As most experienced advisors know, perhaps the best times to win new clients are during periods of economic and market turbulence. An uncertain business climate and volatile financial markets inevitably provoke anxiety, prompting people to seek advice.

Like the Great Recession in 2008 and 2009, the past three years are turning out to qualify as one of those times.

But the circumstances are very different: Fifteen years ago, apprehension about job security was an issue for millions of Americans. Inflation was not a problem and the cost of living didn’t challenge the 90% of the workforce who kept their jobs.

Today, financial asset values are higher, but lifestyle issues arising from the pandemic are prompting clients to rethink their priorities, such as how they work and where they live.

In mid-October, I interviewed Creative Planning CEO Peter Mallouk for The Preeminent Advisor Summit that we co-produced with CEG Worldwide. It’s hard to find a better perspective on this business than from talking to someone who has built a $135 billion RIA, acquired more than 30 other firms and still makes time to service some clients.

One major difference in the wealth management landscape today as it compares with 15 years ago is the growth of the RIA model. Mallouk commented that when Creative Planning would attract new clients during the financial crisis they typically came from a major wirehouse like Merrill Lynch or Morgan Stanley. Today, new clients are coming from other RIA firms, and he expects that to continue.

Several factors explain this trend. Back in 2008 and 2009, many affluent Americans understandably felt uncomfortable trusting their life savings to financial services giants forced to seek bailouts from the federal government. But changes in the RIA space have also furthered the trend—RIAs have much larger national footprints today, and firms like Creative Planning, Captrust, Edelman Financial Engines, Mariner and Aspiriant have a presence in most major markets.

Given their bigger presence, it’s inevitable that RIAs are going to bump into each other more and more. This business remains a remarkably fulfilling profession, and while big firms are expected to keep gaining market share, it doesn’t mean smaller advisory shops can’t thrive in the future. However, no one is likely to see a field of open daylight in front of them the way they used to.

Evan Simonoff
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