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 need for easier investment options.

Rob Barnett of Wilmington Trust makes the case for simpler investment choices for plan participants and sponsors.

Latest news & opinion

Why we must create a more diverse and sustainable financial planning profession

CEO explains how, why a firm should commit to conscious inclusion.

Wells Fargo sees slowdown in advisers exiting this year

The 2016 banking scandal and public relations fiasco had alienated some of the firm's advisers.

States trying to save DOL fiduciary rule appeal rejection of effort to intervene

California, New York, Oregon ask for rehearing by full 5th Circuit Court of Appeals.

Employees at best places to work focus on the person — and the fun

Employees at best places to work firms focus on the person and fun.

Waddell & Reed sees flurry of senior staff departures

Firm also experiences an almost 30% decline in number of brokers and advisers.

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