Crises tend to spawn hyperboles. A year ago, the national media and many others were proclaiming that the upheaval wrought by the pandemic would change most things, if not everything. As usual, that narrative was excessive.
But for financial advisors, the new landscape already is clear. Many clients and prospects are rethinking many of the priorities in their lives.
What they do, where they live and when they retire are top-of-mind issues. A stream of new clients was only one of several reasons many RIA firms enjoyed the best year in their history in 2020.
For many successful RIAs, however, the biggest constraint isn’t the supply of new clients. It’s the shortage of talented advisors to service them.
As senior editor Eric Rasmussen chronicles in this year’s RIA survey on page 33, the pandemic changed the role geography played in the way advisors work with clients and staff. Quarterly meetings were already on the wane, as many time-pressed clients found that their needs were more situational. Portfolio reviews could be done over the phone—or now Zoom.
Many clients have more pressing issues than their portfolios, most of which looked pleasantly plump by mid-2021. All other things being equal, increased wealth has given millions of Americans expanded financial independence.
The public health crisis occurred at precisely the same time the average baby boomer was turning 65 and entering or contemplating retirement. There is a reason Fidelity has kept running its “change of plans” ad on television over the last year.
Virtual work is now a reality in the RIA world in a way that it isn’t on Wall Street. Morgan Stanley, Goldman Sachs and other giants are ordering employees to return after Labor Day.
One obvious takeaway is that it’s a lot easier to monitor the productivity of 50 or 100 employees than it is to track 70,000 people. Another is that the open architecture platform embraced by many RIAs is far more compatible with flex work than control-driven wirehouses are.
It remains to be seen exactly how this plays out. Microsoft’s CEO recently told Barron’s that the shift to hybrid work would be the “biggest shift” in a generation. However, skeptics think that the work-from-home trend could be short-circuited if employees start thriving in the office again.
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