The wealth management industry at a turning point

“For too long, wealth management firms have focused too heavily on the performance of the S&P 500 and other benchmarks — the how and what of our business — and too little on why we’re in this business. While performance is always important, at its simplest, our role is to help clients and their families reach their life priorities for each stage of their life. As an industry, we need to talk and interact with clients on their terms, in their words, and focus relentlessly on what they want for their lives.”

John Thiel
Head
Merrill Lynch Wealth Management

“As our industry emerges from a financial crisis and a number of mergers, we are at a crucial point for transforming the client experience. A key factor in that transformation is innovation. Customer expectations are evolving; they want it to be easy to do business with us when and where they want. We plan to use technology to extend the advice of our financial advisers. New and improved technology will help us better serve clients who are near retirement or in retirement, as well as help us reach the next generation of wealth in our country – the emerging affluent investors. The impact of Millennials in 30 years will be as significant as the Baby Boomers’ impact is today.”

Mary T. Mack
President and Head
Wells Fargo Advisors

“An industry of baby boomers advising baby boomers is predictably facing a turning point. The fact is, less than 6% of advisers are under the age of 30. With thousands of independent investment advisers getting ready to retire, we need to make succession planning and cultivating new advisers our top priorities so RIAs can serve future generations of investors.”

Tom Nally
President
TD Ameritrade Institutional

“The industry is at a tremendous crossroads — there are more opportunities to succeed and dramatic distractions to fail. The market has become a meritocracy — if you’re not adding value, you’re not going to get paid. This is not only driven by the Internet and social media but also by the next generation and their influence on the traditional generation.”

Ron Carson
Founder and CEO
Carson Institutional Alliance

“Exponential technology. Radical and fast-coming innovation will sharply alter the advice we give and how we give it. Most advisers are not prepared for what’s coming.”

Ric Edelman
Chairman and CEO
Edelman Financial Services

“In this burgeoning era of digital advice, firm leaders will have to look at their balance of ‘technology versus touch.’ What components of your client value proposition can be digitized or automated, and what parts can only be delivered through human interactions? It is the latter that will keep advisers relevant and continue what we see as a bull market for financial advice.”

Michael R. Durbin
President
Fidelity Institutional Wealth Services

“We now stand at a crossroad, with one generation of investors looking to maximize retirement security in the face of much longer life spans and an emerging generation of investors entering a world in which they are cognizant that they, increasingly, are ultimately on the line for their financial futures. The industry is rising to help them meet these challenges, and a plethora of advice options are appearing. The critical question now: Which advice options truly put the investor’s best interests at the center?”

Bernie Clark
Executive VP and Head
Schwab Advisor Services

“Investors need to know that they are protected by the same standard of conduct when receiving the same type of personalized investment advice, whether from a broker-dealer or investment adviser. The SEC should establish a uniform fiduciary standard for both types of advisers when they provide this type of advice. Importantly, the SEC should accomplish this by writing a rule that not only protects the investor but also protects the investor’s choice of service, by being business-model-neutral as Congress intended.”

Ken Bentsen
President and CEO
Securities Industry and Financial Markets Association

“Many processes and protections in our industry depend on clients’ signing hard-copy forms — new agreements, acknowledgements, etc. Technology has enabled more convenient, more efficient and less expensive data collection and processing options preferred by a growing number of advisers and clients. For the vast majority of firms it requires a complete overhaul of long-standing processes. The required renovation expense and time investment may cause some firms to exit the business rather than incur the costs.”

Scott Curtis
President
Raymond James Financial Services Inc.

“Now at $3 trillion, the rapid growth experienced by the managed-accounts industry over the past decade will continue, as clients like what it offers: a rigorous discovery process to determine goals and risk tolerance, investment discipline that includes allocation across a wide spectrum of asset classes and ongoing due diligence, and the option of discretionary management. In this context, many investors will conclude that their interests are best served by maintaining both advisory and brokerage accounts.”

James Tracy
Head of Consulting Group
Morgan Stanley Wealth Management

“The financial advice industry is going through its most profound change in decades. This is driven by demographics, regulatory pressures, consumer sentiment and a desire for young people to do things differently. The change will feel evolutionary, but once we are through the next five to seven years, we will likely see more large RIA firms, fewer smaller broker-dealers and an age demographic focus shift from boomers to Gen X and Millennial advisers and clients.”

Mark Tibergien
CEO
Pershing Advisor Solutions