How RIAs are becoming as complacent as wirehouses -- and what it'll take to snap out of it
There is empirical evidence that challenges are increasing but also reasons to believe they can be met
Thanks to John (a former colleague and still good friend) for stirring the pot. I agree with many of his points and the general thesis – complacency kills. Two key points I agree with…
1. The bbery trap… For those following the singularity movement (thanks Schwab for having Peter Diamandis speak at IMPACT!) you need to know where technology is going, not where it is and how it can help solve problems you are still solving with “old ways”. Advisor technology and the technology your clients have access to everywhere else is booming. Advisors who are still working of yellow pads of paper and want their clients to call them with every question are missing the big shift in technology and the benefits to provide a better experience for clients.
2. WealthFront, Bettermint, Personal Capital and others are trying to change the game. Advisors have a hard time seeing these models as replacements for them… Whether they will/won’t is not the point. They are charging less than 25% of what advisors charge. Are you providing 4x the value? Could you do what you do at half the price?
One point, I’d choose to put a finer point on is scale. It’s critical, but getting bigger doing the same thing is not scale. In fact, every industry benchmarking study – including those I oversaw and published at Schwab – indicate that most firms just add staff as they grow and their productivity (profitability, rev. per prof.) actually stay flat or even decline. The point is focus on productivity and a firm that isn’t dependent on just a couple of people. That’ll position you to compete regardless of size.
The hope of an article like this one of course is that it’ll stir up some deeper thinking and comments in line with that — and this comment certainly fits the bill.
It’s better to raise a potentially false alarm about the online advisors than to have a sense of confidence that turns out to be false. An industry that is its own worst critic seems to be the one that will prevail over the long haul.
Joe Duran's second RIA act is rocking with eight staff, four co-founders and a conspicuously anti-United Capital concept that will flip RIA stakes 'eventually' as a minority investor
The United Capital founder paradoxically promises to 'passively' buy minority stakes as a backdrop for going hyper-active with quick-strike capability to apply super-consulting and technology to create explosive growth as a prelude to a sale.
November 29, 2023 at 3:23 AM
Goldman Sachs-Creative Planning deal is bleeding defectors -- 16 more last week, report says -- auguring a 'potential disaster,' analysts warn
Dozens of former 'United Capital' advisors are fleeing at once, but Peter Mallouk is still battling to keep them, and Goldman Sachs may play legal hardball, sources say.
October 4, 2023 at 2:16 AM
Shirl Penney hands over 'front end of the house' to Andrew Marsh as Dynasty reboots -- post-$100-million raise, post-IPO withdrawal and post-Schwab partnering
The Dynasty CEO is handing over sales, custody relations, breakaways and M&A sales to the un-retired Canadian -- and wildly promoting from within.
September 21, 2023 at 1:53 AM
Joe Duran will co-develop Goldman Sachs unit aimed at outsourcing to non-Goldman RIAs after 'magic' never materialized for direct-to-consumer RIA
The Newport Beach, Calif. RIA legend plans to shift from B2C to B2B to fix Goldman's disconnect with RIAs and play to the strengths for him and the bank
February 8, 2023 at 3:03 AM
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