The Future of Advisors: Who Will Be the Winners?

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By Mitchell H Caplan

The advisory industry has been evolving and two trends are clear: The future is fee-based—and advisers are tech-obsessed.

And where these two trends intersect, innovation happens. As the Department of Labor fiduciary ruling heightens the demand to serve your clients with greater transparency and greater value, we predict the next big debate in the years ahead will revolve around this fundamental question: How can technology help create value for your practice while also helping you serve your client’s best interest and maintain a fiduciary standard?

The fee-based future is coming. The advisory industry has been moving from commission-based sales to fee-based and fee-only advice, and the pace is accelerating. According to Cerulli, AUM managed by RIAs and fee-based advisers will increase more than 60 % from $4.1 trillion in 2015 to $6.6 trillion in 2019, and RIA and fee-based adviser headcount will expand from 59,000 to 67,000. As more advisers shift to the fee-based and fee-only model, an increasing number of manufacturers and distributors are developing and adopting no-load and fee-based products to fit the way they work.

Related: 17 Questions Answered About the DOL Fiduciary Rule Change

The tech obsession is growing. Studies such as Jefferson National’s Advisor Authority show that the most successful RIAs and fee-based advisers — those who earn more and manage more AUM — adopt technology into their practice at twice the rate of the typical adviser. They use more technology — and spend more on technology — to make their practice more seamless, more efficient and more scalable. For the most successful advisers, the only thing more expensive than adding technology is not adding technology.


Technology has tremendous power to disrupt, disintermediate and disaggregate at every point in the investing and advising process. As an advocate for innovation in the financial services industry, I’ve had a mission and a passion for harnessing emerging technology to create greater value for individual investors and for their advisers.

As I learned when we founded Telebank, the largest pure-play internet bank, and as I saw during my years running E*Trade, one of the most widely recognized online investing companies, technology helped millions of consumers build more wealth. And as their wealth grows, so does their need for guided advice.

Today, technology continues driving a secular transformation of the industry, shifting control from manufacturing and distribution directly into the hands of the consumer. It changes the way products are priced, bought and sold. It creates greater transparency. And as consumers continue to become better informed in an increasingly complex market, they not only seek guided advice, they seek unbiased advisers who put their best interest first.