What You Need to Know
- There's nothing wrong with RIAs, but there is a real opportunity for independent financial firms to do it a different way.
- Wealth management firms are being pushed to focus on developing their tech platforms to meet clients where they are.
- To provide a holistic wealth planning experience for your clients, it’s imperative that you have all the capabilities in-house to meet any of their needs.
It’s no secret that robo-advisors, do-it-yourself investing platforms, and financial technology players are disrupting wealth management as we know it. Some feel threatened by this.
Factor in fee compression, rapid consolidation and the number of advisors aging out of the industry, and it is understandable that old-school money management firms would be tempted to make knee-jerk decisions, looking to accumulate enough assets to obtain a suitable multiple and sell to any number of aggregators looking to gobble them up … only to be acquired themselves down the road. The path of least resistance.
There is no shame in selling your advisory firm. No blame can be placed upon those looking for the exits and the financial reward that comes along with it. The M&A space in financial services has never been hotter. And yet, there is a real opportunity here for independent financial firms to do it a different way — a new way.
I left J.P. Morgan in 2016, and when I started Manhattan West I was welcomed to the realm of the “independent RIA.” It was a fresh start, and we soon got our sea legs and began to grow and adapt to this new world.
But truth be told, we never liked being labeled an RIA. Frankly, we feel it puts us in a box and represents only one element of what we’re building. The RIA segment of financial services has been growing at a blistering pace for almost two decades — and to be clear, there is nothing wrong with being an RIA. In fact, it is something to be proud of.
It just doesn’t quite do us justice.
Candidly, it is not a differentiator to have access to the best asset managers. It is not a differentiator to simply provide access to alternative investments. Nor is it a differentiator to provide concierge-style services to your clients. Modern investment firms offer all of this, and more.