Financial advisers should accept the fact that technology is both a friend and a potential competitor, Ron Carson told the audience at TD Ameritrade's annual conference Wednesday in San Diego.
"Look around the room. Are you viewing each other as competition?" Mr. Carson asked the audience of financial advisers. "The reality is, you will be competing against an Amazon and Netflix experience."
It's probably not surprising that the founder of the Carson Group would lean so heavily on the importance of keeping up with technology.
In January 2017, when
he moved his $4.2 billion operation from LPL Financial to Cetera, Mr. Carson cited technology challenges as
among the reasons for changing his broker-dealer relationship.
Mr. Carson warned against assuming that clients are not interested in technology.
"Are your clients using Amazon?" he asked. "Well, that's technology. Consumer expectations are going up fast, and if it's super simple, they will use it."
He summed up three basic requirements for being a successful financial adviser:
"The first hurdle is easy, don't steal their money," he said. "And second, are you acting as a fiduciary and putting your clients' interests first?"
The third dimension, as he described it, is embracing a seamless technology experience and service model.
Regarding the ongoing topic of fee compression in the financial planning space, Mr. Carson said fees have barely budged over the past few years, but that "there is fee compression coming up from the bottom as the costs of services have tripled."
He advised against trying to compete by cutting advisory fees.
"You happen to be at the right time, in the right place to do things nobody in our profession has ever done," he said. "Reducing fees is a loser's game. If your answer to value is to lower cost, you can't lower cost enough. Vanguard has already won that game."
However, Mr. Carson acknowledged the margin pressure that advisers experience as they feel pressure to continue offering more services.
"Stealth fee compression is a real deal," he said. "But for many years, we probably made too much money as a profession anyway, so that's okay."
(More: 6 ways advisers can make 2019 their 'prove it' year)
