Anyone who has spent as much time with financial advisors as I have doesn’t need to be told how lucky we are to be in America. Advisors get to spend their time helping some of the most fortunate among us, not the hedge-fund and high-tech zillionaires but everyday entrepreneurs, professionals and corporate executives who have provided the infrastructure for the world’s most diverse economy.
This nation is far from perfect, and anxiety seems almost pervasive these days. But when one looks around the world, it’s easy to see why so many people want to come here. Inflation has reduced the living standards of people almost everywhere, yet America appears to be emerging from the post-pandemic price shocks faster than other developed nations.
People watching the dysfunction in Washington, D.C., in recent months might find it comical that any nation, even one like Argentina, would elect a leader who wants to “dollarize” its economy—until one realizes that the South American country is plagued by 140% inflation. It might be a viable idea, if only Argentina had a sufficient supply of dollars to do it.
One trait that makes America so resilient is that its economy is remarkably flexible. The evolution of the independent financial advisory business, a profession that didn’t exist 50 years ago, is only one example of that.
In this month’s cover story, Digital Privacy & Protection CEO Mark Hurley lists 10 traits that advisors are going to need to be successful in the future. The article is excerpted from his new white paper, “Welcome To The Jungle.”
Back in 1999, Hurley authored another white paper predicting that this profession would see the emergence of huge national RIA firms overseeing $100 billion in assets or more. He was right about that, though the profession today remains highly fragmented, and new advisory firms are launched every week.
His new report addresses how the successful advisors of the next decade are going to embrace organizational structures that may sound alien to the first generation of entrepreneurs who built this business. The guess here is that more than a few younger advisors aren’t going to like these changes either. And, as Philip Palaveev and Stacey McKinnon suggested in last month’s issue, some of those advisors are likely to strike out and start their own firms. This cycle of creative destruction, a term coined by the Austrian economist Joseph Schumpeter, remains alive and well in the U.S. economy, for all its flaws.
Hurley’s article is one of several thought-provoking pieces in this final issue of 2023. Among the many others I’d urge you to read are Ross Levin’s piece on breaking binary patterns of problem-solving. Hannah Shaw Grove and James Blase, meanwhile, offer two different takes on charitable giving, and Jennifer Lea Reed discusses the ways retirees are going to want to use the 4% rule for withdrawal rates, which has withstood the occasional knock on its validity.
Have a great holiday. See you in 2024.
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