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March 27, 2023 at 12:35 PM
What You Need to Know
- My prediction of what's next for the financial advisory business doesn't have to happen. Here's the key change that can make a difference.
Welcome to 2026: It’s become clear that neither the wealth management nor insurance industries had proven capable of sufficient change, and three recent MIT grads have stepped in to capitalize.
They introduced the world to “Jen Ret,” the first artificial intelligence retirement income advisor. Within three months of its introduction, Jen Ret was generating income plans for retirees at a rate exceeding 250,000 per month.
Why would an AI advisor win the confidence of three million retirees, 92% of whom were women, in only its first year of operation? That question, and its answer, “it listens,” would be talked about and scrutinized for a decade. A 2030 headline from Blunberg News captured it: “The Bot That Blew Up Financial Advisors.”
The financial advisory business was decimated. By 2031, 63% of male advisors had left the business, after suffering, on average 77% loss of assets under management.
Flawed Assumptions
“I had a very successful practice,” said George B., a 71-year-old former financial advisor from Roanoke, Virginia. “But by 2028, more and more of my male clients had passed. It hit me very hard to discover and to come to terms with the reality that I couldn’t retain even one of their spouses. That was a blow I could not recover from.”
Nor could George’s broker-dealer of 23 years. QNTL Securities was but one of 265 broker-dealers that ceased operating between 2029 and 2033.
I asked George if he had considered why he had proved incapable of retaining women clients.
“Considered? About a million times over! I thought I did everything right. I had a great rapport with their husbands. I kept them informed, met with them personally at least twice per year, generally with the wife present. And I delivered good performance. I mean, I can’t control a sustained bear market. No advisor can!”
I probed George about what he felt that he could have done differently that may have enabled him to survive as an advisor.
“I blew it with the women. To be truthful, I assumed they weren’t that interested. I felt their husbands had more knowledge about money. And more interest in it. My view was that the wives were more concerned about maintaining their lifestyles, not about how the money was invested.
“In retrospect, I make a whole lot of flawed assumptions, and those assumptions drove my behaviors. If I can reduce it to anything, it was my making of flawed assumptions that wrecked my career. Those assumptions really prevented me from developing meaningful relationships with the wives.”
George continued, “Look, I wouldn’t be making Doordash deliveries if I had been smart enough to get to truly know the women. I assumed they would simply continue to be my clients.”
What Really Matters
I spoke with several other men who in recent years had left the advisory profession. Their stories were similar to George’s. What I was lacking was an understanding from the perspective of women who had fired their financial advisors.
