In the lead-up to the RIA Intel Awards, we asked several nominees and Rising Stars to share their thoughts on three key questions. Responses have been edited for clarity and length.
I’m watching for…
Every RIA has hopes or fears that we’ll see certain economic events or signals in the next year. What are you watching out for?
| Rick Buoncore Managing Partner, MAI Capital Management Finalist for RIA of the Year More Than $1 Billion AUM | |
| Like most, we are keeping our eyes on inflation, but are optimistic in our outlook. In the coming year, we’ll be paying close attention to labor to see if there is any rollover in employment. For the last several decades we have exported jobs and therefore imported deflation by using cheaper energy and cheaper labor to produce goods. There is potential for a labor reset as companies decide to produce certain goods domestically which will give way to a rise in costs, keeping inflationary pressures on the economy for a longer period of time. | |
| Leo J. Kelly III Founder and CEO, Verdence Capital Advisors Finalist for RIA of the Year More Than $1 Billion AUM | |
| One of my great fears, whether in a year, or the next four or five, is the shutdown of the global economy. We don’t fully appreciate the magnitude of the impact of how much money has been put in the system and how disruptive it is; who would have thought that the Fed running 75-point increases would be okay? If we said that 18 months ago, everyone would be jumping out of windows. If the government is going to pass multi-trillion dollar spending bills on a regular basis, inflation is not going down. | |
| Andrew Altfest Founder and CEO, FP Alpha Finalist for Most Innovative Technology of the Year | |
I am focused on watching the mass customization trend across the advice spectrum. Advisors are becoming the general physicians of finance, offering more services to clients. It is a very interesting conundrum: how do you deliver customization in a scalable way? Through recent advancements in technology, the financial planning space is starting to see new ways to cater to both the young professional family with multiple goals (e.g., cash flow planning, tax reduction, risk management, etc.) and the retiree focused on estate planning. We should see the ability to produce financial plans that are more customized at a faster pace to the point that advisors might start seeing time open up in their book of business.
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I respectfully disagree…
What is a popular opinion with which you disagree, and why?
| Evan Schmidt Shareholder and Financial Advisor, Schmidt Financial Group Finalist for RIA of the Year Less Than $1 Billion AUM | |
| We aren’t enthusiastic about corporate share buyback plans despite their widespread use. While the result – more earnings per share – has typically benefitted clients with employer stock (via higher stock prices), it’s also debatable if value is created. | |
| Matthew Robertson President and Partner, Callan Family Office Finalist for New RIA of the Year | |
Early in the year, a good deal of emphasis was placed on the idea the Federal Reserve will push rates higher well into 2023 or even 2024. We believe the elevated levels of CPI are transitory, and the combined effects of massive fiscal and monetary stimulus (over $6T) to ward off economic impact from the pandemic compounded with supply chain disruption and the war in Ukraine to create a squeeze on prices. Consequently, many of these issues are in resolution, and the slowing inflationary data will allow the Fed to reduce its cadence and resume a neutral stance in the near term. We believe the easing cycle has already begun, we and take comfort that the bond market corroborates our point-of-view with the 5-year, 5-year forward rate barely moving year-to-date.
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If we only make ONE change this year…
What is the single most important change RIAs need to make for the wellbeing of the industry?
| Brea Dantin Chief Operating Officer, ProCourse Fiduciary Advisors Finalist for Retirement Plan of the Year | |
| RIA’s need to focus on bringing in young talent. I am not sure that anyone goes to college and decides they want to be a Retirement Plan Advisor let alone a large group that wants to go into sales. How do we cultivate and capture the next generation of Advisors? The RIA industry isn’t going to escape the Boomer retirement surge. Not only do we need to attract the next generation, but we also need to retain them. It can take years to become an industry expert, so the time is now. | |
| Nathan Wallace Principal Wealth Advisor, Savvy Wealth Finalist for Most Innovative Firm of the Year | |
| Three main issues jump out at me. First, RIAs need to find a way to reduce costs to clients. Margin compression has come to most industries, so charging 1%+ in a tech-enabled world where advisor workflows are being simplified and automated seems like a point in need of change. Second, the industry needs to do a better job of being transparent with clients about investment plans, bringing the client in so there is consensus and understanding on both sides. Lastly, RIAs need to leverage their technological resources to build trust with clients. Delivering on this goal will be differentiator for advisors in the coming years. | |
Eric Poirier | |
| Financial services is one of the largest industries on the planet, but until recently, the way it operated had remained unchanged for decades. Today, change management is necessary to keep up with the pace of innovation and remain competitive. Partnering with modern technology to inform data-driven investing and advice enables smarter, more efficient allocation of capital. Ultimately, a data-driven investment management team helps prevent fallout and outperforms during times of turbulence by fostering operational discipline and clear accountability. | |
The inaugural RIA Intel Awards are a celebration of financial advisors, wealth management firms, and industry leaders. Winners will be announced on RIAIntel.com September 14, 2022 and will be honored in person at upcoming RIA Institute Forums.
