Ralph DeVito, The Investment Center: It’s all the regulation.
They can’t go backwards and make new rules on us. That
makes it very difficult to get your business in alignment with
what they want us to do.
As far as the competitiveness — we’re
all independents in this room, and we’re
probably the last four. That’s a joke.
[But] we all remember when there
were hundreds of us, … and now there’s
There’s a ton of competitive pressure
from just pricing. I mean I’m sure the
pressure that [larger BDs] are getting is
different. But overall, it’s hard to keep
up, especially when you talk about all
these rollups, which are difficult for
The rollups are kind of good in a way,
because the big players are taking all
these [registered] reps. And the last 10
reps that I’ve talked to in the office want
to leave [their current firm] and come
to us because we’re all about personal
service. We’re one on one, hands-on all
the time. They want to be able to talk to
people and feel like they’re [treated like
a real] person, but it’s challenging now.
But the biggest [issue] is regulation. Robo doesn’t seem to bother me
much. We have our robo solutions, and
our robo solutions are a little bit more
hands-on than just being client direct.
Lon Dolber, American Portfolios: I
worry about what’s going to change the business. How are
the financial-services business and the delivery of financial
services going to change? That keeps me up at night. Where’s
the business going longer term?
Amy Webber, Cambridge: Like American Portfolios, we are
in a different situation from a size perspective. Yes, regulation
does seem to be driving the changes.
What we think about on a regular basis really is what the
business is going to look like [as a result] — or how does that
[change] combine with what we think the business should look
like [in the future], taking into consideration all of the signals
that we see and are trying to get out in front of.
Advisors don’t change quickly. For the last few years, we’ve
talked a lot with them about the need to transform their psy-
chology. Now it’s time to reinvent their business practices —
not what’s in their heart — but the tactical components of what
they have to do to make sure they don’t get on the wrong side
of the regulation, the rule-making by
enforcement, by still doing business the
old way. That combination [is what we
We’re not really threatened by robo,
because I think of [that trend] as something that’s replaced the do-it-yourselfers that we’ve had for 50 years. But what
our advisors need to do is to figure out
how to combine the human component
with the digital component into their
practices, and that’s not easy. We all
talk a lot about millennials, next generation and generation now as we call
it, because the oldest millennial is 39.
They’re not all 18 and living in their parents’ basement. They’re here today, and
we have to deal with that.
How do we make sure that our advisors, who maybe aren’t 39, are positioning their firms to stay alive and thrive in
the future, to capitalize on what they’ve
built thus far but then reinvent and
We have to do the heavy lifting. We
have to try to see the future, think about
what that’s going to look like and then
bring to the table all of the ideas, best
practices, technology and compliance to
keep them out of trouble. That’s our job.
Dolber: I was reading a Bloomberg article, and a young
financial advisor’s motto is “I’m not your parents’ financial
advisor.” Think about that statement.
Webber: [Those are the advisors that] will likely win that
business when the younger generation inherits the wealth.
We’ve been talking about this wealth transfer for so long
that a lot of our advisors aren’t even sure that it’s going to happen and that they will [likely] lose the business. So, all of the
statistics that we’ve told them about — that 80% of the wealth
is going to go to someone else, not the parents’ advisor, not
the spouse’s advisor, etc. — they’ve gotten almost numb to it
[and think]: “It hasn’t happened yet. We’ve been talking about
“We have to do the heavy
lifting. We have to try to see
the future, think about what
that’s going to look like and
then bring to the table all
of the ideas, best practices,
technology and compliance
to keep them out of trouble.
That’s our job.”
IA: Today, the number of broker-dealers is down to about 3,600 vs. some 4,600 in 2010. There is
pricing pressure, as well as the competitive threat posed by robos and other options. What is your
BD’s top challenge or concern — or put another way, what most keeps you up at night?