Advisory Firms: Take Decisive Action Today - Decide What Kind of Advisor You Are

By James Carney on Wednesday, October 6th, 2010

During the 2010 Advent conference in Las Vegas I spoke with a number of advisors who all seemed to be grappling with the same core philosophical business question, am I a true wealth advisor or an asset manager? Why should we be concerned about this? I believe we are at a pivotal point in the financial advisory space. Clients’ needs are changing and firms who do not adapt in the face of change will face certain extinction.

One example that comes to mind when I think of the period of change we are in, are the wirehouses. RIA firms have been the driving force in innovation and efficiency in the industry. Unfortunately for the wirehouses, their image has been quite the opposite. They must adapt (including re-brand) in order to survive. The numbers bear this out; there has been steady growth for RIA firms and declines for the wirehouses. Still, RIA firms cannot be complacent. There is a sea change occurring in our market which means that being an “asset manager” will no longer suffice. The new world (driven by clients) will require that firms become true wealth advisors.

What does it mean to be a true wealth advisor? It’s an important question and one that this blog is designed to address with expert advice, opinions and feedback from other advisors. What I can tell you from my vantage point and work with advisors points to increased demand in providing exceptional service to clients. Gone are the days when advisors talked about estate planning without looking at a consolidated report of all their clients’ assets.

Ask yourself what kind of advisor you want to be. Firms have a choice, either change and march ahead, or give up and face extinction. You can avoid making a decision and tread water for a long time but ultimately your arms get tired and all you have left is hope that someone will come and throw you a life preserver.


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