What worries the best financial advisors?
That was the question posed Thursday during Charles Schwab’s Impact 2010 conference to a panel of advisors that included two executives from companies that earlier in the day had won Schwab’s Impact Award. The annual awards recognize work done to improve the industry through leadership, operations, technology and growth.
Panel members included Tim Kochis, the chairman of the board at Aspirant; Debra Wetherby, CEO of Wetherby Asset Management; Donald King, chief information officer at JMG Financial Group; and Keith McWilliams, CEO of Mt. Eden Investment Advisors. JMG and Mt. Eden were among the Impact Award winners.
As the panel was taking questions from the audience, one attendee asked each member to say what kept them up a night.
A serious market decline, was Kochis’ answer. “Client’s tolerance for something like that [happening again] is very little.”
Wetherby said she was worried about a prolonged period of low returns on investments. “What are the implications of us, our employees?” she asked. “What does it mean for our clients and their goals?” She said financial advisor today spend a lot of time and energy just to achieve a 4% return for their clients. If that’s the new norm, she said, “What does that mean for resetting expectations?”
McWilliams said things like the recent “flash crash” kept him awake at night, especially since most people don’t really understand market practices such as high-frequency trading and dark pools.
King, the technologist in the group, said he had a number of concerns. With the move from desktops to virtualized environments—and the increased adoption of tablets and other handhelds—firms need to answer a number of questions, such as whether to host applications on the desktop or in the cloud. If it’s the cloud, then there’s the issue of how to secure client data residing in outside the corporate boundaries.
And then, he said, there’s social media. “Will we deliver our services on social media?” he wondered. “I don’t know. But I don’t want to be behind.”
John McCormick is editorial director of SourceMedia's Investment Advisor Group. He can be reached at email@example.com.