Demographic Study of 2009 T3 (Technology Tools for Today ) Attendees

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1 Demographic Study of 2009 T3 (Technology Tools for Today ) Attendees Summary: Demographic data collected from 2009 T3 attendees during the conference registration process show attendees to be: 93% advisory firm owners, IT and/or admin personnel and 7% outsource service providers; 31% advisory firm owners in business over 20 years, 36% between 10 and 20 years, and the remainder less than 10 years; 36% of advisory firm owners managing over $100 million of assets, 20% managing $50 million to $100 million and the remainder managing less than $50 million; 67% fee-only, 32% fee-and-commission (or fee-based) and 1% commission-only; 49% affiliated with an independent broker-dealer, 48% with third-party custodians and 3% with insurance broker-dealers; 70% CFP-credentialed, 22% CPA-credentialed and 8% PFP-credentialed; 66% members of the FPA only, 10% NAPFA only and 24% members of both professional organizations; T3 attracted approximately 400 attendees in 2009.

2 2 Attendee Breakdown In marketing the T3 conference to the financial advisory community, Virtual Office News LLC ( VON LLC ) seeks to attract independent advisors either fee-only or feebased with business models requiring them to make their own technology buying decisions. Further, it is VON LLC s goal each year to attract at least 50% of its attendees from the ranks of advisory firm owners those in control of the purse strings. In addition to advisory firm owners seeking technology solutions to improve office and client service efficiency, T3 attracts three other types of technology users: IT personnel (usually from the advisory firms attending either with the firm owners or on their own), advisory firm admin personnel and outsource service providers. The latter category of attendee has been growing each year as outsource providers e.g., portfolio management service bureaus, virtual assistants, virtual CFPs et al look for technology solutions to offer advisors and seek to form relationships with both advisors and technology providers. Size and Industry Tenure of Advisory Firm Attendees T3 attracts both veteran advisors with many years of industry experience as well as new entrants to the industry. Both groups seek technology solutions one as first-time buyers and the other as long-time advisors who have outgrown the technology platforms from which they currently operate. Copyright 2009 Virtual Office News, LLC

3 While not all advisor attendees manage assets, most do and the graph below shows that the vast majority manage enough client money to justify the need for advanced portfolio accounting, CRM and other systems essential to serving growing numbers of high-net-worth clientele. Concomitantly, 88% of advisor attendees have survived their first five years in business and are confident enough in their survival to begin installing advanced technology systems as represented by T3 s sponsors.

4 Advisory Firm Attendee Business Models Broker-dealer and Custodian sponsors gear their technology platforms one basis on which they compete to advisors according to business model, i.e., is the advisor BD-affiliated vs. custodian-affiliated and, hence, how able is the advisor to take advantage of a particular broker-dealer or custodian s platform? That said, advisory firm business models are becoming more of a gray area because many of today s fee-based advisors are largely fee-only and many of these advisors are affiliated with independent broker dealers. In other words, one can t say that because an advisor charges primarily fees, he s a NAPFA member or otherwise ineligible for broker-dealer services. Looking at a number of related measures, however, we can conclude that a large majority of T3 s attendees are broker-dealer affiliated in spite of their mixed fee orientations. Consider, first, professional association affiliation. According to the above graph, two thirds of attendees are FPA members but not NAPFA members; the remainder are NAPFA-only or both NAPFA and FPA members. NAPFA

5 members must meet strict requirements in order to call themselves Fee-Only, suggesting FPA-only attendees are brokerdealer affiliated or eligible to affiliate with a broker-dealer. The picture shifts a bit as we look at broker-dealer vs. custodian affiliations. Approximately half of attendees are broker-dealer affiliated, while the other half operate through third-party custodians (many of which are conference sponsors, like Charles Schwab, Scottrade, TD Ameritrade, Fidelity et al). Not surprisingly, when asked about their fee structure, two thirds of advisory firm ownerattendees indicated they are fee-only although only one-third say they are members of NAPFA. Again, this is not a contradiction inasmuch as many broker-dealer affiliated advisors offer services on a fee-only basis. Conclusion From the above we can conclude that T3 attracts a wide variety of independent advisors, all of whom are responsible for configuring their firms technology capabilities and who come to the T3 conference looking for solutions. Sponsors that cater to primarily smaller vs. larger advisory firms, or primarily fee-only vs. feebased firms, or newer vs. more established advisors, or BD-affiliated vs. custodian-affiliated advisors will all find a fertile market among T3 attendees.