now). More and more advisors are concluding that you must either eat or be eaten. Growth is essential if you want to determine your own destiny and control your succession. The first trillion-dollar RIA is inevitable.

It's not machines replacing humans — it's humans using machines that are going to dominate.

How can RIAs in today’s market build a more efficient business?

Integrate as much automation as you can. Big Blue proved it could beat chess masters, but humans equipped with Big Blue beat Big Blue. What’s the lesson? It's not machines replacing humans, it's humans using machines that are going to dominate the future. Never underestimate an advisor equipped with technology.

How can RIAs attract new clients and expand their business?

Deliver high-quality service. Over half an advisor’s business comes from referrals. Referrals are fueled more by service than by performance, and service is about human interaction with a client. If you automate your business, you have more time to interact with clients. Clients want the convenience of technology and the confidence of a human!

July 13, 2022

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Disclosure

Vise AI Advisors, LLC (“Vise”) is an SEC registered investment adviser. The material presented is for informational purposes only and should not be construed as investment advice. It is not a recommendation of, or an offer to sell or solicitation of an offer to buy, any particular security, strategy or investment product. Investing in securities involves risks, including the potential loss of money, and past performance does not guarantee future results. Further information regarding fee methodology can be found in our Form ADV Part 2A Brochure, available on our website.

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