The breakneck pace of industry consolidation presents a web of new challenges for early-career advisers, according to a discussion of past and present InvestmentNews 40 Under 40 winners.
Merger and acquisition activity in the industry is on track for another record year. Billion-dollar RIAs, once unicorns, now number in the hundreds. Private equity interest in the industry’s recurring revenue streams appears poised to keep the consolidation rolling.
The industry’s next generation grappled with these trends during the Future of Our Business event, held in New York on Wednesday.
At the firm level, industry consolidation means tougher competition, particularly for smaller shops.
“The pace of change is really quick so you can’t be complacent,” said Leah Jones, director of financial planning at Hightower Bethesda. “Practices need to evolve to stay competitive with larger organizations. The only way you can do that is by leveraging technology.”
Indeed, the proliferation of advisory technology and outsourcing solutions allows advisers to broaden their service offerings, attendees said. Advisers just need to be cognizant of their value proposition and know when to refer clients to an outside specialist.
“You can compete with a big firm by showing that depth,” said Katie Brown, founder and principal of Morton Brown Family Wealth.
Small firms can compete in a consolidating industry, but they need to make early decisions about how to structure their businesses, especially in a profession that often figures equity into its compensation packages. As Brown put it, new firm owners need to make a “conscious decision between a lifestyle practice and building an enterprise.”
The next generation client also can be a challenge for the advice industry and advisers of all ages will need to adapt to sharing more of themselves.
Younger clients are more willing to provide information with advisers and connect with them on a personal level, according to attendees. Gaining their trust, though, means advisers will have to share more of themselves and be creative in spreading their message on social media, podcasts and other platforms.
In fact, getting to know more about clients’ personal goals may be the only way to keep them on track for the long term.
Ka’Neda Bullock, founder and CEO of Master Plan Investment Group, pointed out that deep knowledge of clients can help reorient them in down markets.
“It’s not just about market performance,” Bullock said. “It’s about what you’re trying to achieve and why you invested.”
That may be especially important for younger investors, who have little experience with prolonged downturns. Forty-year-old investors today, after all, were just entering their prime earning years in 2008. The brief pandemic crash notwithstanding, many of them have benefited from a bull run their entire investing lives.
But reminding clients of their goals and helping them along their personal journey requires a shift from basic know-your-customer compliance to proactive and ongoing conversations about goals, risks and tradeoffs.
InvestmentNews reported in 2017 that the IRS was scrutinizing the tax shelter land deals, called syndication conservation easements.
Advisors gain a second workflow for 401(k) guidance as the fintech expands beyond bulk rebalancing, backed by new policy research on advice access.
New data shows most people do not have enough saved to cover costs and are not fully utilizing their accounts.
Firms announce new recruits this week, with teams overseeing hundreds of millions in client assets switching affiliations.
It’s the 12th deal for Stratos since SEI's investment and follows 11 acquisitions worth $4.8B in 2025.
Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains
Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income
