Bridging the Gap Guest Roundup: Industry Challenges

The wealth management landscape is constantly changing. Sometimes for the better, sometimes for the worse. Sometimes we can anticipate changes before they happen, and other times they pop up out of the blue. 

I talk about change often with financial industry leaders and experts on my popular “Bridging the Gap” podcast. Their insights and experiences are worth sharing.

Take Danny Martin. He’s a partner and wealth manager at Financial Advisors LLC and a recent recipient of Investment News’ 40 Under 40 award. I asked Danny to share his experience with a changing landscape when he left a traditional bank and began working at a new firm with a different approach.

“Through a five-year transition, we basically converted it to an advisory based fee-only firm, changed the name a little bit … so we’ve had to convert the whole mindset of our clients, our town, our founder, our administrative staff, our team, our families; it’s just been a whole different way we are taking the company. 

“I wouldn’t have been as nervous about leaving my little safe bank world had I known how great my clients perceived me as an advisor. It was almost like they were waiting on me for something more. I looked at it as, ‘If I leave this bank and they don’t follow me, I don’t know what I’m going to do.’ And it was completely the opposite of that. So, that was something I learned. When we decided to take that leap, it wasn’t as scary as I thought it would be. If you have a gut feeling on anything, it’s probably right; your instinct is probably right, and you should just go for it.”

Then there’s Paul Fenner with Tamma Capital. He recently discussed how it’s important to help clients see the value of advisors, especially amid a changing financial landscape, and how coming to us can be downright frightening for them.

“Three or four years ago, I became real intent on re-educating my current clients and moving forward with newer clients on, ‘This is what I’m about.’ The value I provide is all in the planning … I wish there were a better name to describe what we do. When you say ‘behavioral coaching,’ you get a lot of weird looks. When I first sit down with families, those people are often scared. I am very aware of that and am very empathetic. When I meet with them for the first time, I tell them I’m going to bust many stereotypes. I say, “I don’t know what your vision of a wealth advisor is or what he does, but I can tell you I’m very different from what you probably think. This isn’t a financial transaction. This is about me being an integral part of your family and you being a part of my family.’ I try to get the point across that I can help you most if you let me in.”

Finally, consider Josh Nelson’s perspective. He specializes in handling investment for folks who work in the tech sector and has seen a lot of changes in the financial services landscape.

“One of the most common challenges facing us is having the time to stop, think, and strategize. To take the time not just to do what we do but to ask the right questions and make us think differently. The other side is the challenge of the next generation of advisors coming in. This is an aging industry. The last statistic I saw said the average advisor is 58; although 58 isn’t old, an average of 58 is quite old. We keep hearing there’s a shortage of young people coming into the industry. So, it’s encouraging and finding those people who want to be right people who want to be the next generation of financial planners.

I think more will need to be delivered for the fee. Clients will need to see more value from it, or the people who are only doing investments will have to come down in price. It’s going to get lower and lower unless they can add more value. Whoever adds the most value will get the most business, putting us in a wonderful place.         

So, remember these takeaways: Change is a constant in our industry; don’t be afraid of change, and always be ready to seize new opportunities that arise from it.