The Wealth Consigliere

It’s rankings season, and we’re not dreaming of March Madness just around the corner and our chance to win a billion dollars . We’re talking about the wealth management industry’s plethora of benchmarks: Barron’s Top 1000 Advisors, InvestmentNews’ Top RIAs, Financial-Planning’s Top 50 Fee-Only Advisors. The list goes on. Since Wall Street’s instinct is that bigger is better, there’s glamor for both individual advisors and RIAs for topping these lists. But do the rankings really matter? After a career on Wall Street and now working with successful independent advisors, I see three points-of-view: 1) Rankings do matter; they reinforce the clients choice to hire an advisory firm; 2) Rankings are a distraction and don’t reveal anything meaningful; 3) Both points-of-view are valid. You can argue both sides of the argument. Why Rankings Matter With money mangers, it’s easy: Measure them by risk adjusted performance. For wealth managers, there is nothing so clear-...

The history of disintermediation has been very painful for industries and professionals of all kinds. Most never see the dislocation coming. In the information age, we’re savvy enough to realize that continual innovation will change the way we do our job. Counter-Intuitive As we set our goals for 2014, here’s a counter-intuitive idea to consider: Start disintermediating yourself now.  The Internet will render obsolete at least part of your value proposition over the next 10 to 15 years. The Three Stages of Disintermediation In the spirit of seeing around the corner, here’s the arc of distintermediation. Stage 1 is when early adopters embrace a new technology, product and service. These individuals are enamored with technology and how it creates opportunities to be better, smarter and faster. These people are early adopters by choice. Stage 2 is when a disruptive idea gains widespread awareness. Like all tech-inspired upheaval, establishment players r...