Hello and thank you for joining today's webinar. My name is Cade DeNazario Akers I'm a Product Manager with Orion Planning and today my colleague and friend Jamie, Susanin and I will be covering some terrain around this historic wealth transfer period that we currently find ourselves within and will be within for some time. I will cover some relevant research and data to help you better understand the potential upsides and risks of this transfer period. And then of course we are going to discuss some tools and resources that Orion has available and at the ready for you to help you navigate but also thrive in this competitive environment. So thanks for joining. So the big headline here is that there is money in motion or potentially money in motion and more specifically 10s of trillions of dollars. Of potential money in motion. The slide you see in front of you now is a graphic of the estimated inherited wealth that's expected across 4 contiguous generations between now and 2045. Now, Generation X stands to inherit the greatest portion of these assets transferred to Ayers, and that includes nearly $9 trillion over the next 10 years, followed closely by millennials. Now this represents an enormous opportunity for advisors, of course, to grow their practices and to preserve and nurture their existing relationships. And on the other side of the Ledger, it represents an enormous risk. And that's why we're here, gathered today to discuss those risks and how to address them. A Saruli study revealed that more than 70% of heirs will change financial advisors. And if you're like me, then you find this statistic fairly arresting. And it's important to understand some of the potential driving forces behind this pattern and why these decisions are made by investors. Another recent study that I'll reference comes from Morningstar and details client attrition across six different categories. You might have thought that poor performance was more of a primary factor in client attrition, but in fact poor performance came in at 4th place with only 11% of participants in this research indicating that they left their financial advisor due to performance. I'd like to draw your attention to numbers one and 232% of respondents said that the quality of financial advice and services was the impetus for making a change, and 21% of respondents cited the quality of the relationship itself. Now, interestingly, in the full report, the author's details and preventative steps for advisors to consider based on the results of the study. And the preventative step recommended in response to the two most cited reasons that clients leave their advisors was to emphasize the relationship. Now I think it's reasonable to tally the attrition sided due to the quality of the financial advice and services rendered and the quality of the relationship and that leaves us with 53%. So if we leave aside cost, the quality of communication, the comfort or discomfort in handling financial decisions and poor returns. The remaining 53% of client attrition can be addressed somehow by advisors better relating to their clients. All right. I've got just a couple more data points that I'd like to share that I think are relevant. And I won't ask you to stop me if you've heard me say these before because I would surely be stopped. And I also believe that they bear repeating over and over again. So from an Accenture study, we know that 91% of clients want an advisor who just gets them. And 64% of financial planning clients don't believe that they have anyone to talk to about their money, including their advisor. Now as a former advisor, my jaw is always a gape when I read the statistic and I don't mean to be a fear monger. In fact, I really think this is heartening news for three main reasons. The first reason is that we know that we're at an inflection point. We're in a historic wealth transfer period and. The baby boomer clients are transferring wealth on mass to Generation X and millennials and that leaves us a tremendous opportunity to prepare, to grow and to prepare to preserve the relationships that we have. It also gives us a chance to influence the outcomes that advisors experience and that is always a liberating feeling. The idea that we we actually can can make changes behaviorally that will influence the outcomes. The second reason is that we know what clients want in advisors. We know also what are likely to be the main reasons why clients leave advisors. And the majority of those reasons are completely preventable in my opinion and have to do with the way that advisors relate to their clients. And the third reason I feel heartened is that Orion has tools and resources. That specifically and directly address the reasons that clients cite for either having left or for leaving their advisors and Jamie and myself are going to go over three of those, one of which is BeFi20. Secondly, broader goals based financial planning as a way to engage the entire household and #3 custom indexing which Jamie will cover the first resource. That can help advisors navigate this historic wealth transfer period is BeFi20-BeFi20 was developed by Doctor Daniel Crosby. Now, originally, BeFi20 was intended to help address potential financial conflict between couples. It's changed a little bit since then. The use case is much broader. It can be used specifically for individuals for their own purposes, but also for business partners, for roommates, for friends and family, and of course, for romantic partnerships. Now I really believe that BeFi20 this tool could be valuable on on several different levels and let's let's start with the value that it can add to your clients lives. We know that folks don't have as great access to their own values whether financial or otherwise as they believe that they do or even as they would as they would report that they do. So a tool like this. Helps investors discover more about their own relationship to money and how it impacts the most