Highlights From The Exclusive Tiburon CEO Summit

The semi-annual conference put on by Chip Roame and his consultancy firm Tiburon Strategic Advisors is famous for attracting a who's who of the industry's most prominent executives.

In addition to serious networking, one of the biggest draws of the Tiburon CEO Summit is Roame's keynote presentation with its in-depth overview of the industry, important trends and developments, as well as its granular data and charts.

The following slides highlight some of the most important takeaways from the CEO Summit, held last month in San Francisco. "There's lots changing in the industry," says Roame. "You'll see some key inflection points in the data."

Scroll below of click here to view this content as a slideshow.

1)      Good News for Wealth Managers

In what may be good news for advisors seeking wealthier clients, there are now more than 10 million consumer households with over $1 million in net worth, above the prior peak of 9.2 million households in 2007, according to Tiburon.

"Ten million households that have one million bucks – that is a common yardstick to which many advisors can relate," says Roame.

2)      Advisor Channel: Look Who's Number One

RIAs get most of the attention these days, but the channel that includes insurance agencies, brokers and producer groups (such as M Financial Group) has the most financial advisors, according to Tiburon. Independent broker-dealers and wirehouses round out the top three.

"But the growth is all going to the fee-based financial advisors and dually registered advisors," Roame notes.

3)      IDBS: Not Even Close

LPL Financial has twice as many independent reps as Ameriprise Financial and RCS Securities. Despite the wide gap, however, LPL is under pressure from an activist investor to boost its lagging stock price.

Roame believes LPL will rise to the challenge. "LPL is an impressive franchise and likely will recover well," he predicts.

4)      Custodians: Schwab Still On Top

Schwab remains king of the RIA hill, but TD Ameritrade is coming on fast, displaying impressive growth rates for new advisors and client asset growth. The Jersey City, N.J.-based custodian brought in a record $63 billion in net new assets for the fiscal year ended September 30, a 10% annualized growth rate.

5)      Rise of the Robos

RIAs offering automated investing and advice services have nearly doubled in assets under management in four years.

"It's likely to grow far more but many of the robos will disappear," according to Roame. "We expect those robos that serve defined contribution plans to be most successful, followed by the discount brokerage firms and mutual fund companies."

6)      Robo VC Sweepstakes: Three-Horse Race

Wealthfront, Betterment and Personal Capital are the clear favorites of Silicon Valley and Wall Street VC firms.

Each has a distinctive strategy – Wealthfront is focusing on the online consumer market, Betterment targets consumers but also operates in the B-to-B market with a white label service for advisors, while Personal Capital charges higher fees and supplements its digital service with human advisors.

7)      M&A: Edelman Is Back

Advisor/entrepreneur/author/radio talk show host Ric Edelman's latest deal (he sold Edelman Financial Services the first time 10 years ago) leads the pack so far this year.

Edelman sold a majority stake in his advisory firm to private equity company Hellman & Friedman last month for a reported $800 million. Typically there are only about 10 M&A deals each year for RIA firms with $1 billion or more in AUM, but this year there have already been  at least 20 such transactions.

Register or login for access to this item and much more

All Financial Planning content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access