The Future of Wealth Management | Summary and Q&A

TL;DR

The wealth management industry is experiencing a significant shift as assets flow into independent firms, driven by breakaway advisors and clients seeking customized solutions. This movement is expected to continue and accelerate, with an estimated $3 trillion in assets set to change hands in the next few years.

Key Insights

• 👾 The independent space is experiencing significant growth, with assets flowing into registered investment advisor (RIA) firms.
• 💗 Succession planning is a growing concern, with funding for acquisitions and transitions coming from well-funded firms and private equity.
• ❓ Technology, including AI and blockchain, is expected to have a transformative impact on the industry, but widespread adoption is still in the early stages.

Transcript

right next to me we have Cheryl penny and Cheryl is the founder and CEO of dynasty Financial Partners which is an integrated platform for high-end re our IAS before founding dynasty in 2010 Cheryl worked at Smith Barney where he spent much of his time in the field with financial advisors as well as running several of their wealth management busines... Read More

Questions & Answers

Q: What is driving the flow of assets into the independent space?

The migration to independent firms is driven by both breakaway advisors seeking higher payout and autonomy, as well as clients looking for advice separate from product manufacturers.

Q: How are custodians like Schwab responding to the growth of independent firms?

Schwab, as the largest RIA custodian, has experienced significant asset growth in its custody business. They are now looking to provide product, services, and capital markets offerings to the growing independent space.

Q: What role will technology play in the future of wealth management?

Technology, including AI and blockchain, is likely to have a transformative impact on the industry. Firms that effectively implement and utilize technology will have a competitive advantage, providing operational efficiency and better client experiences.

Q: Will we see the emergence of mega platforms like Google or Amazon in wealth management?

While there are FinTech players that currently dominate certain segments, the industry is still in the early stages of technology adoption. It is possible that larger players, including tech giants, could enter the wealth management space and disrupt the industry through acquisitions and vertical integration.

Summary & Key Takeaways

• Assets are flowing into the independent space, particularly into registered investment advisor (RIA) firms, as clients seek advice separate from product manufacturers. This trend is driven by both breakaway advisors and clients.

• The independent space is experiencing strong growth, with custodians like Schwab seeing a significant increase in assets under custody. The migration to the independent space is expected to continue and accelerate, with $100 billion of net new assets flowing to independent custody units over the last few years.

• Succession planning is becoming a major concern in the industry, with a need for advisors to plan for retirement and transition their practices. Funding for succession is expected to come from well-funded firms and private equity.