Executive Roundtable

With crises in world markets permeating the news and market volatility becoming the norm, the need for professional financial advice has never been so strong. Yet these are challenging times for financial advisors, who are not only trying to navigate the choppy markets but also maintain strong ties with their clients. 

Following the Tiburon CEO Summit XXI in San Francisco in October 2011, seven financial services executives presented their views in a round table discussion. The 60-minute conversation was a spirited debate. In this excerpt, the participants talk about technology and the client of the future. 

On Technology And Future Trends

David Smith, co-founder and group publisher of Financial Advisor and Private Wealth magazines: I think Pete Kight, managing director with ComVest, who addressed our group yesterday, properly pointed out the financial services industry really is behind the curve in technology, in terms of consumer technology at least. There are all kinds of things that we're doing technologically to advance our industry. But in terms of our interface with the consumer and meeting their needs at the same level that their needs are being met by other providers-well, we are falling short. They have a certain level of expectation, so how do we in financial services deliver at that level?

Dave Hubbard, president of Exemplar Financial Network and regional director of Financial Network Investment Corporation: Yes, the consumer has an expectation of what they want and how they want those services to be delivered. The whole online presence is important. Facebook is setting a standard, Google is setting a standard. If we don't give them something that looks and feels as easy to maneuver, then we'll lose the clients to someone who will provide that standard.

Frank Trotter, president, EverBank Direct: It is kind of a battle. You can extend or fight to retain the old life or you can realize that somebody-whether it's a Google or somebody from the financial services industry-is going to come in and get it right. 

Smith: But it goes way beyond account aggregation and just pulling it all together so your clients can look at their liabilities and assets. I found it interesting that while it is intuitive that everyone would want a consolidated look at their financial lives, one consumer panelist (on the "Ask the Consumers" panel) said the ability to see it all in one place scared him, because if he can see it all in one place, then a hacker can see it in one place. That comment was very revealing and I hadn't really thought of it that way until he pointed it out. 

Alex Potts, CEO, Loring Ward Group: What's interesting is the amount of information that's readily available now. Ten years ago, there was no Google, which meant scraping through your ADV to find out important and detailed information about the advisory firm. Now, within seconds, you can go on to Google and find out all about an advisor. This transparency notion-that "sunshine is indeed the best disinfectant"-is really becoming true now. 

On Serving Clients Well

Pat McClain, co-CEO, Hanson McClain Retirement Network: I think it's important to ask: What's the client of the future look like? At the end of the day, they want someone to tell them how they should be doing it. Whether they take our advice or not doesn't matter. They want it.

Trotter: It's the job of the advisor to filter all those important things that need to happen-to help the client feel good about the decisions you agree to make. I wanted to ask the consumers, "What's your goal in life? You're x years old, what are you trying to do?"

Gail Graham, EVP Marketing, Fidelity Institutional Wealth Services: Most of our advisors don't use technology as a collaboration tool. But that's going to change because their consumers are going to drive them there. During the life planning discussion, several of the consumer panelists spoke about their whole lives and that the money shouldn't be the primary thing driving the financial planning discussion. It wasn't really about performance anymore. I wonder if it's the past decade that's changed people's views or if it's more than that; perhaps it is more that people are recognizing that financial planning and retirement planning are still really, really important.

On Challenges And Opportunities 

Susan Theder, Chief Marketing Officer, Cetera Financial Group: The biggest challenge and opportunity for advisors going forward might be one in the same. I think it's the technology advancements that we as an industry are dealing with. From an advisor-to-client perspective, it is the need to evolve communication methods to incorporate the new technologies. But at the same time, the technologies will empower the advisor to work more efficiently and benefit from things such as an ever-growing number of communication channels, more sophisticated house-holding and account aggregation tools as well as additional access points to previously more-difficult-to-obtain data.

Potts: From my perspective, I think the challenge ties in closely with the opportunity. The advisors need to move past just the investment solution. The more they understand the relationship and manage the behavioral aspect of the client, the more it gives them an opportunity to succeed in the relationship and to establish the trust. Inherently by having that trust, they will act as a fiduciary for that client; they will always be acting in the best interest of the client. Those who aren't in that marketplace or who aren't behaving that way will have a real difficult time competing with those who are. If you're doing things right, the regulation should hopefully not be that big of a deal.

Graham: The mass affluent, as a market, is underserved. Helping advisors figure out how to serve the mass affluent is another growth opportunity. I think it's both a challenge and an opportunity for advisors to try to figure out how to communicate with their clients differently using tools and technology, social media and other forms of marketing, to grow their practices. I think it's a challenge because it requires changes in behavior. But it's an opportunity that allows them to scale their practices, grow them potentially beyond the regions in which they live. And while I think it's hard for us to imagine today, ten years from now we'll look back and we'll see this incredible evolution. I think it's an evolution that will surprise us as it continues to move forward.

McClain: I think the biggest challenge in the next few years for advisors is the regulatory environment. The regulators don't know what they want so we can't manage to their expectations because they're too far out there. I think the biggest opportunity is the shrinking pool of people who are offering personal investment advice and the fact that not a lot of people are entering this business while there are a lot of people leaving this business [retiring]. I think that for the good operators, there's nothing but opportunity out there.