A road map for navigating the changing financial planning landscape

Cetera's CEO's deep dive into one of the defining challenges – and opportunities – for the advice industry over the next 10 years

Nov 19, 2014 @ 9:16 am

By Larry Roth

Change is a constant in our industry, and financial advisers must learn and adapt continuously to keep up with changes in the economy, technology, the regulatory environment and a range of other areas.

What is not constant, however, is the pace of change — and as advisers are realizing, that pace is accelerating more rapidly than ever. This is especially true in the complicated but crucial world of long-term financial planning for clients, where secular trends such as longer lifespans for retirees, greater complexity in the tax code and the rising prevalence of nontraditional wealth transfer arrangements are converging to create challenges that require increasingly specialized skills on the part of advisers.

The best practices and industry knowledge that, by themselves, enabled advisers to build their businesses in the past may no longer help them succeed next year — or even next month. In order to provide clients with the integrated, holistic solutions they need, advisers must be fluent — and current — on the complex and ever-evolving estate planning, tax and legal considerations that affect clients and their financial goals.

This dynamic presents independent advisers with a difficult dilemma that could have profound and lasting effects on their businesses: Do they spend their limited time trying to interpret new regulations and court findings and risk taking their eye off the ball with respect to day-to-day client service operations? Do they rely on their existing knowledge of tax, legal and other issues and risk losing clients when they encounter complex issues that are outside their expertise? Or do they seek out guidance from unaffiliated attorneys and tax experts that may have no understanding of their business and merely create additional cost burdens for the client?

Obviously, none of these alternatives is optimal.

This is where independent broker-dealers must look ahead now to the next stage of our industry's evolution. Resolving this dilemma for advisers must be at the heart of our efforts, in tandem with our industry's long-term shift toward embracing and empowering a more holistic approach to objective financial advice for investors.


In helping clients with their complex long-term financial planning needs, today's advisers routinely encounter questions and scenarios around which the relevant regulations, legislation and case law are unclear or still evolving. The answers to these questions often are not available in textbooks and if they were, they might have to be revised every year or every quarter.

Recent examples of tough client issues advisers have encountered run the gamut and include:

• How to help clients who own substantial real property determine the most appropriate tax-advantaged technique for transferring those assets, using tools such as 1031 exchange products, charitable remainder trusts and family limited partnerships.

• How to integrate analyses of employer stock options into the financial planning process.

• How to develop comprehensive estate-planning strategies encompassing insurance benefits, retirement assets and other potentially illiquid assets when a significant beneficiary is not a U.S. citizen.

• How to help partners in a long-term same-sex relationship deal with state-level restrictions in order to obtain federal benefit rights.

Even for advisers with advanced financial planning certifications, scenarios like these can be difficult to prepare for. Simply identifying the relevant statute, regulation or court case can be a challenge, since the most pertinent rule or legislation could originate anywhere from an individual statehouse to the Internal Revenue Code or the Supreme Court.

When such questions come up, however, advisers can find that even long-established client relationships may be at risk unless they can identify the right solution in time. Worse yet, if they provide the wrong guidance, clients may find themselves penalized — and looking for a new adviser.


Independent advisers, as business owners who have limited time and resources, generally do not have the bandwidth to resolve this challenge on their own. Their broker-dealers, however, do.

By providing advisers with real-time access to dedicated experts at the home-office level who have experience in complex financial planning issues and a shared commitment to supporting the adviser's business above all else, independent broker-dealers have a tremendous opportunity to go beyond the traditional functions of back-office support, compliance and practice management assistance to offer a new level of vital and actionable intelligence that will help advisers map out and execute long-term financial plans for their clients.

Just as importantly, broker-dealers can help advisers realize when they need to adjust clients' plans to capitalize on new opportunities and avoid unforeseen pitfalls based on emerging developments in the tax, legal and regulatory arenas.

As one example, a recent Supreme Court ruling will have profound effects on how parents and other investors use IRAs as wealth transfer vehicles, and could lead to further limitations on “stretch” treatments of IRA distributions. Without dedicated resources to follow, analyze and communicate the implications of such developments, advisers may not realize the need to make selective adjustments in their clients' plans, or how to adapt those plans most effectively.

Expanding advisers' ability to provide holistic guidance on clients' complex financial planning needs will represent one of the defining challenges &mdash and opportunities — for our industry over the next 10 years.

By building the home-office-level resources to help advisers respond to the rapid pace of change in the areas of estate planning, tax and other issues that affect clients' long-term financial plans, independent broker-dealers can position themselves for success by helping our industry evolve beyond objective and conflict-free advice toward a comprehensive service model that addresses all aspects of clients' financial planning needs in a truly holistic and integrated way.

Larry Roth is chief executive of Cetera Financial Group, a network of independent broker-dealer firms.


What are you doing to adapt to the changing industry landscape?

View comments

Recommended next

Upcoming event

Nov 20


Future of Financial Advice

An innovative conference dedicated to improving the client experience by enhancing digital technology, mainstreaming healthcare and optimizing wealth management strategies.The Future of Financial Advice will provide a forum for... Learn more


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.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print