“I think the leaders of investment firms don’t understand mortality tables,” joked Jim Ware, a CFA whose firm, Focus Consulting Group, helps such firms understand their cultures and how that differentiates them from their competitors. Ware, speaking at Pershing’s ninth annual Insite conference on June 6, was referring to the tendency of those leaders to put off serious succession planning to their, and their employees’, detriment. That theme was picked up by Moss Adams’s principal Mark Tibergien in a separate session at the conference, which brings together broker/dealer home office personnel and RIAs, in which he warned that many advisors were suffering from a “cultural lock-in” that leads them to believe that they can continue to achieve success operating as they always have. That’s a big mistake, Tibergien argued, because “boomers and their children are extraordinarily demanding,” and will begin to realize the power they have over advisors just as the demand for advice increases, as the number of advisors grows, but as the talent pool for advisors remains small. To compete successfully in the future where the differences between broker/dealers and RIAs becomes harder to discern, Tibergien preached that advisors should “focus on the optimal client,” that 20% of an advisor’s clientele that brings in 80% of revenue, and build practices that accommodate the most talented advisors.

As for Pershing, John Iachello, who runs Pershing Advisor Solutions, noted that there were 300 first-time attendees at Insite, and that total assets at Pershing from RIAs stood at $72 billion. He also mentioned the business-changing impact of the court decision invalidating the SEC’s Merrill Lynch rule, and noted in passing that Pershing itself has $30 billion in broker/dealer fee-based brokerage accounts that must be moved to accommodate the 120-day deadline set by the court.