Wirehouse executives push advisers to change the conversation

Firms focus on pushing brokers toward holistic advice and a different product set, but adoption has been slow

Apr 10, 2014 @ 4:07 pm

By Mason Braswell

The majority of financial advisers still aren't doing financial planning, despite efforts by wirehouses and other brokerage firms to have brokers focus on clients' holistic financial well-being, UBS' client strategy officer Paula Polito said.

Only about a third of advisers at UBS Wealth Management Americas have set up a financial plan for clients, despite the fact that 64% of advisers surveyed said that they thought they were providing doing holistic planning, she said in a speech at the Securities Industry and Financial Market's Associations' private-client conference in New York on Thursday.

“Some advisers believe that they are delivering holistic wealth management when in fact they're not,” Ms. Polito said. “Collectively, advisers across all firms need to do much better.”

In recent years, brokerage firm executives have been encouraging advisers to change the conversation by having more discussions with clients about banking and lending offerings, trusts, estate planning and philanthropy.

It was a theme that was the underpinning of speeches at the SIFMA conference.

“The holistic approach is going to be the hallmark of the financial adviser of the future,” said Greg Fleming, president of Morgan Stanley Wealth Management.

Having conversations about setting up trusts for the next generation, credit cards and financial security are necessary to stay relevant, said Bob Mulholland, the head of investment solutions at UBS Wealth Management.

But the cultural shift has been slow in coming, despite a movement in recent years and recent technology investments such as Bank of America's MerrillOne platform, which was rolled out last year.

Some advisers who already had built successful practices around picking stocks and boosting returns see no reason to change, Ms. Polito said.

“They have built successful practices and are very content with the way things are,” she said. “But often we find that they could be offering a higher level of service.”

Many advisers may think that they are doing holistic planning because they have conversations with clients about retirement or other important life topics, but Ms. Polito said that they still haven't actually written up a goals-based financial plan for clients.

Just 25% of clients are getting advice on insurance and asset protection products, adding that long-term-care insurance is the top concern among clients surveyed by the firm, she said.

“There is so, so, so much opportunity,” Ms. Polito said.

Mr. Fleming said that moving toward financial planning will involve advisers taking a closer look at the liabilities side of a client's balance sheet.

He estimated that Morgan Stanley would have cash deposits of as much as $135 billion by the middle of next year, which would help advisers provide more lending to clients through mortgage loans and securities-backed lending.

“The best thing we can do with those deposits is turn around and lend them back to the clients,” Mr. Fleming said.

0
Comments

What do you think?

View comments

Recommended for you

Featured video

Events

The power of data

Your clients have financial news and data at their fingertips, but donít know how to interpret it. Katy Gibson of Envestnet|Yodlee and Blake Kannady of Envestnet discuss the power of leveraging aggregated data.

Recommended Video

Path to growth

Latest news & opinion

Lightyear Capital takes 50% stake in $9 billion HPM Partners

Private equity backing could fuel acquisitions by the large RIA.

Tax reform: 7 essential strategies for financial advisers

While advisers face the difficult task of analyzing the law's impact, they will also have a significant opportunity to prove their value by implementing money-saving strategies for clients as well as their own businesses.

Tax law: Everything advisers need to know about the pass-through provision

The provision is tricky, but could provide advisers and business-owner clients with sizable tax savings.

Bill requiring fiduciary disclosure reintroduced in New Jersey

Measures would obligate financial advisers to tell clients they do not have to act in their best interests.

Merrill Lynch to let advisers text with clients

Texting has been a popular mode of communication for years, but in the past the firm's regulations have prevented advisers from using it.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print