The Apple iPhone upgrade cycle is complete until next year. This time consumers had two choices – the slightly updated iPhone 8 or the totally new iPhone X. Did you upgrade? Clients and professionals in the wealth management industry have similar choices. Should they upgrade or stay with their current business model? Some wealth management upgrade choices can feel like getting the slightly newer model when a more thorough re-boot is required.
Wealth Management Options
The basics of a phone remain but the upgrades enhance the basic functions. The same holds true for wealth management. The good news is we don’t and shouldn’t upgrade our business as often as we do our phone. But when compelling innovation within an industry makes a substantial leap forward, we have no choice but to adapt or be left behind. Do you know anyone still using the first iPhone?
Wealth Management 1.0:
This is the foundation that all wealth management firms must have.
Wealth Management 2.0:
No institutional limitations on money management choices
No cross selling
Wealth Management 3.0:
Structure that limits the downside to protect clients from unforeseen equity market declines.
Eliminates the necessity for items from 1.0 and 2.0 that don’t work as well as promised
Promotes a long-term outlook for clients and for advisors
Favors consistency of investment outcomes and experience over the classic boom/bust scenario
All breakaway brokers are not created equal. The ones that get the most press have large books of business and are leaving wirehouses for a bigger paycheck. In this process they, at best, only upgrade to Wealth Management 2.0. That explains why 80% of the largest brokers remain tethered to large banks. This highlights the old school mindset of most Wall Street brokers. The good news is that the new generation of advisors have a different mindset and they are actively embracing Wealth Management 3.0 in record numbers.
I have spent my career trying to attract clients and advisors to WM 1.0 and 2.0 with considerable success, but I realized there was a better approach. Recently, I decided to upgrade to WM 3.0 and join Fort Point Capital Partners. They have a 3.0 solution and I hope to help them and other advisors realize the power of this evolved approach. November 15 was my first day at Fort Point, but if I’m upgrading why stop here? I’m also upgrading my blog and adding three new writers with expertise in areas that are essential to WM 3.0.
I’m energized by the excitement of upgrading and in this case I don’t have to stand in a long line! Neither do you.