The Wealth Management Industry Has an Embarrassing Secret

By Gerard Michael via

Robos still specialize in simple portfolios, but that’s a marketing choice. 

It is now possible for robo firms to outperform industry-dominating “bulge bracket” firms in terms of the quality of their core portfolio management. Not better value for the money. Just flat out better.

This serves as both a threat and an opportunity. The threat, obviously, is that if you don’t up your portfolio management game, your business will be in trouble. Maybe you won’t lose your current clients, but you will struggle to attract the next generation.

The opportunity is that it is within your means to capture the clients that other firms are losing. The Chief Investment Officer of a regional bank shared with us that his firm never used to be able to compete with bulge bracket firms. In response, his firm adopted technology that automated customized, tax-sensitive rebalancing. “Now,” he says,“ we never lose in a head to head competition. Never. Not once.” He walks prospects through his firm’s ability to offer custom asset allocations, custom product choices, open architecture product selection, tax-sensitive transition and expert ongoing tax management. The perhaps surprising truth is that bulge bracket firms can’t come close.

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