Robert DeChelis, former chairman and chief strategist of Allianz Exchange, and Frank Porcelli, former head of US wealth advisory for BlackRock, have launched a wealth management firm and technology platform that promises to help advisors take a broader, more “holistic” approach. Is. of the client’s financial position, including a focus on managing accumulated assets as well as risks and liabilities.
The duo created Bonsai with four other founding partners, including Dave Schrohe, former chairman of Lenox Wealth Advisors; Jeff Miller, former head of advice and platforms at UBS; Peter Ciczko, former US Century exec; and Eric Hordman, a former partner with Stride Capital, a seeding firm based in Stamford, Conn.
Bonsai’s model focuses on blending products such as annuities and insurance to deliver results for customers and to reduce risks and power over a customer’s entire balance sheet, including assets and liabilities, DeChelis said.
“Everyone is focused on depositing funds and a withdrawal-driven model,” he said. “Ours is based on a greater asset/liability model that takes the entirety of one’s financial structure to do this.”
“It’s actually far broader than anything we’ve seen in our industry because clearly the industry isn’t compensated for doing things like helping people manage liabilities or doing those things.” Forecasting or addressing what are outside, let’s say, investable assets that they’re able to manage by an advisor today.”
Bonsai includes three offerings: Bonsai Exchange, Bonsai Advisors and Bonsai Consulting.
Bonsai Exchange is a portal targeted at registered investment advisors that will give them access to insurance products and annuities that address risks in the client balance sheet. They have partnered with major insurers such as Allianz, Global Atlantic, Transamerica and AIG to bring those products in, and have plans to add more partnerships in the future.
“The whole idea of the exchange is to try to take as much friction out of the process as possible, because in many ways advisors have found insurance-based products to be too difficult, be it the complexity, the pricing—commission versus fee-based; historically. They’ve been very manual since. What we’ve tried to do with the exchange is make it a complete digital experience,” DeChelis said.
The exchange will also include a business valuation tool, intended to help advisors of small business clients get a comprehensive view into those clients’ balance sheets.
“By providing a business evaluation tool for consultants, they can actually engage in one part of the conversation with a client; your typical financial planner doesn’t get involved in the nuts and bolts of a small business owner’s business,” DeChelis said.
Bonsai Advisors is the firm’s wealth management platform, which can be accessed in one of two ways. An advisor can join under Bonsai’s ADV and use its front-end platform, wealth management technology stack and exchange. The firm will also market to consultants, particularly insurance agents, who wish to delegate wealth management tasks.
DeChelis said the goal is to launch Bonsai Advisor through a handful of advisory firm acquisitions, targeting firms with $1 billion or less in assets under management. The firm will then potentially move to a recruitment and organic growth model.
The third offering is Bonsai Consulting, in which the firm will provide consulting services to help organizations develop corporate strategy, as well as practice management coaching for consultants.
DeChelis said Bonsai hopes to bring downmarket a strategy that many people think is only afforded to family offices or ultra-high-net-worth individuals; He argues that taking into account the entirety of a client’s balance sheet is a more comprehensive approach to providing financial advice. And this is where the advisor may not necessarily be paid.
“Every activity and everything you do is not going to translate into some percentage on AUM for which you will be compensated,” he said. “But if you actually take this approach – and I tell advisors this all the time – if you want to execute an asset/liability model, it is mathematically impossible to do so unless you have someone to do it. balance sheet is not complete.
“We want to be able to help consultants establish relationships with their clients where there is a level of trust and a level of efficacy where clients have the tremendous benefits of aggregating their assets in one place with a single philosophy. A sense of and an attitude.”
