Megan McMurry Comments in Midlands Business Journal on Trends in the Wealth Management Industry

By January 10, 2018Uncategorized


For a long time wealth management services have been used mainly by high net worth individuals.  The trend we are seeing more and more is: 1) younger people are engaging in financial planning, and 2) all clients, regardless of their net worth, are more interested in financial planning and wealth management as they near retirement.

A clear trend is technology.  The rise of technology means that clients have the ability to actively engage in their financial lives.  This means that today’s clients expect to access information and analysis about their finances and financial options digitally, online and mobile.  Digital tools allow clients to access and actively participate in the planning process.

More and more Internet connections are now made via mobile devices.  We expect this trend to continue.  As a result, it will be key for firms to offer user friendly digital planning tools.  Moving forward, successful firms will offer a combination of digital tools with face-to-face, individualized planning.

Look for advisers to move from a product and sales driven approach to focus more on the best interests of their clients.  Clients will find value in advisers who focus on providing trusted advice, rather than on selling products.  Eliminating conflicts of interests by focusing on the best interests of the client increases transparency and can provide more consistent and cost-effective solutions specifically designed to meet each client’s particular needs.

Although not as prevalent, socially responsible investing has become more common as younger generations acquire wealth.  These investors seek to align their investment strategies with their social values.  This can mean anything from excluding ethically questionable companies (i.e. “sin stocks” like alcohol or tobacco), or focusing on investments that create a positive social or environmental impact.


How has technology changed the way financial planning is handled by professionals and by those investing?

 Technology has allowed us to collect information quickly.  This in turn allows us to create or update our client’s financial plans on a more proactive basis which allows our clients to ask better questions, gain better understanding, and make more informed decisions.  All in all, it is a win-win situation.

Unintentional consequences related to the increase of technology arise as well.  The increased access to information allows us as professionals to be up to speed on current topics in a timelier manner.  It also provides a more efficient way for us to collaborate with our colleagues in other disciplines (i.e., attorneys, accountants, insurance professionals, etc.).

Technology has definitely changed the face of financial planning and wealth management and will continue to do so at an ever increasing pace.  The days of providing financial advice as a manual process are gone.  It’s no longer sufficient to expect clients to be satisfied with a quarterly cycle of paper reports and periodic recitations of static information.  Tools like cloud technologies and planning software are increasingly accepted and allow for wealth management to be applied in a manner so as to deliver more consistent, high-quality and cost-effective solutions that are specifically designed to meet each client’s unique needs.

As wealth transfers to more technology savvy investors the way wealth management services are delivered and consumed will change.  Expect to see an increase in digitally automated advice platforms with access to planning and trading applications through smartphones and other mobile devices.  Look for more opportunities for digital interaction between advisors and clients.  Tools like Email, text messaging and even social media for communication between clients and advisors will likely increase.  Video conferencing, web meetings, and interactive planning software will also become increasingly prevalent.


What can retirement investors do to make sure their retirement wealth is growing at the pace it should and that they are contributing what they need to without sacrificing too much on their lives right now?

This is the million dollar question!  Unfortunately there is no magical formula that we can use to calculate the perfect answer.  Investors need to take an active approach in managing their financial picture.  Each client’s road to retirement will be different as each client’s financial picture is different.  Our advice: work with your advisor to identify your specific priorities and goals and then develop and implement a strategy to help you achieve your objectives.


What are your best three tips for those prioritizing when it comes to investing in their financial future?

First and foremost, make it a point to periodically consult with your wealth, tax and legal advisors.  As your personal and financial situation changes, make sure you evaluate your financial strategy to ensure that your goals and desires are properly addressed.  Here are a couple of other thoughts:


Have a plan. Determine a strategic savings plan based on your objectives.  Make informed decisions on things like when to buy a house and how much to spend.  Set expectations about things like how much will you assist your children with college, weddings, down payments, etc.  Set realistic expectations for yourself as well when it comes to when you will retire and how much you will spend during retirement.


Maximize Retirement Savings. The ability to accumulate wealth on a tax-deferred basis is a powerful tool.  Take advantage of salary deferrals to 401(k) plans, company matches and automatic monthly withdrawals from a checking account.  Also consider fully utilizing other tax-advantaged retirement vehicles like IRAs and Roth IRAs.  Be sure to consult your tax and financial advisors about what retirement vehicles make sense for you.


Plan for the unexpected. Comprehensive financial planning doesn’t stop with your investments.  It also includes strategic planning.  What happens to your family if you pass away unexpectedly or if you suffer a medical emergency?  Will there be assets to take care of final expenses and liquidity to provide for family needs?  Have you thoughtfully provided for the care and well-being of minor children and other loved ones?  Have you reviewed and updated you will, titling of assets, and beneficiary designations to reflect your desires and family situation?  Be sure to consult with your professional advisors about what makes sense based on your specific situation.


Invest for the long-term. View successful investing as a marathon and not a sprint.  Don’t focus on the short-term or day-to-day ups and downs of the market.  Trying to time the market is generally a bad idea.  Understand what you are invested in and why.  If it doesn’t seem right then get a second opinion.  The bottom line: work with your advisors to develop a strategy, stick with it and stay diversified.


Anything else you would like to add to the story?

It’s no secret that the largest wealth transfer in history is imminent, if not currently underway.  Trillions in assets will be transferred over the next 10 to 30 years from the Greatest Generation to the Baby Boomers; and ultimately to Generation X and the Millennials.  The number of retirees in the US is expected to increase dramatically over the next decade and beyond.  This means a rapidly growing demand for specialized and comprehensive planning and wealth management services is on the horizon.

As the wealth transfer intensifies, wealth management firms must be cognizant of the changing needs and expectations of the next generation of wealth holders.  These investors desire additional investment options like real estate and global investments.  They also want self-directed, on-demand delivery of real-time information through intuitive, mobile and web-based experiences, coupled with comprehensive and transparent advice.  Bottom line: they want meaningful relationships with their advisors and they expect technology to make those relationships deeper and easier.

Successful firms will offer easy to use, fully digital services that allow clients unprecedented access to their personal financial data through on-demand, mobile friendly tools.  These firms will emphasize a broad platform of services with low fees and transparency, and actively seek to engage clients with efficient and functional interactive options and educational content combined with exceptional personalized service.


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