The Financial Services Industry as we have known it for over 250 years is officially dead! Since the first days under the buttonwood tree in lower Manhattan the industry has existed mainly to serve a small number of wealthy clients and to benefit the brokers, insiders and wheeler-dealers within the clubby fraternity called Wall Street. Those days are over...and thank goodness for it! Or as Mae West said..."Goodness ain't got nothin' to do with it." We've blundered, lied, and cheated ourselves right out of business and it's the best thing that could have happened to us and to our clients because finally we are going to be able to focus only on them!
This re-birth I'm talking about has been gestating for quite a while now. The changes in our industry started roughly two-decades ago when millions of new investors began to get interested in the markets. I would probably point to the start of IRAs as the moment when things began to shift...when investing left the realm of the privileged few and became a mass market activity. Over the past 27 years we've gradually, painfully begun to transition from a business driven by commissions, transactions and slick sales skills to a new profession built on trust, relationships and attentive service. The pain we are feeling now is the final delivery phase. Major firms are merging or going completely out of business. Hundreds of thousands of our colleagues are being laid off. Blood is being spilled on Wall Street in a very real way...and more may yet come. Out of all this anguish, however, is a bright new future.
The new Financial Services Industry will be simpler, cleaner and more responsive to clients. You see, the need for advice has not gone away. If anything it's even greater now than ever before. Americans are desperate for financial help but instead of fancy products and arcane investment crap that dazzles as it destroys assets...they need us to listen, tell them the whole truth and be a calming force when emotions run high. That's what the best advisors of the future will know how to do.
For some of you this may require new skills. We've wasted so much time, decades focused on the technology of money management and look where it's gotten us! Now lets spend some serious effort learning about people...how to help them think about their futures, how to guide them through life's most difficult decisions, many of which seem to involve money but even others that don't. Many of us have figured out the "financial" part of our title...now it's time to master the "advisor" part as well.
This new industry may not work for all of you. Some of us are mired in the old ways and we will cling to what we know even as the profession evolves beyond us. You still see it in the media. We are told that to succeed we all need to be hyper-active traders who can parse the second-by-second moves in a wildly gyrating market. Frankly, one of the best things the new Obama administration could do for investors is to outlaw CNBC, Bloomberg and Fox Business news. I'm not blaming the market's meltdown on the media...but I swear to you, in their own insideous way, these bastards are killing us. Their constant drumbeat of fear, controversy and sound-bite stupidity undermines the very fabric of investing. Don't get me started!
So as we begin this new year, let's look backward briefly to bid farewell to an old, worn out industry that collapsed under it's own greed and short-sightedness. Let it go! It's better off dead and we are well rid of it. The future belongs to the professionals who take the best care of their clients and to the companies that support and nurture their advisors in a non-sales, zero-hype, people-centered way. New metrics of success involving emotional maturity, client interviewing and psychological awareness may be needed...no problem. We will see new models for team-building, firm management, concept wholesaling, and training. Comp may go down across the board for a while until the new winners begin to differentiate themselves from the crowd. It's all part of the re-birth process...but the good news is that this baby is beautiful and it's all ours! I already love it.
Happy New Year!
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