One of the things that we pride ourselves on most at Truelytics is our focus on the future of the wealth management industry. Our entire business is built on the concept of helping firms increase the value of their business in the future and preparing for an eventual transition via succession or M&A event.
With that in mind we thought it might be fun to share some of our predictions for 2019.
~ Terry Mullen, CEO of Truelytics
Client access to information and free advice has accelerated in recent years and the role the advisor plays is changing rapidly. No longer can an advisor sit out on an Island with little or no support and sell products. We are seeing a resurgence of advisors go back to a (better) employee model. Just look at firms like CapTrust, Focus Financial, United Capital, etc.
The little guy can no longer compete.
Hear more of Terry’s thoughts on episode 1 of the Valuations podcast.
~ Carla McCabe, Director of Practice Management at Truelytics
For 2019 (and beyond) I expect the number of M&A transactions to increase significantly (though they will remain largely unannounced). We know considerable consolidation is imminent, especially given the demographic of aging owners/advisors. I believe the number of completed transactions will pick up speed in spite of (and maybe even because of) what happens in the financial markets.
Speaking of the financial markets, while most agree that a correction is looming, I predict that there will be little to no impact on valuations and that it will continue to be a seller’s market. Even with the influx of potential sellers seeking to exit the industry, the demand for these businesses will remain high, commanding top dollar and creating attractive deal structures for sellers.
Get to know Carla and learn about her role as the director of practice management on episode 2 of the Valuations podcast.
~ Mike Langford, Host of The Valuations Podcast
Clients and prospects love video. Who can blame them? They have a full HD screen and video camera in their pockets at all times and every social media service they use now features video above other forms of content.
Personally I have always felt video should be a core component of any firm’s or individual advisor’s digital strategy. In 2018 however even I was surprised by the spike in engagement we saw with our videos and those of our clients. On LinkedIn for example, engagement rates were frequently 10 to 100 times higher with video posts than plain text.
I expect that 2019 will be the year that advisors embrace video as a mechanism to reach their clients, prospects, and referral partners in a much more personal way. The results will follow.
~ Shane Morrow, Managing Partner of IronBridge Wealth Counsel
In economics 101 terms, financial advisors are moving from price makers to price takers over time as technology continues to level the playing field and standardize the portfolio deliverable. As such, the favored pricing model of advisors, the traditional AUM percentage, will be challenged by the industry’s forward thinkers and a general public that is more price sensitive.
A few candidates to encroach on the AUM pricing model may include advisory fee caps, flat-free pricing, time-regressive fee schedules, and/or an al la carte model that would allow the client to pay separately for advice aspects like custom asset allocation versus simple portfolio implementation of a model index portfolio.
Get a more expansive view of Shane’s vision for the future of the wealth management industry on episode 4 of the Valuations podcast.
~ Henry Yoshida, CEO and Co-Founder of Rocket Dollar
In the past 10 years we have seen the rise of the robo-advisor, with large players such as Betterment and Wealthfront gathering billions of assets seemingly overnight. The industry has segmented robo advisors as competitors to traditional brick and mortar wealth management shops. A few wealth management companies, such as Edelman Financial, offer both brick and mortar and a robo solution.
As robo solutions become commoditized and more white-label robo solutions are offered, we will begin to see more traditional advisors establishing robos as one pillar in their marketing strategy rather than viewing the robo offering as a threat to their business.
Learn more about how Henry and his team at Rocket Dollar are helping advisors offer new investment options to their clients on episode 8 of the Valuations podcast.
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