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Financeware Crosses $50 Billion in Assets on Strong 2002 Performance
March 4, 2003
Financeware, Inc.
Press Release
FOR IMMEDIATE RELEASE
CONTACT
Chris Bonner
Financeware, Inc.
804/644-4711 ext. 428
cbonner@financeware.com
FINANCEWARE CROSSES $50 BILLION IN ASSETS ON STRONG 2002 PERFORMANCE
RICHMOND, Va.--(BUSINESS WIRE)--Feb. 28, 2003--Financial advisors struggling through the worst bear market in decades have flocked to Financeware's "Wealthcare" advisory process over the last three years bringing total assets on the Financeware system to more than $50 billion. These assets are consistently growing at a rate of between one to two billion dollars a month, the company announced today.
The company attributes its growth to completely rethinking the discipline of providing financial advice and resolving contradictions in traditional advising disciplines that, to date, have failed both financial advisors and their clients. The revolutionary new process, called "Wealthcare", is based on completely different premises which results in a financial advisor delivering to their clients: confidence in achieving their financial goals, without unnecessary sacrifice to their lifestyle all while avoiding undue investment risk.
David B. Loeper, CIMA, CIMC, the president and CEO of Financeware commented, "The bear market and its effect on investors has made it painfully obvious that the traditional advising process of identifying a client's maximum tolerance for investment risk and then positioning them to experience it is completely irrational." He continued, "Investment risk is something investors naturally want to avoid if possible and they should only accept the level of risk that is necessary to achieve the financial goals they value rather than intentionally accepting a portfolio designed to experience the most pain they can bear."
The company believes its "Wealthcare" advising discipline enables financial advisors to change the way they communicate with their clients. Instead of an abstract question of risk versus return, the process turns risk tolerance into a question of risk versus early retirement or risk versus a beach house. In many cases "Wealthcare" exposes the previously hidden reality that the client's maximum tolerance for investment risk isn't needed to confidently achieve their goals.
While the explosive growth in assets under this process is impressive, it excludes the results from Financeware's desktop and custom solutions units that totaled 4,300 financial advisors at the end of 2002, and included only the additional 1,400 advisors that directly contract with the company. These 1,400 advisors come from all walks of the industry and contract with Financeware to help them either learn how to integrate the "Wealthcare" discipline into their business or otherwise take advantage of the company's technology, educational services, or service bureau financial advising support. While representing only 25% of the total number of advisors licensed, this unit represents nearly 50% of the company's total revenues.
"Wealthcare" requires advisors to change their value proposition offered to clients, the presentation of their services, how they design recommendations, how they implement portfolios as well as how they monitor and service their clients on an ongoing basis. Other than these changes to the discipline of financial advising, the company jokingly states that everything else is the same as traditional advisory processes.
The explosive growth the company has experienced resulted in strong financial performance as well. The venture-backed start-up was cash flow positive ahead of forecasts in the fourth quarter of 2002 with annual revenues up 151% over the prior year. A deal struck with Thomson Financial in 2001 enabled the company to restructure its institutional sales efforts, reducing expenses by 37% from the prior year and significantly improving the company's operating performance.
Average revenue from new advisors was up 170% over the prior year. Additionally, the company said it already had more business closed for 2003 than was necessary to meet its forecasted revenue growth for 2003 thanks to deals with Wachovia Securities, several regional firms through the Thomson Financial partnership and with London Pacific Advisors for a web-based advisor platform they are creating for 2,000 advisors with an undisclosed firm. Total financial advisors licensed across all business lines were up 200% to 5,700 in 2002 and as of today agreements have already been executed to add an additional 3,000 financial advisors in 2003.
The company plans on broadening its appeal to advisors and their clients in the coming years by offering a complete turn key asset management product for independent financial advisors, small banks, CPAs and other institutions that wish to implement the benefits of "Wealthcare" for their high net worth clients. The new asset management product is expected to launch in the second quarter of 2003 and offers a "wrap" pricing structure, high tax efficiency, ongoing forward-looking "Wealthcare" goal and comfort monitoring at a cost to financial advisors of less than one-half of traditional third-party mutual fund or money manager wrap programs. Further details will be announced prior to the product launch, but the company has already signed an agreement with Parametric Portfolio Associates of Seattle, Washington to assist in tax efficient management.
ABOUT FINANCEWARE
Based in Richmond, Virginia, Financeware is powering the future of financial advice through a unique suite of online analysis and client collaboration tools for financial advisors. These tools, coupled with a goal-based advising approach called Wealthcare, allow advisors to give their clients' confidence in meeting their goals, without unnecessary sacrifice to their lifestyle, while avoiding undue investment risk. Information about the company is available online at www.financeware.com. Founded in 1999, the company is privately held.
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Copyright 1999-2010 Financeware, Inc., U.S. Patents 6,947,904, 7,562,040, 7,650,303, and 7,765,138.
International and U.S. patents held as listed here
Other U.S. and international patents pending. All Rights Reserved.
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