Highlights of 2014: From Online Alliances to Mega Deals
December 15, 2014 4:55 PM
Highlights of 2014: From Online Alliances to Mega Deals
From the breakthrough performance of 'robo advisors' to Schorsch's big grab, the advisory industry has seen major changes in 2014. Here's a look at the most important events and trends pushing the industry forward this year.
Rise of the Robos
Digital advisory firms gained undisputed traction with consumers in 2014 and have over $16 billion in assets, led by Wealthfront with $1.6 billion.
Impact: The gains -- and publicity -- garnered by 'robo-advisors' have forced traditional advisors to re-examine, and, increasingly, re-invent their own practices.
Impact: The gains -- and publicity -- garnered by 'robo-advisors' have forced traditional advisors to re-examine, and, increasingly, re-invent their own practices.
Digital Alliances Emerge
Led by Fidelity's breakthrough deal with Betterment, custodians and traditional advisory firms began to forge alliances with online companies for access to digital platforms.
Impact: The moves ramp up the financial advisory industry's digital evolution and buttress business prospects of digital firms.
Impact: The moves ramp up the financial advisory industry's digital evolution and buttress business prospects of digital firms.
Schwab's No Fee Robo Shocker
Charles Schwab announced a new online platform for consumers that won't have fees.
Impact: The new platform represents the ultimate commoditization of investment advice and a major competitive challenge to established 'robo advisors.'
Impact: The new platform represents the ultimate commoditization of investment advice and a major competitive challenge to established 'robo advisors.'
Boston Private Bags Banyan
Boston Private Bank & Trust acquired Banyan Partners -- the Florida RIA that Peter Raimondi grew to over $9 billion in assets in just six years -- for $60 million.
Impact: The year's biggest M&A deal demonstrated the appeal -- and value -- of a large and well-run RIA firm.
Impact: The year's biggest M&A deal demonstrated the appeal -- and value -- of a large and well-run RIA firm.
Schorsch Snaps Up Cetera
REIT King Nicholas Schorsch's IBD buying spree culminates in the purchase of Cetera Financial Group for $1.5 billion.
Impact: The deal makes Schorsch's IBD empire the second largest in the industry by advisor count.
Impact: The deal makes Schorsch's IBD empire the second largest in the industry by advisor count.
CPAs in the Spotlight
Financial advisors are increasingly looking to recruit accountants and partner with CPA firms, as highlighted by the BKD/Wolf merger that pushed BKD's wealth management assets past $2 billion.
Impact: Talent-starved advisory firms are tapping a new pipeline and adding more value for clients.
Impact: Talent-starved advisory firms are tapping a new pipeline and adding more value for clients.
M&A Spreads the Wealth
More middle-tier RIA firms with AUM under $500 million have been attracting attention as M&A targets.
Impact: Good news for well-run smaller firms who can attract buyers; bad news for poorly-run smaller firms who can't.
Impact: Good news for well-run smaller firms who can attract buyers; bad news for poorly-run smaller firms who can't.
Military Marching Orders
A Financial Planning story spotlights U.S. military policy that does not allow financial advisors to provide financial planning, but the newly passed 2016 spending bill authorizes a Pentagon study of financial stress on service members and how the military can ensure that soldiers get more effective planning advice.
Impact: The study is a much needed potential remedy to combat the military suicide epidemic that kills about 1.3 soldiers a day.
Impact: The study is a much needed potential remedy to combat the military suicide epidemic that kills about 1.3 soldiers a day.
Demographics Drive Change
Time and tides wait for no man: One-third of advisors are over 55, and Americans over the age of 65 will double in 15 years.
Impact: Succession planning and recruiting Gen X and Millennial advisors and clients have become clear-cut industry priorities.
Impact: Succession planning and recruiting Gen X and Millennial advisors and clients have become clear-cut industry priorities.
