The Wealth Professional

I received a call a couple of weeks back from a reporter from the Wealth Professional.  It’s an online magazine for those in our industry.  I’m not sure where it came from but it started appearing in my inbox awhile back.  Their articles are informative but concise so I tend to peruse.
The reporter asked if I had a few minutes to answer a few questions about our changing industry and my current impressions.  Sure, why not?  I don’t work for a big partnership or corporation so I’m allowed to have an opinion.
Here’s some of the questions posed and my responses.  They’ve been edited for length.
Q. Are you concerned about the growth in the big banks and their continuing acquisitions of many wealth management firms and how does it affect you?  A. This is very much a business about relationships, so there will always be room for independent financial planners.  The bank earnings were good but a rising tide lifts all boats.  I see more concern for mid-sized firms where the big fish have traditionally eaten the smaller fish (published Sept 4).
Q. The current asset mix for the average financial planner across Canada is about $100,000 in cash and bond equivalents vs. $178,000 invested in equities.  Would your client’s mix be lower, higher or about the same and why?  About the same but no 2 clients are the same.   Those mostly in the stock market either have longer timeframes, are dollar cost averaging or don’t require any income for the foreseeable future.  Others, have more cash and equivalents because of the need for income, a future home or business purchase or don’t need the growth and wish to avoid the volatility of the markets.
Q. What is the biggest change you see affecting your industry?  The war over embedded compensation will end and mean that everyone will be on the same playing field.  For those of us that have already moved to transparency by working primarily with companies that disclose all fees in dollar terms it should actually be a good time.  For those that don’t, a little uncomfortable.
Q. What is the biggest challenge you face in your business?  Educating clients and simplifying the message.  Our industry promotes that everyone needs to do everything all at once.  Too many choices and too many details can lead to paralysis by analysis.  The process needs to start with a plan.