Robert “Bobby” Powell is vice president of distribution sales at iPipeline, where he leads the wealth management and insurance distribution sales teams. The focus of these two teams is to support wealth managers and insurance distributors with the tools they need to help more families secure their financial futures.
Russ Alan Prince: What are the top wealthtech trends you are predicting for 2024?
Robert “Bobby” Powell: The ongoing M&A boom and consolidation trend within the wealthtech and wealth management sector is on track to continue into 2024, while the pace should continue to cool. Private equity firms have driven a record number of deals in the space over the past few years and will likely continue to find similar opportunities into the new year.
Another major driver in 2024 could depend on the fate of the DOL’s proposed newest fiduciary rule, which continues to make the rounds on Capitol Hill. At the moment, uncertainty rules the day as far as this latest draft of the legislation is concerned.
We saw uncertainty around the DOL’s first iteration of this rule put a freeze on the industry for several years. The good news is that firms are likely more prepared for it this time around and likely poised to take action more quickly. We expect to see technology leveraged more heavily to address any legislation changes or additional requirements that are coming in 2024.
Prince: What are some considerations wealth management firms should be mindful of when looking to incorporate life insurance and annuities into their practices?
Bobby: For most advisors, this type of growth requires a very different mindset than what they are used to. Historically, the insurance business was seen as more of a competitor in the broader industry. Fast forward to today, and more and more advisors are embracing these products and building them into their offerings. Clients are interested in these offerings, and if advisors can’t meet these needs, they risk losing business.
Financial professionals incorporating these products into their practices for the first time are learning something entirely new. It can feel like starting over in one’s professional life. That is why the key to finding success in this evolution revolves around education. There's so much education that goes into being prepared for this. Simply put, it is the difference between make-or-break.
Prince: How can technology help wealth management firms make life insurance and annuities easier to sell?
Bobby: For starters, technology can help by simplifying the process. Life insurance and annuity products are inherently complex, and they require client conversations that can be very different than what advisors are used to.
Take annuities alone, for example. They can be securities and insurance products, which are regulated in different ways. And there are various types of annuities, each catering to different risk appetites and types of investors. This is where technology has been stepping in to help uncomplicate or “democratize annuities.”
We have learned, working with our partners, that an advisor who has a bad first experience processing an annuity sale is less likely to offer it again. Given the wealthtech available to advisors today, a bad experience when clients are interested in the product itself should not be a possibility.
The industry’s digital revolution is well underway. Technology has already helped streamline the process of annuity sales for financial professionals, with more and more carriers coming onboard to adopt industry standards. Future innovations in the space will likely continue to revolve around making it even more simple for advisors to sell these products within their overall offerings, and not as piecemeal or by sending clients down the street.
Prince: Looking back on the past year, what are some of the highlights and learning points regarding the wealthtech space?
Bobby: This year was another year of explosive change and disruption, and that is one unending theme we’ll continue to see year after year. This space is constantly changing. For example, look at the large acquisitions and ongoing consolidation of key players that we have seen over the past several years alone. Anytime there's consolidation, we typically see an equal counterbalance of new individual firms springing up from a specific need.
We are an industry made up of many problem-solvers and innovators. There is always someone looking at the problems in our space from the inside and then building solutions to address those problems. That's what keeps our industry moving forward. Whether the financial markets are up or down, and regardless of the economic climate and landscape, wealthtech is constantly changing.
Russ Alan Prince is the executive director of Private Wealth and a strategist for family offices and the ultra-wealthy. He has co-authored 70 books in the field, including Making Smart Decisions: How Ultra-Wealthy Families Get Superior Wealth Planning Results.