Is the Advice Market Awakening??

November 2019

By  Steve Gresham

Like Rip Van Winkle shaking off a deep sleep, I see definite signs of life in the year end planning process of advice firms. The motivator to action is slowing organic growth. Advisory firms are recruiting or buying advisors, but true growth is a fraction of those numbers. Investment product companies have been lifted by a historic bull market and falling interest rates but for how much longer?


It’s all about Net New Assets 

  • Net new assets is the advice industry’s #1 objective – especially as markets slow and more Baby Boomers reach retirement age. The Boomers represent 80+% of industry profits through 2035. Where will the new growth come from?

    • New households are challenging – requires taking a new client from another firm or prospecting a new household that might be younger with limited assets

    • New households in wealth management are especially difficult to obtain – the most common source is referral. Referrals have to be earned - and requested. 

  • Asset consolidation (more assets from existing clients) is the #1 opportunity for net new assets

    • Most advisors have fewer than half their clients’ investable assets and the typical client HH has 5-6 product and custody relationships across the industry

    • Leading firms are on to the importance of consolidation – Morgan Stanley’s #1 objective seeking $2 trillion of not held assets, at Fidelity my team was after $1 trillion

  • The path to asset consolidation is to offer something clients something MORE. More savings, more personal, more thorough. Our research indicates a blend of “planning” and “relationship”. Translation: “Help me do what I haven’t done yet” which most often is more complete planning for “retirement”

    • Most of the advice industry clients are 55+ with a median of 65

    • Most industry “retirement planning” is superficial 

    • The most important retirement issue for clients is affording their longevity – healthcare tops, followed by the desire to live comfortably and independently – and they aren’t sure how to plan better or who can help them

    • Clients tend to consolidate assets as they age and will select firms that can help them plan better and more proactively – not just invest. There will be significant winners – and losers.

  • The key to longevity planning is making the complex simple with simple tools

    • Longevity planning can be complicated and emotional. Advisors and clients can be reluctant and not know how to begin.

    • Simple questionnaire tools can facilitate the conversation by providing the structure, education and action steps

    • Trust is built from the advisor and client engaging, learning and talking about what to do now

Of course we have ideas of how to capture net new assets using simple tools. And a terrific national campaign we have structured to capture assets more broadly.