There are many opportunities for registered investment advisors and independent broker dealer firms in the world of alternative investments. They do face some challenges, however, and JP Dahdah, CEO of Vantage Self-Directed Retirement Plans, talks with Alternative Investing News about the pain points these advisors and brokers face.
One of the biggest pain points in allocating more client funds to alternative investments is doing due diligence of the alternative investment products. Some firms don’t have the bandwidth to do extensive due diligence, notes Dahdah, and because they’re not publically traded, it can be more difficult to identify which products are suitable for their high net-worth clients.
Data integration is another pain point Dahdah points out. As these are not publically traded entities, they’re not valued on a daily basis. For investment advisors, it can be frustrating to pull the information of multiple companies that are serving as custodians for the assets and having to put in a double entry into their management software. He says that any time you can work with a Self-Directed IRA company or custodian that provides that data integration, it will alleviate some of those pain points.
Most investment advisors are billing their clients on an assets under management way. As such, Dahdah says it’s important to aggregate the value of the alternative investments that are being held at third party custodians so they can get a true sense of the client’s assets, which makes it easier for them to bill and illustrate to their client their overall portfolio on one statement. He feels technology is an area where there are still a lot of pain points in the industry but that it’s getting better. Anything related to the viability or suitability of alternative investments in a client portfolio, having access to alternative products, especially liquid offerings, can sometimes be cumbersome.
Dahdah believes the market is shifting with the popularity of alternative investing and it’s become easier for registered independent advisors and registered representatives to identify more comprehensive lists of alternative investments for their clients.
Vantage provides complimentary custodial solutions for firms. Dahdah started as a registered investment advisor and when he started Vantage, he had a good understanding of what registered investment advisors and independent brokers need out of a custodial company. Vantage was developed and designed to offer a personalized level of service and the advisors and brokers coming from a traditional background, are gaining the experience of working with a new company and having to direct assets to another entity. Dahdah feels they’re at the mercy of those entities and the level of service they provide.
At Vantage, they’ve looked hard at the pain points that advisors have, whose reputations are on the line, to make sure the new relationship they’ve created with a financial services company doesn’t drop in the customer service area. At Vantage, they take the approach of developing a company that allows the advisors to feel comfortable. They know that their high net-worth individuals that are placing money in these opportunities through Vantage, are still able to receive a “boutique-style,” high level of service that will create efficiency in their transaction experience, as well as a level of knowledge about the types of alternative investment intricacies with low fees.
JP Dahdah is the CEO at Vantage Self-Directed Retirement Plans and spoke with Alternative Investing News providing online alternative investing video news content. Alternative Investing News is a featured network of Sequence Media Group. This video was brought to you by Vantage Self-Directed Retirement Plans.