Letter from the Editor: Growing Pains | Wealth management
At a recent asset management conference, a panel dedicated to building a modern advisory practice focused on three millennial financial advisors, each managing their own RIA.
All were prolific Twitter posters and spoke fondly of the community they interacted with on the platform (presumably, a social media presence is an important component of a modern practice). They talked about the joy of being a confidant to their clients, helping them see that life is more than just money, and the importance of maintaining positive, healthy vibes with great gratitude to one another. for others and their efforts to help other advisors. find the same path.
The level of assets they managed, their growth plans or their trajectories were never addressed. There was a sense that these concerns – the real business of the company – were an old-fashioned mindset that doesn’t fit with today’s forward-thinking brand advisor.
One of the panelists said that the advantage of his practice, in fact, was not having the pressure to grow. He said many young advisers have found they prioritize the freedom and flexibility of running a small, manageable RIA over the mind-numbing career paths and treadmill institutionalization of traditional financial services.
These were once called “lifestyle practices”. The 10-year bull market of steadily rising stock markets has helped fuel the trend for these AUM advisors. For advisors in the past, a mutual fund’s trailing 12-month commissions offered great lifestyle freedom once a firm was up and running. Whether these types of priorities are best for the customer is another discussion.
Intentional growth is important – some say it’s essential – especially in wealth management. Competition from outside players is accelerating. Advisors who want to do their best for their clients realize that they need access to resources; this includes time, dedicated customer service teams and a network of on-call specialists in areas such as investments, tax, estate planning and retirement. An advisor cannot both “do everything” and “do well” for his clients. And consider this: Turning a practice into a growing, professionally managed wealth management business is essential if an advisor ever decides to monetize their life’s work.
This issue comes just before our premiere Wealth Management Conference, where the theme of RIA growth takes center stage. The conference will bring together hundreds of consulting firms that grow by mission and design – or have a desire to learn from each other.
It’s especially exciting because it’s really three events in one; bringing together growth-focused consulting firms, what we call RIA edgewill be sandwiched between two legacy conferences that the current Informa team inherited: Inside ETFsfor asset managers and investment professionals serving advisors, and Wealth Stackwhich focuses on financial advisor technology and practice management.
Both of these groups can learn a lot from the large consulting firms they want to serve; and growth-minded advisors, with many open avenues ahead of them, can meet the asset managers and technology providers who can help them take the next step. There is a lot of information on our website. I hope to see you there.