Here’s a big forecast from Lon T. Dolber, founder, president and CEO of independent broker-dealer and RIA American Portfolios: “In five to 10 years, all financial services will be based on a fiduciary standard. There will be no more commission business,” he tells ThinkAdvisor in a podcast interview.
“If someone wants to argue that that doesn’t make sense, Great Britain and other countries have given us examples of how it has worked out for them,” Dolber maintains.
The 42-year financial services veteran shared his views ahead of ThinkAdvisor’s LUMINARIES industry recognition awards gala, held Nov. 9 in New York.
American Portfolios, which is privately held, won five LUMINARIES in the categories of Thought Leadership and Education, Executive Leadership, Diversity & Inclusion, and Dealmaking and Growth.
In his podcast interview, Dolber called “stepping more into the fiduciary role from the sales role” the “biggest change” he’s seen among successful advisors. When I started in the industry, I was a salesman selling financial services,” he recalls.
“As a fiduciary, you have to have more knowledge, a better idea of all the products and act 100% in the client’s best interest – and on an ongoing, continuing basis,” he points out.
As for advisor compensation in the not-too-distant future, Dolber anticipates the subscription-based model will gain traction big-time. “You’re now seeing a subscription-based economy. It’s happening all over the place [even with buying] cars and houses.
“Consumers like subscriptions because they can start and stop them and [pay] an exact dollar amount for exactly what [they] get,” he says.
When Dolber launched American Portfolios in 2001, the advisory landscape was vastly different. “The complexity of running an investment advisory firm was, kind of, just getting under way. [For one], the business has changed from commission based to fiduciary based. Very dramatic,” he notes.
Dolber started out at First Investors Corp. in 1979, then moved to MFI Investments in 1991, according to Finra BrokerCheck. Five years later he joined Nathan & Lewis Securities. In 2001, he set out on his own to form American Portfolios.
The firm now serves about 850 advisors and registered assistants. AUM totals more than $25 billion. In winning multiple LUMINARIES awards, AP’s “Paperless” initiative received double honors.
The firm was also recognized in the Diversity & Inclusion category for its two-year funding commitment, featuring an arts scholarship, to support the LIFE Arts in Ferguson, Missouri. It’s part of AP’s effort to bring an urban renaissance to the St. Louis suburb. Further, artistically creative entrepreneurs receive small investment accounts managed by AP-affiliated FAs.
As for advisory clients overall, Dolber stresses that more than ever they’re “interested in a [greater] holistic approach. They want an advisor that can really bring them more than just the investments.”
Dolber discusses these and other vital issues in this podcast interview.