important people potentially in their lives. Lastly, it helps them see the advisor who is providing this tool and resource to them more as an ally and as a resource. And it starts to really chip away at that idea that we know 64% of financial planning clients have that they don't have anyone to talk to about their money. Now for the advisor, it helps advisors understand their clients. And their relationship to money more clearly in really key areas like communication and worry and purpose. And so a savvy advisor is going to, you know, read these reports and understand, you know, which of their clients are very open communicators and which of their clients aren't, which of their clients have high anxiety around financial events. And that can help you tailor your approach in your client conversations and in your financial planning process. It also helps advisors to normalize behavioral finance conversations to help encourage great investor behavior and it helps to deepen the advisor client relationship. And lastly, with respect to the wealth transfer period that we're currently within, it helps advisors to deepen their engagement with the entire household. Whether you know whether everyone is living in that household or not, often, often the people who are the most important to your clients are going to be their potential heirs. And starting with a tool like BeFi20 can really help to engage people in a way that they will appreciate and relate to. The second resource I would like to discuss is Orion Planning. Orion Planning of course is where BeFi20 lives and it's also a part of the Essentials and Advantage Orion stacks, which is great news. But before there were tools like BeFi20 that are very targeted to, you know, teasing out financial values and dispositions. Financial planning and and going through that process was one of the major ways that advisors and clients were able to you know bubble up some of the the values that that that most influence your clients lives. You know having a conversation about budgeting forces folks to to prioritize you know where their dollars go and why they go there and that that of course is really valuable information for advisors to help. Organize next steps and and and strategize around and. Even though financial planning is more common these days, you know it's. It's a part of most, you know, advisory relationships in some form or fashion. It's still important not to lose sight of its value. It's still an immensely valuable way. To do some discovery and rediscovery for clients who are existing in your practice, but also your client's heirs to more deeply engage the entire household and not just the people who are right in front of you. An advantage, I think, to Orion planning is. Our hybrid approach, we are a goals based tool and we're backed by a powerful cash flow engine and we know from research that goals based planning is more effective when it's measured in terms of investment outcomes. So with Orion planning, we've structured our workflows to be #1. A lot more abbreviated. You have the option of just sending out you know a quick and easy you know retirement workflow for example. It takes about 5 minutes for clients to work through that and instead of having to go through you know from A-Z and and present all kinds of you know policy documents and and and the more comprehensive approach which of course don't get me wrong I do believe is valuable. If you're engaging a prospect in financial planning or you're offering a a second opinion service it's a real value to be able to just. Send out, you know, a quick and easy workflow and and those clients or prospects can get directional results from you, you know, in about 5 to 10 minutes. Of course, later on there's going to be opportunities to engage more deeply, to go through every single one of our workflows, everything from estate planning to insurance to emergency fund to retirement and everything else that we have. But I I mentioned this because I think it is, it's one really easy and and immediately valuable way that advisors can get engaged and have a reason to reach out and engage the the entire household. And now with great pleasure, I would like to introduce to you my friend and colleague Jamie Susanin and who is a Chartered Financial Analyst and Senior Portfolio Manager for Orion custom Indexing to talk about how personalization. At the portfolio level can help advisors best maximize the opportunity to engage with clients during this historic wealth transfer period. The third tactic that we wanted to cover today with all of you is how to consider investors values when looking at their portfolios and how to make them feel a little bit more connected to their investments and portfolios and really the reason that we think this is. Particularly important for advisors today is the fact that investors and especially high net worth investors are looking for more personalization in their portfolios. And in actually another study that I read recently from NASDAQ, advisory firms are losing up to 90% of their clients when the first spouse in a married couple passes away. And usually that's because that surviving spouse doesn't feel as connected to their investment portfolio. So by providing customization when it comes to investments, our goal is really to help retain again those client assets, not only in this case across a married couple for example, but also especially when we look at retaining clients across multiple generations as well. And as it relates to Orion custom indexing, we do have a few different ways that we're actually accomplishing this personalization in clients investment portfolios and as we construct our portfolios by owning individual securities that make up an index. So rather than for example owning SPY as an ETF for you know broader market exposure. We're going in and we're buying stocks like Apple and Microsoft and Facebook in either a separately managed account or as a sleeve of a broader