Insider’s Forum 2017 – Advisors’ Glasses Are Half Full AND Half Empty

Sep 19, 2017


Bob Veres and Jean Sinclair hosted the Insider’s Forum in Nashville in the week before Hurricane Irma shut down other conferences in the city. The conference was well-attended by executives from RIA firms and by industry practice management experts. The result was a conference with engaged attendees and deep-content presentations. One new, foreign attendee asked me, “Is the level of presentations always this good in US advisor conferences?” Sadly, the answer is no! But these are my notes about the trends presented at this one.

Glass half empty

Every year Bob awards the Insider’s Forum Leadership award. This year it went to one of the industry’s most insightful technology observers, Joel Bruckenstein. For many years, Joel has run the Technology Tools for Today (T3) conference, it’s probably the main independent conference for advisors focusing on technology. In accepting his award, Joel – who is also an advisor – admitted that he was worried about the avalanche of compliance, technology and competition. Specifically that advisors are not reacting fast enough to market forces. Before accepting the award, Joel gave a presentation focused on technology, where he addressed:

Cybersecurity: Advisors don’t think their clients are worried about cybersecurity but they are. Older advisors especially are not reacting to this threat.

Big changes happening in our industry: The way we pay for goods, how borrowing is changing (crowdfunding), the way insurance is being sold (disintermediated insurance brokers), the way we attract clients (technology improvements), and the way we service clients (the rise of chatbots).

Banking change: New disruptor firms such as MaxMyInterest (a firm focused on maximizing the interest on an investor’s cash.) And the many Blockchain applications – property titles, insurance contractors, stock exchanges, settlements and currencies – that are starting to emerge.

Supply of advisors: Most pundits are suggesting that there won’t be enough advisors. Joel posits that the automation of advice will fill the void.

Roboadvisors: They’re a threat. As example, the escalating AUM of Vanguard’s PAS and Schwab’s Institutional Intelligent Portfolios

Middle class and emerging wealth: More people will be looking for advice and will use technology such as the student debt app (@LoanBuddyApp) to fill this need.

Financial planning: Wirehouses and broker-dealers used to pay lip service, now they are all in

Healthcare: Advisors are getting deeper into the finances of healthcare advice as the cost spirals upwards (Whealthcare Planning).

Unbundling of TAMPs: breaking out the intellectual property of investments – such as overlays– from the trading.

Joel covered a lot of technical ground, painting a picture of how technology will impinge on advisors in the future.

Glass half full

On the more optimistic side Bob Veres – who self-identifies as a Futurist – laid out some possible scenarios for advisors and investors.

Mutual funds changing: Future investors will subscribe to communities of asset managers and the investor or the advisor will do the trading. This would allow advisors to offer tax and other types of overlays. Asset managers will sell their intellectual capital directly to advisors.

Index funds: will be discredited after the next bear market. Currently 37% of all managed assets are passive. This means that the price of stocks is being held up by being part of an index. A bear market will expose this.

People living longer: An advisor’s main role will become ensuring that there is enough money for a longer amount of time. Lifetimes made longer by the medical community finding solutions to some of the major life-shortening diseases such as dementia and cancer.

Investing will become internet driven: Crowdfunding is rapidly expanding – 22% of adults have tried it, and $35B of capital was raised by crowdfunding in 2015. It is likely that in 2016/2017 crowdfunding will be the source of more money than venture capital.

Insurance will go no-load: Low-expense variable annuities will become more attractive as investors look for guaranteed income sources in their longer retirements.

Jeff Benjamin of InvestmentNews has more details of  Bob’s session.

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Glass full

As I’ve said the conference was full of great presentations. Just the agenda gives you an idea of the depth of the conference. On the second day Philip Palaveev, of the Ensemble Practice gave the keynote focused on how to develop effectively a firm’s leadership.  (Jeff Benjamin also reported on Philip’s session.) And the twitter feed of the conference gives you a view of what made an impact with attendees.

Fiduciary Blues

Bob was inspired by his Nashville location to write a song. He sang this, strumming his silent, blow-up guitar and wearing a cowboy hat. There’s no better way to wrap up this post than to share with you his song: Fiduciary Blues.

I been in sales, doing pretty good

picked up commissions whenever I could. 

All the fine people I happen to see

were dire need of an indexed annuity.

And every single person I’d meet

Needed to buy them a non-traded REIT.

And then along came the Darned DOL

and my sales career, it went straight to hell.

Putting clients first is all over the news.

I got me a bad case of the fiduciary blues…

Yeah, I got me a bad case of the fiduciary blues…


My old lady done run off and left me

‘Cause I’m way way down on my GDC.

The commissions that used to fill my account

have dropped like a stone by a sizable amount.

Lately I’ve failed in my professional mission

to gather me up the maximum commission.

And it’s all because of that danged DOL

that sent my sales career straight down to hell.

Putting clients first is all over the news.

I got me a bad case of the fiduciary blues…

Yeah, I got me a bad case of them fiduciary blues…

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Raef Lee

Raef Lee

Raef Lee is the technology contributor for Practically Speaking and also serves as a managing director for the SEI Advisor Network.

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