1. A more holistic value proposition
You can differentiate your firm from the competition by addressing both sides of your clients’ balance sheets. Where others might focus only on the asset management side, your advisors can now demonstrate a more comprehensive, tax-savvy approach that not only acknowledges liquidity needs and debt consolidation opportunities, but provides a solution for them as well. Whether your clients need low-cost liquidity for personal life events, bucket-list purchases, ongoing business expenses, or other key needs, your advisors can become their primary financial partners and help them avoid triggering taxable events. Plus, centers of influence such as CPAs and estate attorneys may be more likely to share referrals to your team if you offer liquidity options.
2. Stronger relationships and stickier AUM
By focusing on clients’ full financial picture including their liquidity needs, advisors can build stronger relationships and offer more personalized investment strategies. SBL also empowers advisors with another lever to adjust as clients’ capital requirements change: instead of clients having to sell off part of their portfolios, SBL can protect AUM while unlocking latent liquidity backed by those assets. Additionally, SBL programs feature debt-to-asset ratio haircuts that can offer a cushion in the event of market volatility.
Many advisors even see SBL acting as a sort of magnet for attracting more AUM from their existing clients, who seek to maximize their portfolios’ lending power and help keep their loans correctly collateralized. In a typical book of business among Broadridge clients, many advisors report between 10% and 15% in additional SBL-driven AUM coming into their firms.
3. An attractive recruiting tool, for both advisors and investors
An SBL offering can be an underestimated draw in the competition for both top advisor talent and new clients. As advisors continue to migrate away from wirehouses and larger wealth organizations, many of them may bring sizable loan books that need support at their new firms. The impact of “lending advisors” should not be overlooked; we know that advisors familiar with SBL will write approximately 24 loans per year, and often more. This means that wealth management firms working to attract new advisors should consider touting SBL capabilities upfront.
As mentioned earlier, investors are also increasingly looking for advisors and firms who can help them with credit for their borrowing needs. Not only are four-fifths of clients seeking help with lending and credit management, over one-third JH1 of high net worth individuals indicate that the availability of credit was a primary reason for selecting a wealth management firm. As services that were previously the realm of private bank clients become more in demand among the mainstream HNW population, SBL-as-a-Service (driven by a modern digital platform) is sure to be an attractive differentiator for leading wealth managers.
4. Ease and efficiency from end-to-end
Wealth firms and advisors utilizing Broadridge’s SBL-as-a-Service platform are offering liquidity with unparalleled speed and automation. The historical complexity and drawn-out workflows that used to keep wary advisors from adopting SBL have been replaced with user-friendly solutions that make the lending process easy, fast, and secure — even for RIAs and other advisors not affiliated with a bank. Our platform incorporates reliable evaluation and loan information, e-signatures, and other digital tools so advisors can originate loans and secure funding faster — often within just two or three days instead of weeks.
Beyond the standard lending process, our patent-pending predictive analytics leverage AI to help advisors reduce churn among existing borrowers and identify high-potential prospects, enabling them to grow their business more easily. Advisors can also access stress-testing, monitoring, risk management tools, and more, along with digestible online training. With robust support and seamless integration from end-to-end, advisors have what they need to lend with confidence and complete credit risk control.
5. Turnkey startup with lenders on-demand
It’s not just advisors who have it easier with our SBL-as-a-Service platform. Wealth enterprises and home office teams can connect clients to quick, cost-effective liquidity without the hassle of costly technology or risk management efforts. Firms have complete flexibility in customizing our platform to best suit their business model and IT resources — whether they prefer an all-in-one turnkey solution or select a few key modules. Integrating with your existing systems is simple, as we support over 200 plug-and-play integrations with third-party solutions, including Salesforce, FIS, Fiserv, Jack Henry, and many others.
You also don’t have to worry about sourcing your own lending bank partners, thanks to the Wealth Lending Network built into our platform. With instant access to lending banks and competitive rates (often lower cost than mortgages and HELOCs), you can start utilizing SBL right away with no upfront investment. Or, if you prefer to affiliate directly with a funding partner, we can help you connect with a premier lending bank.
Lastly, it’s easy to get your advisors and investors on board, by designing your ideal user experience. You can adopt our ready-to-go user-friendly interface, or incorporate our APIs into your current advisor workstation and investor portal. Independent advisors can also access our SBL platform and Wealth Lending Network directly through Morningstar Advisor Workstation. Our seamless Morningstar integration offers financial advisors the ability to determine their clients’ SBL borrowing potential and to connect with WLN partner banks to support their clients’ lending needs with their single sign-on.
