A Coming Wave? – Trends I’m Seeing

Throughout my career, I have routinely had conversations with prospective clients who are either seeking a new advisor or exploring whether to work with one for the first time.  Lately, however, there’s been a large uptick in the frequency and intensity in the amount of successful, wealthy people I’ve talked with who are looking for a change. In particular, they are seeking an independent advisor.

I have an analytical mind, so I can’t help but question the catalyst.  Why in the past 6 months are people hungry for a change?  On the surface, you might attribute it to a poor market in 2022 and assume they’re simply looking for better returns.  So, it may come as a shock that market returns are usually not even a part of the discussion.  In fact, in large part they’re comfortable with how their investments have performed.

So, what is it then?  What are they searching for?  Why now?  After considerable thought and reflection, here are my observations:

There is a need for more comprehensive services.

The wealth management industry is rapidly changing and consumers are demanding more expansive services.  The need for advisors and their firms to grow and adapt has never been greater.  Simple investment management and vanilla, cookie cutter “planning” are no longer enough.  Successful individuals are looking for additional services such as tax planning, charitable planning, business succession planning, cash flow forecasting, digital tools, and a much deeper wealth management experience.  In my view, generally speaking, I believe it is difficult for advisors and their firms (particularly large firms) to adapt quickly to changing trends.

People want to assemble an advisory team of the future, not the past.

This seems to happen frequently nowadays.  I’ll speak to someone in the late stages of their career who suddenly realizes that their financial advisor is also in the twilight of their career.  They come to the realization that once they retire, they won’t have anyone to rely on for guidance during the most pivotal financial time of their life.  As a result, many people are looking for a new advisor who has a great experience, but also has 20+ years of their career ahead of them.

I believe it’s a great exercise to re-evaluate your financial advisory team as you approach retirement.  For example, traditional financial advisors may be stuck in the mindset of growing investments, rather than focusing on the important intricacies of tax planning, asset location, and the emotional challenges of retirement.  It is important to work with whoever is best suited to help you navigate the unique financial challenges of a new stage of your life.

Folks are seeking a true “fiduciary.”

The public is more aware of the potential conflicts of interest with advisor compensation and are seeking out true fiduciaries.  The financial services industry is peppered with people representing themselves as advisors, but are actually salespeople, selling products to generate commissions.  To be clear, there is nothing inherently wrong with someone earning commissions on the sale of an investment or insurance product.  However, the consumer is best served when they are informed of this potential conflict of interest.  It’s incredibly frustrating to me that so many “advisors” are not held to a higher standard of transparency.  On the contrary, someone who is acting as a “fee-only” fiduciary is required to act in their client’s best interest at all times, and the only form of compensation they receive is directly from the client themselves.

Someone has encountered a financial transition.

Financial transitions have always been trigger points for individuals to reevaluate the professionals they use.  Examples include receiving an inheritance, leaving a long tenured career, selling a business, divorce, etc.  In particular, I’ve noticed many business owners are ready to sell their business.  It seems the multitude of challenges over the past few years have finally convinced them they need a change in pace.

So, is this movement a trend or simply an anecdotal observation based on people reaching out to me with questions on our practice?  Only time will tell.

But one thing is certain.  As Counterweight Private Wealth continues to adapt and evolve, I’m proud of our team, our growth, and the enhancements we continually make to our services. I can unequivocally say that the level of deep and comprehensive advice and planning we provide today is exponentially better than we’ve ever done in the past.

And we’re just getting started.