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Big Trends From Tiburon: Robo Advisors, DIY and Tech Changes

Online advisors, do-it-yourselfers and technology are expected to top the agenda at this week’s Tiburon CEO Summit in New York.


The rapidly emerging online distribution channel is attracting serious venture capital, notes Chip Roame, managing partner of Tiburon Strategic Advisors, in a preview of his bi-annual “state of the industry” keynote presentation released by the consulting and research firm.


"Do-it-yourself" firms that can "combine delivery mechanisms" will be a "smart bet" going forward, Roame says. Advisory industry executives indicated at the last CEO Summit, in San Francisco in fall 2013, that substantial investments will be flowing to Big Data and mobile technology this year.


Click through to see Roame’s top six trends in financial advisory services, or read more on his presentation.-- Charles Paikert


Click here to view the article on one page.

1. Do-It-Yourself Models Expand 1. Do-It-Yourself Models Expand

Discount brokerage firm channels are growing steadily, with assets under administration at $4.6 trillion in 2012.


Three drivers:


-- Comfort of younger generation with technology.


-- Loss of confidence in some financial advisors and their firms.


-- Amount of financial noise that technology can screen and organize.


Almost three-quarters of wealth investors use Facebook and almost one-third of wealthy investors use LinkedIn.

2. Consumer-Facing Websites, Round 2 2. Consumer-Facing Websites, Round 2

Advisors should consider three separate models in the competitive landscape:


-- Investment management: Financial Engines, Personal Capital, Betterment, WealthFront.


-- Financial planning & non-discretionary advice: Mint.com, LearnVest, Jemstep.


-- Online financial advisors: Edelman Online, Savant Capital Management, Searcy Financial Services.


Edelman Online, Morningstar and Personal Capital were voted the most impressive business-to-consumer models by attendees at the last Tiburon CEO Summit.

3. Role of Technology & Outsourcing 3. Role of Technology & Outsourcing

Big data and mobile technology are expected to be the technological issues with the greatest impact for advisory firms.


One-third of financial advisors believe that technology will be the primary force that drives industry innovation.

4. Retail Financial Advice 4. Retail Financial Advice

Wirehouses still dominate -- wirehouses still lead in AUM and administration -- but wirehouse advisors are looking more like RIAs.

5. Consumer Changes in Attitude & Behavior 5. Consumer Changes in Attitude & Behavior

The widening wealth gap is expected to lead to reduced consumer spending, some deleveraging, some increased savings, net flows out of equity mutual funds and renewed growth in the self-serve channels.


Do-it-yourself consumers are diversifying across providers -- a consumer trend that attendees at the last Tiburon CEO Summit expected would have the most impact on their businesses.

6. Wealth Concentration 6. Wealth Concentration

Consumer households with less than $500,000 investable assets make up 91% of all consumer households but control just 23% of financial assets.


The affluent market consists of just 8% of consumer households.

The rapidly emerging online distribution channel is attracting serious venture capital, while "do-it-yourself" firms with combined delivery mechanisms will be a "smart bet" going forward. See the list.

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