Being on the Right Side of History

Written by: Jeff Thomas

The wealth management industry is having a reckoning right now.  The broker-dealer’s conflicts of interest are now obvious.  Consumers are demanding transparency.  However, the largest industry players continue to lobby to muddy the waters of disclosure.

They are on the wrong side of history.

Twenty years from now, everyone will look back and ask why they were fighting the inevitable trend of full-disclosure.

It’s very simple.  Consumers want complete representation from their financial advisors.  The large institutions want to slow that trend because they have a giant legacy business of pushing products on the consumer and would have to give up billions in revenue to fit the transparent model consumers now demand.  They are going to be dragged kicking and screaming into doing the right thing.

Meanwhile, many of the largest advisory teams in the nation are leaving the large firms and starting their own companies to solely represent the client they serve, not the name on their business card.  These firms are called Registered Investment Advisors (RIAs).  When you hear of a firm being “RIA-only” it means they made a choice to only represent their clients, and are not “registered representatives” of a brokerage or insurance firm.

RIA-only firms are growing quickly.  According to Cerulli Associates, RIA-only firms’ market share of the wealth management business was up over 50% from 2007 to 2017.

Like any movement, the first movers make sacrifices to do the right thing.  The teams that are leaving the large, conflicted firms often give up significant revenue in order to operate in a pure client-centric relationship.

However, that short-term loss will likely be more than made up for by the long-term gain of being on the right side of history.  



Jeff Thomas is the Founder/CEO of Archetype Wealth Partners. He has assembled an amazing team to provide an open architecture, fee-only (fiduciary) platform that offers a wide variety of investment choice to clients. Archetype exists to help families thrive across generations.

Disclaimer: Our intent in providing this material is purely for informational purposes, as of the date hereof, and may be subject to change without notice. This article does not intend to constitute accounting, legal, tax, or other professional advice. Visitors and readers should not act upon the content or information found here without first seeking appropriate advice from a trusted accountant, financial planner, lawyer or other professional.

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