Page 44 - Investment Advisor - Jan/Feb 2021

ents — those investors who generally
have between $500,000 to $2.5 million
in investable assets at retirement.
Unfortunately, most wealth man-
agement firms have developed with a
mindset to serve those with a high net
worth. That service model doesn’t scale
for the mass affluent. Thus, firms have
to create a new way of doing business
and a CX for a different segment of
clients to remain profitable and keep
clients happy.
This movement will necessitate
a “standby” brand with a CX that is
mostly digital and technology supported
and that doesn’t require as much hand-
holding or person-to-person interac-
tions as the traditional service model for
We’re beginning to see a significant wealthy clients.
This trend will challenge many advi-
movement of talented advisors out of sors in the future. However, there will
be a rapid evolution and development
the large RIAs, so they can start their of service models to address the mass
affluent marketplace.
own firms and/or find smaller firms Advisors who started down this path
to work with where they can afford three or four years ago already are ahead
in the race to capture more market
partnership purchases. share. Now is the time for the rest of the
industry to catch up.

in building human capital programs and The majority of RIA firms, which THE TREND RATE OF CHANGE
partnership structures that please every aren’t billion-dollar outfits, need to Some of these trends started before the
advisor in the firm. watch for the client of the future and COVID-19 pandemic took hold. But the
As a result, we’re beginning to see a understand what types of clients they’re digital revolution — people working
significant movement of talented advi- trying to attract. anywhere and clients finding advisors
sors out of the large RIAs, so they can The best way to attract more wealthy everywhere — caused by the crisis has
start their own firms and/or find small- clients is to better serve existing clients. sped up their development.
er firms to work with where they can This is especially true as wealthy clients We don’t know how fast this revo-
afford partnership purchases. get harder to obtain. Firms serving this lution will spread within the wealth
This talent includes client services clientele can attract wealthier clients management industry, but the rate of
professionals seeking more growth through referral programs for their cur- change does seem to be moving faster
opportunities, as well as advisors who rent client base. than before.
want to build and grow a firm. Knowing this, advisory firms are Will that rate of change continue
beginning to develop programs that at its breakneck pace? If advisors and
3. THE DEVELOPMENT OF serve clients of all wealth levels. In other firms are prepared to embrace the
STANDBY BRANDS words, they’re asking: If wealthy clients change they want to see in the industry,
The pool of wealthy clients is decreasing are getting harder to obtain, what’s the it will. How much that attitude will
quite significantly amidst firm consoli- next segment of clients who can con- permeate the entire industry remains
dation. As a small number of firms get tinue to help firms grow? to be seen.
larger in size, wealthy clients increas- As a result, we’re seeing many
ingly are choosing from a limited num- “wealth management only” firms begin Angie Herbers is an independent consultant to lendy16/Shutterstock
ber of independent advisory firms that to reinvest and reposition themselves the advisory industry. She can be reached at
can serve all their needs. to pursue and serve mass affluent cli- [email protected].

42 INVESTMENT ADVISOR JANUARY/FEBRUARY 2021 | ThinkAdvisor.com