Edelman: Why America Hates Wall Street And How Advisors Can Change That

It is interesting to see that after building a successful financial planning practice, Mr Edelman is now lecturing others about the need to serve the mass affluent. Its also interesting to note that the average account size of his clients is $450k - not exactly your mass affluent client. Does he not know that most independent advisors work hard to serve their client base and have to earn a decent hourly wage unlike him who oversees a very large practice where his employees service the clients while he is busy with marketing activities. For his practice with economies of large scale it may make business sense to serve the mass affluent but for most smaller advisors it is a matter of making the most of the time available. I dont agree with his statement that serving a client with $100k takes less time. On the contrary, a client in the mass affluent market needs more hand holding and may not have the capacity to pay advisory fees. If your business strategy is to serve the mass affluent clients with a 2% fee then so be it. Please dont make it sound that its being done for the good of the people at the cost of lambasting your professional colleagues.

Bravo to Mr. Edelman and to Ms. Hinchcliff for reporting on an excellent talk. I am a new fee-only financial advisor, and hope to serve the average Boomers more than peel a sliver from the richest. That said, I do find the under-$100ks are not easy to serve. Their problems are less "fulfilling your dreams" and efficient asset allocation than finding a way to survive in retirement. Thanks for an uplifting post!

Thanks, Dorothy. This was an incredible interesting post. As someone who recently founded an RIA, and serves the HNW market, I have often thought about this issue. I think, as one advisor questioned, the biggest hurdle is figuring out how to make serving the mass affluent more profitable. Yes, there are far more 100K clients than $1M clients, and a smaller client may have less complex need, but all clients need to be served well, called often, and met with regularly. If we only have so much time in the day, most would rather spend it serving higher NW clients. Edelman has a good model b/c he has been able to employ advisors on a salaried basis, so that all he has to do is increase volume to a certain level and he's making a profit. Most advisors have small firms where we don't have the economies of scale to achieve that. But that doesn't mean we are not able to, it just takes a leap of faith and a different mindset. Thanks again for the great post! Joseph Perrotta Apple Tree Wealth Management http://www.appletreewealthmanagement.com