1st Global advisors will have more to offer clients after HD Vest's parent company Blucora buys the IBD, says 1st Global President David Knoch.
“Together we're stronger,” says Knoch. “We have greater scale, new opportunities for leveraging efficiencies, capabilities and technology and even more to serve our advisors and their clients.”
Blucora announced it was
Both 1st Global and HD Vest often partner with CPA firms, encouraging them to offer financial planning services to clients. Blucora intends to combine HD Vest’s individual tax advisor focus with 1st Global’s institutional, multi-partner focus.
For now, Blucora is likely to retain the 1st Global brand, Knoch says. Blucora also owns TaxAct, the tax preparation software provider acquired in 2012 by Blucora’s predecessor company, InfoSpace.
Blucora believes it can leverage the need for tax advice in the wake of the recent tax law change, according to Knoch.
He sees more tax clients coming to their accountants for advice about the new tax law, recognizing that CPAs have a fiduciary responsibility to act in their clients’ best interest.
New technology will also be available for clients and accountants.
“More real-time updating for our financial advisors is important,” says 1st Global president David Knoch.
Last month, the IBD announced it had expanded a partnership with the wealth management technology provider Envestnet to launch a new Vision data management system that leverages artificial intelligence and data analytics to provide insights into financial advisors’ businesses.
1st Global also recently launched MyRepChat texting software, which advisors can use for communicating with their clients.
The technology integrates well with Redtail’s core CRM product, according to Knoch. “There are a lot of advantages to this platform,” he says, “so we're pretty excited to make sure that despite regulatory expectations and challenges, we don't hold our financial advisors back from being able to communicate well with their clients.
1st Global also signed an agreement with Broadridge to overhaul its advisor compensation systems and plans to improve the reporting it provides to its financial advisors through similar technology partnerships.
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Should advisor retention go as planned, Blucora's agreement to purchase the firm would boost its IBD headcount to 4,500 reps.
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The tax-focused IBD’s custodial and platform transition is taking longer than the company or its advisors expected.
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Blucora CEO John Clendening says the cuts to head count should taper off by next year, when the firm will have dropped as many as 1,000 reps in 16 months.
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“More real-time updating for our financial advisors is important,” Knoch says. “All of our advisor compensation will be consolidated into a single system. Today we're using multiple systems to process their compensation, so they'll get faster, with better reporting.”
Impact investing is another area where Knoch hopes to expand the market for 1st Global advisors.
The IBD is partnering with Dimensional Fund Advisors to provide clients interested in socially responsible investing with a model portfolio by the end of the third quarter.
“Socially responsible investing is becoming more in demand from clients,” he says. “You know, 85% of millennials are interested in socially responsible impact investing. That's something that we want to be able to deliver to our CPA wealth management providers.”
And by the end of the year, 1st Global will introduce Envestnet’s Insurance Exchange, which will allow advisors to offer variable annuities to clients.
“There’s a lot going on,” says Knoch.
