Serving a larger client base through wealthtech
For wealth management to achieve sustainable organic growth, the industry needs to boost the number of households served by financial advisors and firms, consultant Gavin Spitzner says in an episode of Financial Planning’s Invest Podcast.
Inorganic means like recruiting and M&A, along with the bull market in equities for most of the past decade, have driven most of the growth of incumbent broker-dealers, banks, custodians and other firms doing business in the industry, according to Spitzner, the president of Wealth Consulting Partners. Throughout his 25-year tenure, he's worked in nearly every phase of the business.
Spitzner launched his consulting firm in 2015 after tenures at firms like Envestnet and Prudential over a career spanning areas including practice management, professional development, software sales and marketing. He now assists firms as a strategic advisor overseeing changes to technology, target market segments and other aspects of the companies.
The decisions can be painful ones for incumbent firms that aren't generating much organic growth or are using archaic technology platforms, says Spitzner. He argues that firms aiming to expand for the future need to find unserved — or underserved — clients.
“I’m driven by what can we do from a business model standpoint, from a technology standpoint, to create more ability to serve more people however they want to be served," Spitzner says. "Whether that’s through a direct relationship with an advisor who can have the capacity through technology to actually spend time growing their business, serving more clients across, not just high-net-worth and ultrahigh-net-worth [clients], but mass-affluent clients that often need the advice the most and do that profitably; down to truly digital-first, digitally native capabilities that a certain segment of clients — especially younger, but not just younger — want to engage with.”