UMA portfolio. So again, by setting up the account or the sleeve of the account this way, it sets us up for this customization. So one way could be applying ESGSRI or faith-based screens to the portfolio. For example, maybe the client wants to exclude tobacco companies from their portfolio. So we have data again on which companies in that index, for example, would need to then be screened out of the portfolio. They also might want to restrict whale meat, which yes, is really how granular some of our screens get that we can apply to the portfolios. And again, really allowing the client to kind of create really that own that custom index for example. Another way would be for clients that have specific individual securities that they'd like to customize. And again on a similar note, it could be excluding from the portfolio. So client maybe doesn't like a particular company and they don't want to be invested in whatever that company might be for example. But on the flip side, it could be you know client wants to own a specific. Percentage of a certain company, right. They want to make sure they're always kind of owning a particular company as well. So we can go on either side of the spectrum. Another way would be these sector and industry ranges, for example. So maybe the client owns an auto dealership and we want to restrict the auto sector or industry from that index. Again, trying to limit that client's exposure to the same type of industry and really again kind of customizing that portfolio based on their needs. The last one that we have here, often a very common one is incorporating concentrated positions into the portfolio. We do see this a lot, for example, with corporate executives and we can certainly take a similar approach to that car dealership and an auto industry example that I mentioned. In terms of maybe the clients, a Microsoft executive and we want to restrict the technology sector from the portfolio, but we could actually take that another step further and say, well let's actually incorporate that stock that Microsoft since the portfolio and start to unwind it over time. So as we not only spread out that capital gain over a longer period of time and trying to reduce that tax bill for the client. We can also really start to then diversify the portfolio as well. So as we and that example start to sell off Microsoft as we buy new names or we're looking for names that really complement and try to offset and diversify the Microsoft exposure in the portfolio. So a lot of different ways to really accomplish this when it comes to when it comes to custom indexing and certainly none of these are mutually exclusive. We do have clients that really take advantage of a lot of different types of customizations in their portfolio when it comes to how this actually works and implementing for the account with custom indexing, we built an interface that really we wanted it to be. And easy to use experience for advisors to add customizations to these portfolios. So we have here just a screenshot of an example hypothetical for a client where we were adding a number of these restrictions to the portfolio. So you'll notice at the top right, in this case the client wanted to exclude Tesla from the portfolio. So that meant we were selling any existing shares of Tesla and we were restricting it from purchase going forward. At the middle there, we were restricting the technology sector as well from a request from the client. And then at the top right under that ESG restrictions category, you'll notice we have six of these categories that were selected here. So actually draw your attention to the bottom of the screen Speaking of ESG. And what we did with this interface, again with custom indexing is we have a list of probably 20 or so different ESG screen categories and including that whale meat that I mentioned. And what we found was clients tended to pick similar groups of restrictions. And so for example, we have what we call the climate conscious persona selected on the screen here. And the reason for grouping these together was we found that clients who were wanting to restrict nuclear energy from the portfolio tended to also restrict oil and gas, shale energy, thermal coal, etcetera. So what we wanted to do again from the mindset of keeping this a very easy to use interface was kind of pregroup them for you allowing you to really again do this in a very scalable way for the for the client and the portfolio and if. Climate conscious to us is different than climate conscious to someone else. You'll see the little X's and you can certainly even take that customization a step further and create your own personas as well. So again our our goal with custom indexing, a lot of different ways to apply this in the portfolio, but the goal again at the end of the day is, is the fact that each client is very different. And their portfolio should reflect that as well. So whether it's through customization and how that customization looks to different clients, again, our goal is to have that client feel very connected to the portfolio, feel like they have their own thumbprint on the portfolio again as well and and really feel like they're getting, they're getting a lot out of their investments not only from that market exposure. To quickly wrap us up here, we really appreciate your time and a couple quick next steps for you as we wrap this up. First one would be to experience BeFi20 yourself through the link on your screen, there you'll be able to access it. Second would be to set up an Orion planning link to really again to start to engage your clients errors in this conversation. And then lastly, to get started on a personalized portfolio through that Orion custom indexing solution that we have, you can visit us at our website orion.com/custom Dash indexing or also contact our team at customindexing@orion.com. Thank you again for your time today. We really appreciate it and we will see you next time. _1714174662088