Raymond James is wrapping up its employee-advisor conference, which took place recently in Orlando, Florida, and drew about 700 financial advisors and about 1,500 other guests. At the event, executives say, the topic of Netflix-like service plans was raised during a town hall discussion.
Like Raymond James’ expanding digital-advice tool, which clients access through their advisors, such innovation is set to play an important role in its advisors’ business, top executives of the firm say. But what that role and its associated fees look like remain unclear.
“Will the world go to a subscription-based, Netflix model?” asked CEO and Chairman Paul Reilly on a call with the media late Thursday. “What levels of service will there be — gold, bronze and platinum?”
Charles Schwab rolled out a $30-a-month plan earlier this year, which charges a flat $300 fee for a financial plan. This week, it said this service helped it bring in $1 billion in new assets and helped put its digital-advice services at $41 billion in total assets.
Reilly remarked that “you probably don’t get much advice” for plans with a price tag of several hundred dollars. “But how about platinum advice with long-term care or nursing home [planning], and multi-generational [plans]?”
There’s “curating of subscriptions” that firms, including Raymond James, could do over time, he explained, “and there may be demand for that.”
He and other executives see wealth management bifurcating into asset/portfolio issues versus more service-related areas, and the option of using subscription-based structures for such operations has caught advisors’ attention.
“We don’t see big momentum to do this [yet], but we are not closed to it. The market will dictate how, when and what we offer,” Reilly explained. Some services might appeal to millennials in the nearer term, while others could take longer to prove popular with higher net worth individuals, he added.
Robos Rolling Along
On the portfolio side, the innovation of robo-advice and its associated popularity can’t be minimized, Reilly said.
“It’s table stakes,” he said, referring to this week’s news that both JPMorgan and Voya were adding robo offerings. “You do see firms like Wealthfront and others plateauing. It won’t overtake the industry, but it will be a piece of it.”
(As of mid-July, Wealthfront had $16 billion in assets vs. $11.5 billion earlier in the year, before it rolled out a cash account that paid over 2.2%.)