Strategy

Schwab Conference: A “Defining Moment” For Financial Advisors

Charles Paikert, Contributing Editor, New York City, November 3, 2011

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Confidence was tempered by caution yesterday as thousands of independent investment advisors and wealth managers from around the US gathered in San Francisco for Charles Schwab & Co’s twentieth annual Impact conference.

Confidence was tempered by caution yesterday as thousands of independent investment advisors and wealth managers from around the US gathered in San Francisco for Charles Schwab & Co’s twentieth annual Impact conference.

Schwab executive vice president of advisor services Bernie Clark called it a “defining moment” for the industry, which he said was riding a wave of growth momentum and had the potential to double or triple in size. That continued growth, according to Clark, would be driven by women, wealth transfer and the next generation of clients.

Over one-third of women in the US are now actively managing money, Clark said, but only a fifth of them are using financial advisors. “We need to be more attentive,” he told a standing-room audience at the opening general session on Wednesday morning.

In addition, advisors are currently losing at least half of a client’s assets when wealth is transferred to a younger generation, Clark pointed out. Advisors have to transfer wealth more effectively to grow, he said.

Advisors also must accommodate the different styles and demands of young people who will be the next wave of clients, Clark said. The ability to deliver convenience and cutting-edge technology will be critical, he maintained, while adding that social media will play an increasingly important role in the advisor-client relationship.

Blair cites “uncertainty, instability and anxiety”

While advisors appeared upbeat, they were also clearly rattled by the sharp swings in the market triggered by the crisis in the eurozone. Indeed, keynote speaker Tony Blair, the former UK prime minister, captured that mood by describing the defining characteristics of the present era as “uncertainty, instability and anxiety.”

Geopolitics are shifting east, Blair said, noting the dramatic rise of China and India. China’s challenge, he declared, will be to sustain its explosive economic growth while remaining politically stable.

Reviving the economy and creating jobs was the West’s biggest challenge, Blair said. But in the aftermath of the financial crisis and the onset of new government regulations, he said governments “need to make business a partner” going forward and not focus on recriminations.

While Blair expressed sympathy with the Occupy Wall Street movement’s “anxiety” about inequality, he said their demands “would make problems worse.” For example, when asked about the vast disparity between the salaries of CEOs and workers in the US, Blair said a company’s shareholders’ should address the issue, not the government.

Blair also urged the audience not to be “defeatist” and give in to a sense that “the twentieth century belonged to us and maybe the twenty-first century will belong to someone else.” Western values will prevail, he predicted, and provide the right “framework” for political and economic action around the world.

 

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