Profound changes in the advice industry are under way

Jun 4, 2014 @ 12:00 am

Runtime: 2:56

Pershing Advisor Solutions' CEO & managing director Mark Tibergien discusses the main factors causing the financial advice industry to change dramatically.

Video Transcript

[MUSIC] The financial services industry is going through probably the most profound change that it has gone through in decades. And, there are a lot of factors that are driving that. We see margin compression. We see the talent shortage. We see more demanding clients. We see a. A different economic environment. We see a level of stress that consumers have towards towards the industry. If we look at all of those assumption, we have to consider that the industry will be far different than it is today. For example, this business was built on the baby boomer. For the boomer, by the boomer. And that's about to change. Because we can see boomers retiring, dying, being disabled and leaving the business generally. So, we have to consider what the implications are with the Gen X and the millennials coming into the business. So the use of technology will be different, both in terms of how they interact with clients and the tools that they use. The nature of the business models will be different. It would be less of a solo practitioner world. It'll be more of a team, firm based, approach. And, in fact, I think, that when we look at the registered investment advisory space, today. The there are many RIAs that are as big and significant as many broker dealers. And so we're seeing that shift occur as well. Today, there's, there's almost as much wealth for people under the age of 45 as there is over the age of 45. The question though, is how do we reposition the way in which we communicate relate, and identify the needs of accumulators who are younger. Versus those who are deaccumulators and older. So, our messaging really has to be on point with the type of clients we're wanting to serve and the way in which they want to do business. A boomer, for example, tends to build a relationship then decides whether to do business with you. A gen X'er and a millennial says. Prove that you are worthy, that you are competent that you can do something for me, and then I'll decide whether or not I want a relationship, but that's not quite as important. If I were running an RIA today I would think about this business quite differently. I would consider, for example, how I become the employer of choice because the real driver of growth is going to be the talent. And the question is how do I find and develop the right kinds of talent. Second I probably would focus less on recruiting and more on the notion of people developing where I begin harvesting my own people who could be inculcated into my culture. Third, I would be thinking of my general branding and proposition in the market place. Of how do I differentiate from everybody else? How do I use language that is different? How do I touch prospects and clients at an emotional level? That becomes critical. So in the end the real successful firms are those that get to some critical mass and these are elements that will drive that. [MUSIC]

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