The Wealth Management of the Future Roundtable

Investment managementís importance could wane in favor of advice

Nov 20, 2013 @ 12:00 am

Runtime: 4:05

Raymond James president Scott Curtis on how technology and the evolution of the industry could cause investment management to become less of an adviser's focus.

Video Transcript

When we think about the future evolution of financial services and wealth management industry wherein a lot of this is gonna be driven by client preferences and technology that's available to financial advisers and to firms that provide financial advice to retail clients. As clients become more and more accustom to instant messaging and texting and e-mail, video chat, that's gonna change the way as evolution of those services continues. That will change the way clients expect to be communicated to unless regarding financial advice. So, imagine where clients and advisers don't need to physically get together except may be twice a year. A video conference update maybe perfectly fine for clients who are used to that. That way, they don't have to hop in a car and go fight with traffic or the financial adviser doesn't have to hop in a car and fight with traffic, and I think that will actually make a financial adviser's life much more efficient by not having to travel around to try to keep up with their clients. So, that's one evolution. Another is collaboration between the financial adviser and the client in terms of being able to look at a plan online and make adjustments to that plan, either spending expectation adjustments or investment performance expectation adjustments when they're both looking at the same plan through our website and-- So, I think communication and client expectations is really gonna be at the core of all of it. But when I think about the role of the adviser today, it truly is one of adviser. It's1 advised. And if we limit what a financial adviser does to purely investment management, then they're not providing advice and they're not being compensated for advice. So, I think investment management itself will perhaps become less important as time goes by and advice will become more important. And if you think about it, the people who have significant amounts of wealth to invest, protect, transfer, or donate to charitable organizations, those are the people who can benefit the most from advice and I think those are also the people who are going to be most willing to pay for advice, because given tax law and just their desires for future beneficiaries or charitable organization, that can get pretty complex and that's not necessarily something that people wanna try to tackle on their own. They benefit from the use of an adviser. Compensation, I do believe really evolve because if you think about the compensation models that we have today, we have a commission structure, which is tied to a transaction that's not advice based and we have fees that are tied to a certain amount of assets, but I know having worked with many advisers over many, many years those advisers provide advice to clients for many more things than just investment management. So, it's almost as if the fee that you're paying, some of this advice that you're getting is free or it comes with the fee that you pay. So, if we get to a point where clients want to be specific about the fee that you're paying, we may see a much wider use of retainer fees and specific fees for consultative services rather than fees that are strictly tied to a level of assets or commissions that are based on individual transactions. So, it will continue to evolve. I'm confident of that.


What do you think?

Video Channels

Recent Events

Junxure Advisor Conference 2015

Thursday, Oct 8, 2015

2015 Community Leadership Awards

Tuesday, Oct 6, 2015