Name
Title: President
Company: Adhesion Wealth
Website: https://www.adhesionwealth.com
Barrett Ayers joined Adhesion in 2004 and is one of the original founders of Adhesion Wealth. As president of Adhesion, Barrett oversees strategic direction and long-term growth plans for the organization. Adhesion Wealth, a wholly-owned subsidiary of Vestmark, Inc., is a provider of outsourced managed accounts integrated with practice management tools and outsourced back- and middle-office, to wealth advisory firms.
What does your firm do/offer within the fintech sector?
Adhesion Wealth (“Adhesion”) is a managed account platform designed to help independent investment advisors create, customize and deploy their very own, personalized investment program in a highly scalable fashion through the use of our administrative and operational outsourcing capabilities. These services include trading, rebalancing, cash management, tax and transitional services.
Through our platform, we can introduce any of our 450+ asset managers and their 4000+ investment models to advisors. Advisors who use our platform in turn can build their own portfolios using any combination of equity SMAs, ETF strategists, or fixed income managers, while also wrapping in their own investment ideas into the portfolio.
If the advisor does not wish to develop their own portfolios, they can also use any one of our OCIO providers who offer a variety of different portfolio construction philosophies and approaches to assembling managers.
Think of Adhesion as the Netflix of the fintech space – we bring together consumers (advisors) and content providers (asset managers) in a really intuitive environment.
What area/s of fintech do you believe will grow the most in the coming 5 years?
We think any fintech solution that helps independent advisors ‘pick a path’ has a real chance to succeed and can help them witness meaningful growth over the next 5-10 years. With fee compression being what it is and appearing to have some staying power, we expect advisors to face an existential threat forcing them to choose between going all-in on being a client manager, or to focus on really good and highly differentiated asset management services. I believe the days of being a part-time wealth manager who also builds investment models are about to face rapid obsolescence – particularly for those advisors who have not yet achieved critical mass in terms of assets and revenues.
So we expect to see advisors embrace solutions that help them do more with less; we are predicting both model marketplaces and direct indexing will start to take center stage. Direct indexes help advisors reduce product cost while offering clients the ability to customize their portfolio to accommodate their personal lifestyle and preferences, while simultaneously minimizing tax burden – with the potential added side benefit of preemptively shielding the advisor from their own fee compression. When utilized within a managed account platform, the advisor can blend these lower-cost, customized direct indexes with more active satellite models with the intent of keeping taxes neutral and providing a highly differentiated and personalized solution.
What are the biggest problems facing the fintech industry in the future?
Ironically, if you really look at the fintech solutions that are out there today, I think we are at an odd tipping point where technological barriers-to-entry are really low, yet there seems to be a dearth of real problem-solving innovation. It has never been easier to add a really attractive frontend on top of a poorly constructed engine. And it couldn’t come at a worse time – as there is an accelerating need for advisors to be more efficient in the face of mounting fee compression and new, unconventional forms of competition. We caution advisors to beware when shopping for technology – don’t assume that an elegant frontend means an elegant backend.
We hear from so many advisors that have made a large investment in advisor tech – in terms of software, hardware and people – that it resulted in far more of a resource drain than originally anticipated and, in most cases, actually prevented growth rather than accelerated it.
Bottom line: ask hard questions; don’t be afraid to issue an RFP and pop the hood; it could mean life or death to your practice.