Why Advisors Need To Incorporate Credit Into Their Practices

Peter Stanton is CEO of Advisor Credit Exchange (www.advisorcreditexchange.com)

Russ Alan Prince: Tell me about Advisor Credit Exchange.

Peter Stanton: Advisor Credit Exchange—ACE—is a technology-empowered network that brings together lenders and wealth managers to make it easier for investment firms and advisors to deliver the financing solutions that help build and maintain their clients’ net worth and best meet their financial goals. ACE’s key innovation is that advisors can know—in advance of speaking with their clients—what loan options are available for presentation, along with clearly presented pricing and terms. This breakthrough, quite literally, takes the mystery out of lending for advisors and their clients. By integrating liability management with asset management, ACE creates new opportunities for advisors to help clients achieve financial wellness.

Prince: If credit is so important, why aren’t more advisors proactively offering it?

Stanton: Most advisors know that sound liability management is critical to building client net worth and therefore important to offer. Yet it’s not their traditional strength, so typically they treat lending as an accommodation. They react to financing as opposed to being proactive with it. 

We have partnered with Envestnet to make it easier for wealth managers to advise clients on their credit needs and present best-fit solutions from lenders selected for their high quality of service. The Envestnet Credit Exchange, powered by ACE, offers advisors access to a broad range of secured and unsecured loans, from $10,000 to $25 million and above, all on a single, easy-to-access, fully integrated platform. 

These financing solutions include residential real estate, securities-backed, and signature loans and are selected from a list of opportunities based on each client’s financial data and matched with our lending partners’ product offerings. The exchange provides data-driven, pre-selected credit options which position advisors to recommend loans to their clients with confidence—minimizing the risk of credit decline and concerns about competitive pricing. In short, we are harnessing technology to take the mystery out of lending for advisors and their clients, so advisors can proactively meet their clients’ credit needs. 

Prince: What trends are advancing in the industry regarding how advisors are offering loans to their clients?

Stanton: Through financial professionals, securities-backed loans are traditionally the most common loans offered. But recently, the industry has recognized that real estate and unsecured personal loans account for over 90% of clients’ personal liability balance—real estate loans alone account for over 70% of consumer borrowing. 

We are seeing a rising demand for the full range of credit solutions and expect it to keep rising in the industry. To meet this need, the Envestnet Credit Exchange now provides advisors that rely on the Envestnet ecosystem with access to all three core personal credit categories. And now we are also preparing to meet a growing interest from advisors to provide a full suite of business loans—working capital, term loans, and real estate loans. Notably, many of an advisor’s best clients are small business owners.

Prince: How does credit help clients achieve The Intelligent Financial Life™?

Stanton: In order for clients to experience The Intelligent Financial Life, advisors must acknowledge it’s not just the assets they have to advise on. Today, investors want advice based on their entire financial picture which includes planning, investing, managing credit, and protection. 

With that in mind, advisors should include lending as part of their financial plan package for investors, and focus on both sides of the balance sheet, which are both equally important. By doing this, it could lead to the discovery of unknown assets that can have a significant impact on the planning and advice advisors provide to better position clients for success. 

Credit is a vital area of a client’s financial life, and our technology—together with our subject matter experts that support advisors—are helping advisors seamlessly incorporate credit products and guidance into their practices. This level of engagement shows clients you truly care, which can foster trusting relationships that are naturally sustained over time and put you in a position to serve as your clients’ primary financial contact—able to provide funds when they need it the most—which can lead to referrals or additional growth opportunities over time.

Prince: How does the Advisor Credit Exchange compare with other platforms offering credit in the advised-client space today? And in the future?

Stanton: ACE believes the key to success is providing every tool needed for advisors to proactively meet their clients’ credit needs. Unlike other credit providers, the Credit Exchange presents pre-selected credit options based on the client’s financial data and profile. What’s more, we provide advisors with the tools, training, and coaching to deliver a considered assessment of a client’s credit needs and guidance on the financing that will best meet their overall financial objectives. Now financial advisors can truly be their clients’ financing advisors! That’s what the exchange is all about. 

As for the future, ACE is currently active, thriving, and expanding based on advisor and investor demand. We are constantly adding and planning for additional lenders, new loan types, and a broader market expansion throughout the year, with the goal of maintaining a robust suite of lending capabilities that will align with the vast majority of investor loan requests. 

While we are a powerful advisory platform that integrates the services and software you need to provide value and streamline your business, the technology itself is merely a gateway that can enable you to offer consultative support and truly unified advice across all aspects of your clients’ finances. With loan opportunities curated for each client’s unique financial circumstances, you can leverage ACE to help make you a more efficient and effective advisor, provide specialized support, and enable the growth of your practice. That is what makes us so unique. 

RUSS ALAN PRINCE is the Executive Director of Private Wealth magazine (pw-mag.com) and Chief Content Officer for High-Net-Worth Genius (hnwgenius.com). He consults with family offices, the wealthy, fast-tracking entrepreneurs, and select professionals.

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