From the June 2008 issue of Research Magazine • Subscribe!

June 1, 2008

What Will Client Relationships Be Like in 2038?

When this magazine got its start -- a mere 30 years ago -- our world was a very different place. Mood rings, lava lamps and pet rocks were all the rage. So was an immature, albeit breezy little activity called streaking. In addition, the DJIA was in a funk at around 700. Oil was about 13 bucks a barrel, and a gallon of gas was less than anything on McDonald's dollar menu.

Today, suffice it to say, things just aren't the same. Think about it from your clients' point of view. Back in the good old days, your clients only had to worry about stocks and bonds. Now, they have to worry about stocks, bonds, collateralized mortgage obligations, puts, calls, collars, exchange-traded funds, subprime mortgages, indexed annuities, living benefit riders and a partridge in a pear tree.

Just for kicks, join me for a ride in the WABAC machine with Mr. Peabody and Sherman -- but this time we're going way ahead 30 years into the future. What exactly will your clients have to deal with in the year 2038? If you believe Al Gore, one thing will be wet feet because the melting polar ice caps will have water everywhere!

In addition to soggy socks, you can count on technology to make this an even smaller world than it is today. Never again will you be able to make the excuse that you were out of cell phone range. When you sign up a new client, he or she will be implanted with a computer chip that will allow him or her to telepathically ask you questions, 24/7, from anywhere in the world. Even in tunnels.

While this may sound great to the guy on the subway, scream-talking into his iPhone, for most of us, this will be a huge pain in the behind. Imagine the knee-jerk reactions for liquidations every time the DJIA dips a mere 10,000 points. Or how your head will be cluttered with thousands of voices every time the price of oil teeters above $25,000 a barrel. Yes, managing your clients' instant expectations is going to require a great deal of skill, not to mention thick skin. It may very likely require a serious drinking habit as well.

Will clients complain in the future? Of course they will! They may say something like, "Why don't you ever think back at me when I think you a question?" or "You should have known biodiesel was going to cause cancer!" or "What in the hell am I paying you for? I might as well do it myself at TDSchwab and Lynch!"

Speaking of complaints, 30 years from now you can count on each one of your clients having his or her very own personal compliance officer. Somewhere around the year 2020, based on current projections, compliance auditors will actually outnumber financial advisors. That's right -- in the future, no longer will mamas and papas encourage their babies to grow up to be cowboys; they'll want them to be compliance officers. The world will be a safer place, trust me.

If compressed fees, instant complaints, and a compliance officer around every corner sound like a horrible new world in which to be a financial advisor, you may be right. Try not to worry, though. The good news is, with the average age of a financial advisor at around 50, you'll either be dead or too senile to care. Save the worrying for the younger crowd.

Most of us will spend the year 2038 in a rocking chair, fondly remembering the good old days. We'll daydream of those wondrous times when we undressed in the dim glow of a lava lamp, slipped on our mood ring, and gave our pet rock a wink and a nod -- right before we kicked open the front door and ran naked through the neighborhood.

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Once a mildly amusing comedian, Bill Miller now works as a recruiter for a top independent broker-dealer; reach him at writingbill@mac.com.

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