Charles Goldman tells indie advisers: ‘Wind is at your backs’

Independent advisers don’t have to be big to be successful, according to Charles Goldman, former head of Schwab Advisor Services and past president of Fidelity Investments.
The investor market has a lot of mass-affluent clients, said Mr. Goldman, now a senior adviser to Bain & Co., yesterday afternoon at an adviser event in San Diego hosted by Shareholders Service Group Inc.
While some financial firms claim to have million-dollar or higher minimums, “that just ain’t so,” he said. “The average RIA account at Schwab [Advisor Services] is around $350,000.”
Advisers with $10 million to $100 million in assets control only about 10% of the $1.9 trillion registered investment adviser market, Mr. Goldman said, “but that’s still a lot of money.”
He said the financial services industry is unique in having providers such as custodians, technology companies and product sponsors, who bring “massive scale” to boutique advisory firms, allowing smaller shops to compete with the big Wall Street houses.
“The wind is at your backs” in terms of picking up market share, Mr. Goldman said. “There’s still a lot of meat on the bone [of wirehouses] to go after,” he said. “There’s still a lot of share to go get.”
RIA firms do face challenges in maintaining asset growth, given that many firms rely on one rainmaker, he said. Advisers also have to handle more technological and regulatory complexity, and few have figured out a succession plan, he said.
He warned the 300 RIAs at the event about losing the battle over a fiduciary standard. “Your voices are almost unheard” in Washington, D.C., he said.
A new fiduciary standard isn’t necessarily bad, “but to take fiduciary case law of 100 years [in the making] and wash it away, that would be criminal and unfortunate,” Mr. Goldman said.