How the latest trends in wealth management paved the way for my new firm
When you look at our current landscape in wealth management, it feels like there’s never been a better time to start an RIA firm. It's a big reason why I decided to start New Age Wealth Advisors w/ my partner, Todd. I’ll never forget, as I was forming the basis for a consulting business, Todd said to me “why wouldn’t you want to start your own RIA firm.” And frankly, I didn’t have a good answer. The more I thought about it, the more I realized now is the best time to start a firm. Here’s why I changed course from consulting back to starting an RIA.
The abbreviation for financial technology, it’s a general characterization of all the technology that has been introduced to the financial services industry. To me, it's become the great equalizer in the financial advisory space. Advisors who are technically sound and in tune with the latest trends of the industry are finding ways to leverage this technology to their advantage. Because of it, the smaller advisors can now compete with the capabilities of any big firm out there. How are we able to do this?
More with Less - In the past, larger firms were all about scale. Like many businesses, growing in size allows for scale, especially from the standpoint of a back office. But with the emergence of so many new technologies, smaller firms and offices can operate in an incredibly efficient manner. Whether it's utilizing the digital document signatures and processing through a custodian like Charles Schwab, or scheduling clients through a simple app like Calendly, a boutique firm like ours can seamlessly run their operations through all of these tools. Giving them more time to focus on relationships.
Sophistication - Not only are operations more streamlined, but the level of knowledge or expertise is growing due to the help of fintech. Advisors are capable of giving better advice than ever by utilizing the ever growing number of tools that are out there. IT doesn’t replace the technical skills of an advisor, but it does enhance the competent advisor. Whether it's more sophisticated planning, leveraging tax planning and preparation software, or digging into the latest behavioral finance tools to help clients make better decisions, a firm like New Age Wealth can do everything that the largest firms can, if not more.
Scope of Services - The fintech revolution is broadening the scope for an advisory firm like ours to reach clients and help in many different ways. Before, a small firm may need to find a particular niche to set itself apart. But with the tools in place, the level of work we are able to do with investments, taxes, estate planning, and general retirement or financial planning is far greater than ever before. Again, it doesn’t replace the technical skills necessary to be a good advisor, but it enhances and deepens the services we’re able to provide. Another way for us to compete with larger firms in our field.
Reach for an independent RIA has never been greater. And what’s even better for a small firm like New Age Wealth is that even though we are held to the highest standards through the SEC to act as a fiduciary for our clients, we’re able to cast a wide net in our marketing abilities. There are few restrictions in how we can reach and grow our audience or potential clients. This is a massive advantage to our firm in this new digital age. In fact, Todd just called with an idea for a video to share with clients, and we’re already working on it and will get it out in as long as it takes to shoot.
On top of that, recent research is proving that clients and potential clients are more and more comfortable working in a “virtual” environment. They aren’t necessarily looking for a robo-advisor, but they are comfortable working with a human advisor in a virtual manner. This forms the entire basis of New Age Wealth. We invest in best in class technology for communication purposes, and we can reach clients all over the country and beyond. It’s powerful stuff as a boutique firm of two.
We don’t Have to grow at all costs
If you are following any of the latest trends in the RIA/ wealth management space, you would know that firms are getting bigger and bigger - mainly through M&A activity and private equity money. Last year set massive records for the amount of M&A that happened between wealth management firms. The trend seems to be aimed at massive regional, or even national firms. They are calling it an attempt to be the next wirehouses. I’m a business person at heart and will never fault anyone for growing. But I do wonder “who wants to be the next wirehouse?” The trend is going AWAY from wirehouses, so this move to grow baffles me a bit in terms of the future of the client experience.
There’s also an influx of private equity money hitting RIA firms. Again, I’m all for investment and supportive of any firm's path to growth. But I also wonder what the future of client experiences looks like when the bottom line takes precedence above all else in this type of situation.
For Todd and I, the future of our firm is all about building the valuable relationships with clients who believe in what we’re doing and put their trust in us. We can do what any large firm does, but we can do it without the red tape and fixation on the bottom line. Do we want to grow? Sure, but we’re incredibly intentional on what that growth looks like and what our ideal firm can become. We value closeness in relationships and building a modern, boutique firm that puts relationships above all else - even if it is virtual.
So this is what led me (us) to where we are today in launching New Age Wealth. It’s a vision of what the future of wealth management can and should be. And it’s combining Todd and I’s technical ability in wealth management with the abundance of technology tools to allow us to service clients like never before. Leading a smaller firm with a unique culture and the ability to adapt to the latest technology trends has never been better. It makes being in this industry so exciting.
If you are interested in learning more about what this future looks like, please feel free to schedule a time to speak today.