Some personal financial advice just can’t be replaced with an app.

Well-run mom and pop advisories offering superior personal services are going to hold their own against mega asset managers and other big, technologically minded firms, at least over the next few years.

That’s the analysis of Alan Johnson in his latest compensation report tracking results through the third quarter. The latest Johnson Associates “2019 Financial Services Compensation” report found it’s been a lean year for many financial professionals at the biggest firms, although many clients are doing well.

Markets are booming, but compensation growth rates for financial professionals have been sluggish, zero or, in some cases, negative, the report said.

For instance, asset management pay at the biggest firms declined on average by 3% to 4%. The report credited the decline to “slowing revenues and product shifting.”

Hedge funds were almost the same, the report said. Compensation here was only “mildly positive,” either flat or up only about 5%, according to the report.

The report said compensation in the private equity and real estate sectors was also weak: again, either flat or up only about 5%. Here the report also said there was, “positive fund-raising but slowing realizations. Economies of scale dominate.”

Johnson, the managing director for Johnson Associates, says his firm isn’t tracking pay at the small financial advisory firms. But he says the mediocre figures at the biggest firms suggest that the market still sees advisors at these small firms as necessary and important.

“These numbers highlight the need for personal financial advisors; it shows that technology is not replacing personal relationships,” he added.

The personal relationship, he contends, is often more important to the client than an app, no matter how dazzling the app is.

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