Financial advisors strive to reach a wide range of financial goals for their clients. Traditionally, however, advisors have stopped short of offering their clients lending solutions — encouraging them to turn instead to regional banks for their mortgage and real estate investment needs. In doing so, advisors overlooked, in Sandro Wealth’s view, a significant opportunity to attract and retain high-net-worth clients. These clients often end up moving their entire portfolios to the bank that offers them not only mortgage products but a full wealth management team.

Meet Holly, and Her Search for a Mortgage

To illustrate this potential missed opportunity, let’s look at a hypothetical but very plausible client scenario. Holly, age 36, is a high earner with $1M in investable assets, and a high probability of accumulating significant wealth in the future. In a recent discussion with Keith, her financial advisor, Holly mentions that she and her fiancé, Charles, are planning to buy a starter home in Chester, PA, where they will live around five years.

Keith congratulates Holly on her upcoming marriage and future home, but doesn’t feel comfortable enough to offer Holly guidance on securing a mortgage. As a result, Holly turns to the regional bank in PA to finance the home purchase. The bank assures Holly that if she becomes a banking client, they can secure a more favorable position for Holly and Charles’ mortgage application and approval, terms, and rates. Holly agrees, and informs Keith that she is transferring her $1M portfolio to the bank. Keith loses the client and the long-term value that Holly represents as an ascending HNW individual.

Identifying the Opportunity with BaaS

Now let’s look at this client scenario from another perspective. What if, instead of simply wishing Holly good luck in her marriage and home search, Keith was able to secure several quotes from multiple mortgage lenders on her behalf? Had Keith been in a position to offer Holly Banking as a Service, (BaaS), he could have retained Holly as a client, grown his relationship with her and her fiancé Charles, and extended the lifetime client value of both. Here’s how.

Adopting a BaaS model allows non-bank businesses (i.e. financial advisors) to offer financial products and services — typically through a digital platform — to their clients without needing a banking license. By providing a BaaS option, a financial advisor like Keith would be able to offer clients like Holly a range of banking products including a mortgage for a new home purchase. Holly would not have needed to go to the regional bank in PA, only to become a client and take her investment portfolio with her.

Bringing in the Right BaaS Partner

The challenge for most financial advisors comes in a lack of experience, knowledge, and technology platform needed to offer their clients BaaS. Which is why, when asked about banking products such as mortgages, financial advisors like Keith are often compelled to turn that potential business away. By finding and working with a partner who supports BaaS, financial advisors have a powerful tool to differentiate their practice and compete effectively against regional banks for HNW clients.

Sandro Wealth Management serves as this partner, by empowering financial advisors to offer clients an array of banking products without having to rely on a bank. Let’s see how Keith’s interactions with Holly might have unfolded, had Keith been working with Sandro Wealth to provide BaaS.

With Sandro Wealth as his partner, Keith could have extended Holly a BaaS network of trusted lenders to find the most advantageous mortgage for her new home. Working with Sandro Wealth, Keith would have the expert team and platform to:

• Secure two quotes from two different lenders.

• Complete an analysis of each mortgage, including interest rate, points, terms, and conditions.

• Leverage Sandro Wealth’s banking analyst to identify a lender that offers a better total cost of Holly’s mortgage over five years — the amount of time she plans to live in the home.

When Holly mentions to Keith that she considering going to a local bank for lending options, Keith, empowered by his partnership with Sandro Wealth, will be ready to show her:

• A comparative analysis of the two quotes he secured through the BaaS network.

• Additional information and analysis on the lender who has the most favorable quote.

Relieved that she doesn’t have to go through banks for her mortgage, Holly expresses her appreciation for Keith and his banking facilitation advice. She then shares her positive experience with her fiancé, Charles, who calls Keith to schedule a meeting.

How BaaS Brings in a New Client

In addition to retaining Holly as a client, Keith now has the opportunity to gain a new client in Holly’s fiancé, Charles. For his first meeting with Charles, Keith includes the Sandro Wealth team and explains their partnership. Charles expresses an interest in diversifying his investment portfolio with private investments. Together, Keith and Sandro Wealth detail their ability to support Charles’ goals with private market strategies, including private equity, venture capital, and growth technology private equity in addition to traditional investments.

Charles, age 33, is particularly interested in growth technology private equity strategies, and sets another meeting with Keith and Sandro Wealth to learn more. In that meeting, Keith brings in Sandro Wealth’s alternatives senior portfolio manager (CAIA, CPWA, CFA). The team explains two private equity strategies — a core buyout strategy from Apollo and a technology-focused private equity growth strategy with Fin Capital — to Charles.

Charles leaves the meeting armed with prospectus information and materials. He calls Keith a few days later and announces he’s ready to move his $1.6 million account from another advisor to Keith’s practice. Charles also informs Keith that he wants 10% allocated to private market strategies over the next one to two years, starting with 4% allocated to the fintech private equity growth strategy with Fin Capital.

Keith creates a personalized and separately managed account for Charles with individual stock and bonds through Sandro Wealth investment management, and allocates $60K to the fintech private equity funds.

The Sandro Wealth Advantage

By partnering with Sandro, Keith was able to retain Holly, who represents significant future wealth potential, as a client. What’s more, he has now added Charles, who also represents a long-term investment client, to his client roster. Working alongside Sandro Wealth, Keith wins both clients by:

• Proactively preparing for Holly’s banking needs as she plans for a new home purchase.

• Completing a comparative analysis of lenders and quotes to show Holly that he’s done his due diligence.

• Simplifying the lending and mortgage process for Holly and finding favorable financing based on her specific goals and plans.

• Providing an exceptional client experience that leads to the referral to Charles.

• Presenting Charles with expert knowledge and private market investment strategies that fit his core values, goals, and preferences.

Learn how BaaS brings your advisory practice more opportunities for revenue growth.

Contact Sandro Wealth Management to discuss integrating Banking as a Service into your practice offerings.

Disclosures:

Sandro Wealth Management, LLC (“Sandro Wealth”) is a registered investment advisor. Advisory services are only offered to clients or prospective clients where Sandro Wealth and its representatives are properly licensed or exempt from licensure.

The information provided is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor's particular investment objectives, strategies, tax status or investment horizon. You should consult your attorney or tax advisor.