May 2, 2013

John Taft: The 2013 IA 25 Extended Profile

Head of Wealth Management, RBC Wealth Management

Business model is less focused on sales, more on holistic wealth management, according to Taft Business model is less focused on sales, more on holistic wealth management, according to Taft

This is John Taft’s first appearance on the IA 25. Click here to view the complete list and Special Report schedule for extended profiles for each of the 2013 IA 25 honorees.

For John Taft, head of wealth management at RBC Wealth Management, managing clients’ wealth is part of a higher calling.

“As a newspaper reporter right out of college I covered the rebuilding of the city of Lowell, Mass., and was very excited about getting involved in community development. As it turned out, I thought public finance was a way to do that.”

While RBC will focus on its expansion in U.S. capital and wealth management markets, Taft noted that his main focus is on the quality of the wealth management group.

“Our focus is entirely on quality and excellence, not on scale,” he said, adding that the firm has about 2,000 advisors. “We think that’s large enough to be relevant and meaningful, but small enough to be intimate. We’re happy with the scale. We’re just committed to being better in every way: hiring the best advisors, putting the best products and services on our shelf, and continuing to build out our technology and operational platform.”

Among the biggest challenges for advisors, of course, is the regulatory storm coming from policymakers.

“Advisors and the wealth management industry generally, of which they are a critical part, are experiencing a tsunami of new regulation, some of which has already hit our shores, but a lot of which is on the way,” Taft said.

Another big challenge, though, is the shape of the industry itself.

“The business model is evolving from a sales model to a far more consultative and professional model, and is evolving from product specialists to holistic wealth management,” according to Taft. “Being a professional holistic wealth manager is a completely different business model and job than being a product salesperson, which is what a lot of advisors started out being. They’ve seen this dramatic transformation in our industry over the last 30 years, all of which has been for the good, but it’s been very challenging and advisors have had to adapt and grow in order to be effective meeting client needs and being differentiated and competitive today.”

Fiduciary is a topic on most advisors’ minds, but Taft suggested they should set their sights higher. “Stewardship,” he said, “is all about responsibly managing what others have entrusted to your care. Stewardship is, or should be, the fundamental mission, purpose and responsibility of the wealth management industry.”

Stewardship is a “close cousin” to fiduciary, Taft said, but it goes a little further. “Fiduciary is a minimum legal standard. Stewardship is a higher standard even than fiduciary. It means thinking about others, i.e., your clients, in everything you do.”

By working toward that “higher calling,” advisors have an opportunity to differentiate themselves, Taft said.

“I’ve been speaking about stewardship for the last year, and it resonates with everyone. People understand what it means, and a lot of the clients of wealth management firms are themselves stewards,” Taft added, referring to the heads of wealthy families, business founders, and trustees of pension funds or endowment funds and foundations who are often clients of wealth management firms. “One of the things we need to do a good job of, and can do a better job of, is help our clients be more effective stewards of whatever wealth they’re managing.”

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