Andy Sathe is a Shareholder at MCF Advisors (a boutique Registered Investment Advisor with offices in Greater Cincinnati, Lexington and Louisville) where he serves as an advisor to business owners and clients who tend to prefer long-term relationships and thoughtful decision-making.

In this episode, Andy shares about the differences between a broker dealer, registered investment advisor (RIA), and trust company, and how each model evolved. Andy stresses that the fundamental question for clients should be what problem do they want to solve, not who they want to work with. The fee structure, business model, and incentives of a particular The RIA industry has seen a tremendous amount of consolidation in the last ten years, with private equity firms buying up firms in the space. This has been good for some, as economies of scale are gained, but it can also create issues, such as the loss of personal touch and succession planning. While the proliferation of RIA's is great for clients, it can be confusing for advisors who may not be used to working with so many different firms.

Listen in!

Key Highlights:

[00:01 - 06:16] How Registered Investment Advisors Offer Clients More Choices

Registered investment advisors (RIAs) offer clients holistic, integrated investment management services
The RIA model evolved in the 1980s and 1990s to address the growing demand for personalized service
The incentives of a RIA should be the driver of decision making

[06:17 - 18:00] RIAs Advise Clients on the Pros and Cons of Private Equity

Why there are people who approach us who are really interested in running their own transaction
Why private equity is entering the retirement account space, but clients may not be happy with the experience
Private equity owners are looking for ways to save costs and increase profits, which could disrupt funds within the industry
Clients should ask their wealth manager about their ownership structure and capitalization, as any question could be on the table during a transaction

[15:44 - 22:21] Real Estate Sponsors Remain Stable Amidst Uncertainty

There has been an increase in 1031 investors, a reduction in retirement account investment, and a decrease in purchase price from early in the year
The market is challenging and the value proposition for sponsors is harder to prove out
The Fed wants rates to increase slower but terminal value will be higher than anticipated earlier

[22:22 - 31:51] Alternative Investments: A Guide to Keeping Clients Safe in a Volatile Market

There is a lot of volatility in the stock and bond markets, which is keeping many people up at night
There is a general feeling of angst among investors in the current market conditions, with many questioning why this downturn is happening and how long it will last
All we can do is reinforce the plan that has contemplate situations like this.

[31:52 - 34:38] How to Profit from Market Volatility

There is a lot of change happening in the wealth management industry, with millennials becoming more involved in holistic planning
There is a shift from baby boomer to millennial planning, with robo advisors becoming more prevalent
There are opportunities for businesses to come in and automate parts of their planning process, bringing peace of mind to clients

[34:39 - 36:55] Closing Segment

Key Quotes:

“There's a ton of cost savings available to you at the private equity owner if you just put everybody on the same investment platform.” - Andy Sathe

“There really aren't any dumb questions when you're talking to an advisor.“ - Andy Sathe

Connect with Andy:

Linkedin:https://www.linkedin.com/in/andy-sathe

E-mail: asathe@mcfadvisors.com

Connect with me on LinkedIn!

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