McKinsey Wealth Management Paper Arrives Too Late for Many Advisors

If you’re in the wealth management business, and you would like to stay in the business, you absolutely must read On the Cusp of Change: North American Wealth Management in 2030 by McKinsey & Co.   

Unfortunately for many firms, this paper comes much too late. These are the 3 trends McKinsey identified that are already killing advisors. If you’re not already working on them, it may be too late. 

• “Advisors will gradually shed their role as investment managers and become more like integrated… coaches who advise clients on… needs more broadly.” Investment focused advisors are done. Kaput. Finished. That is not new. The relative importance of investments has been shrinking for more than a decade with the advent of “robo” like solutions and the dramatically widespread use of index funds. If your sales pitch is, “I’m a smarter investor than the other guy,” I’m sorry, no you’re not. 
• “By 2030… successful wealth managers will develop services that help their clients dynamically monitor, adjust, and achieve their goals.” The best advisors have been using technology and additional services to simplify and improve their client's lives for years. This is a challenge and opportunity for many advisors who struggle to keep abreast of the latest fintech innovations and adjust their dated offering to what matters most to clients.  
• “Firms will need to be radically leaner than they are today and set a rising bar for operational excellence.” The struggle many advisors have growing from a lifestyle practice into an actual business with operational infrastructure is well documented. However, the penalty for not having a “real,” disciplined business has just been raised. Advisors who fail to adjust will lose–quickly.  

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