Financial Advisors

Value Creation, Innovation and Democratization for Asset Managers

Being the first to innovate new ground and to create new solutions takes a specific mindset and series of behaviors. The Institute passionately believes that strategic thinking, innovation creation and strategic account management represent the nexus of business forces needed to address our new operating environment that is driven by an accelerating rate of change.

Strategic thinking challenges all assumptions, asks tough questions and looks at traditional industry operating and business models from a different perspective. Innovation development requires a commitment to the ongoing execution of new ideas that creates new client value. True strategic partnerships are not just vendor relationships or firms that are part of your delivery chain, but a strategic operating alliance is one where you are inextricably connected and sharing deep resources and results at the operating and business plan level.

A great example is FLX Distribution, which provides an excellent case study of the innovation process at work in the financial services industry. As a financial technology company committed to re-engineering the financial services distribution model, the firm created the first Resource and Asset Management Platform (RAMP), which brings financial professionals together in a unique way. Recently, FLX received the 2020 Money Management Institute/Barron’s Disruption Award, an industry recognition for their groundbreaking technology and process that “will fundamentally alter the future delivery of advisory solutions.”

I reached out to Institute member Mark Spina, president and COO of FLX Distribution, to better understand their innovation process in creating a new tech-enabled ecosystem and working to revolutionize the financial distribution experience that occurs between asset managers, financial advisors and wealth management firms.

Hortz: How would you define what your RAMP is and how you came to that name?

Spina: Well, starting with the name, it is an intentional derivation of TAMP, the moniker that has become synonymous with platforms positioned to help advisors implement high-quality investment strategies at scale. Our RAMP is a Resource and Asset Management Platform designed to facilitate higher quality and lower friction interaction between asset managers, financial advisors and wealth management firms. The RAMP also conveys the FLX platform’s ability to help asset managers accelerate into distribution success and scale up.

Hortz: Can you walk us through how you looked at other industries, companies and business models for ideas for the development of your RAMP? How did they provide key insights and components to your platform?

Spina: We have taken inspiration from multiple cross-industry firms and business models. provided some of the initial conceptual ammunition with our implementation focused on systematically connecting asset managers seeking distribution talent with high-quality professionals seeking differentiated managers to represent.

As the Covid crisis took hold and we gathered further feedback on the initial FLX model, the sharing principles of Uber and other sharing economy companies came more to the fore. We shaped the offering to allow managers to share the operational costs of full distribution teams or more targeted functional teams, e.g., enterprise national accounts teams, internal/external wholesalers, marketing, sales collateral creation, etc. 

We have since intentionally expanded the scope of the platform to be a full ecosystem where we are seeking to revolutionize this corner of the industry to increasingly function like Shopify – a platform business model that enables merchants to commercialize their products on its cloud-based e-commerce. Shopify’s core business is a subscription-based service whose core mission consists of improving commerce for all, helping entrepreneurs of all sizes to reach their greatest potential in business. FLX evolved from a creative mixing of these business models into a novel, strategic growth ecosystem offering for asset managers, financial advisors, and wealth management firms.

Hortz: In rethinking the traditional financial distribution marketplace, how did you come to derive your perspective on the strength in fragmentation of this area?

Spina: Everyone else in the industry was focused on and reporting regularly on the growing concentration of the fund business where the largest 25 fund complexes grew from 2005 with 67% share of mutual fund and ETF assets to 2020 with an 81% share of total assets. We purposely focused where no one was looking and found opportunities and advantages by applying the sharing economy and other business models we just discussed into this area of the financial marketplace. That new perspective helped us redefine for a large swath of the industry who their competitors and strategic partners really are or can be.

Hortz: How exactly did you put these ideas together to “provide” asset managers a better way to compete?

Spina:  As I just mentioned, in a market with thousands of asset managers, the mega firms are increasingly dominating. Ambitiously, we designed our platform to stimulate what we felt would be the democratizing of the asset management business.

By bringing asset managers together into a tech-enabled consortium, we could help them leverage resources for the simulation of scale, removal of barriers, and offer opportunities for creative partnering. This now allows managers to tightly focus on their investment management capabilities and bringing their core competencies to market.

Perhaps, just as important, the democratization of the asset management business is also good for financial advisors and wealth management firms. Creating this new ecosystem brings more access to new ideas and durable solutions between key industry players in a more engaging and creative way. This can help advisors avoid building look-alike solutions with only the top asset management firms represented in client portfolios. By aggregating a diverse, fragmented group of asset managers, we believe we are changing a limitation to an advantage by providing a consultative approach that offers many investment solutions versus pushing product.

Hortz: How would you describe the thematic hallmarks of your platform and how they bring your platform to life?

Spina: I would say that the hallmarks of our platform come down to access, flexibility and scale. That is what really animates our platform and, when combined, they can change the dynamics of the financial distribution experience.

Access – we consolidate and simplify engagement for product and research due diligence teams by creating a single point of contact for dozens of asset managers and their products. We identify and curate asset managers to fit advisor needs.

Flexibility – the platform offers a broad range of business, data and content solutions to home office professionals and advisors. These represent value-add intelligence and tools that can be mixed and matched and only used when needed to grow their practices and increase efficiency.

Scale – the platform can add significant economic value to its partners and a differentiated set of products from managers who independently may not have the resources to compete.

Hortz: What else does your RAMP specifically bring to advisors and wealth management firms?

Spina: Wealth management firms, their advisors and independent RIAs have accepted decades of an interruption-based business model with lots of friction. For 40-plus years, asset managers would cold call and/or walk through an office. More recently those efforts have been better informed by data but still largely reliant on “breaking into an advisor’s book.” While acknowledging the vital role that salespeople will continue to play, what if the FLX platform could pair and deliver high-end content, timely insights, and a genuine understanding of advisor preferences. What if we could turn the interruption model into an invitation model whereby advisors invite our platform and its members into their business as a partner for investment and business solutions, as the advisors’ advisor. We believe that the FLX platform can be the catalyst to that revolution.

Hortz: Any other thoughts or recommendations you would like to share?

Spina: I would like to invite readers to learn more about our new financial services distribution model by visiting our website to explore the platform and some of our core products and services. We specifically designed them into a new ecosystem for your growth and competitive advantage in our industry’s hypercompetitive marketplace.

The Institute for Innovation Development is an educational and business development catalyst for growth-oriented financial advisors and financial services firms determined to lead their businesses in an operating environment of accelerating business and cultural change. We position our members with the necessary ongoing innovation resources and best practices to drive and facilitate their next-generation growth, differentiation, and unique client/community engagement strategies. The institute was launched with the support and foresight of our founding sponsors - Ultimus Fund Solutions, NASDAQ, Pershing, Fidelity, Voya Financial, and Charter Financial Publishing (publisher of Financial Advisor and Private Wealth magazines).

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Bill Hortz

Bill Hortz is an independent business consultant and Founder/Dean of the Institute for Innovation Development- a financial services business innovation platform and network. With over 30 years of experience in the financial services industry including expertise in sales/marketing/branding of asset management firms, as well as, creatively restructuring and developing internal/external sales and strategic account departments for 5 major financial firms, including OppenheimerFunds, Neuberger&Berman and Templeton Funds Distributors. His wide ranging experiences have led Bill to a strong belief, passion and advocation for strategic thinking, innovation creation and strategic account management as the nexus of business skills needed to address a business environment challenged by an accelerating rate of change.

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