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GUEST EXPERT: April Rudin on Finding Gold amid the Rubble in 2016

The Wealth Consultant welcomes April Rudin as the inaugural guest speaker for the blog and to get things kicked off for 2016. April has kindly offered to share her expert view on the challenges and opportunities of 2016 for the wealth management industry, both in the US and globally.

Over to April!

David

As with every New Year, 2016 will be defined by old challenges and trends that surfaced in years past, as well as by brand new ones. As founder and president of The Rudin Group, a marketing firm that specializes in integrated branding and communications strategies for financial services firms, I get an inside view on the forces shaping the wealth management industry every day as I bounce from industry events to client meetings to Skype calls and Google hangouts with people half way around the world. Industry observers and executives often ask me around this time of year what my conversations with a wide range of industry people reveal about where wealth management is headed. I don’t have a crystal ball, but I do get a good sense of what is driving firms and often also what bigger picture stuff some of them may be missing. Below, I’ve offered up answers to some of the most common questions I get. Enjoy and here’s to a successful 2016!

How would you describe the landscape of the wealth market in the United States?

In my conversations with friends and colleagues in the wealth management sector, I usually find them to be an optimistic group, and this year is no different. But there are challenges on the horizon: the landscape has never been more crowded, while product and service differentiation efforts are routinely undermined by generic messaging. Smart firms are making a concerted effort to build engagement among key audiences. They are looking at omni-channel distribution platforms to create uniform flow of information and a universal but distinct brand experience.

Back in 2009, the Harvard Business Review predicted that half of all U.S. private wealth would be in the hands of women by 2020.  Is the wealth management industry prepared?

It’s well documented that opportunities for women in the investment management space remain scarce. A lack of female perspectives clearly contributes to the tired and somewhat stereotypical attitudes apparent in marketing efforts. “Women” is not a meaningful niche when it comes to product strategy. It’s time for the advisory community to stop telling women that they can “have it all” and start listening to what they want specifically as individuals and for their families.

And what about millennials?

This demographic is still a puzzle to most, though not from a lack of effort. Countless surveys have yielded disparate results. Perhaps the one unifying trait is a desire to understand how investments relate to personal and financial goals. As much as regulatory and advocacy efforts, a new push for transparency is likely to raise awareness of suitability standards in relation to portfolio modeling.

What does the rise of the robo-advisers mean for wealth advisers?

Endless trade press coverage of the future of automated investing has conferred such cache on this buzzword that nearly every individual with a wind-up monkey toy can now claim to have perfected the concept. In fact, most solutions fall well short of the promise, and over the course of 2015, a counter-movement began to emerge. The theory is that millennial investors are not sold on automation but on customization. In addition, many established ultra-wealthy families, particularly those who are committed to socially responsible investing goals, are not ready to abandon the personal touch of a more hands-on approach.

Overall, is the market growing?

The space continues to expand for a variety of reasons, most notably the sheer number of wealthy individuals and families around the world, which grew in both numbers and assets in 2014. However, the wide variety of channels and business models often leaves ultra-wealthy families confused regarding the best providers and most competitive fee structures.

What segments are growing? Is there a market share shift?

All segments of the wealth management space are poised for continued growth. The challenges might be keeping all of the different wealth niches straight. In recent years, registered investment advisers (RIAs) have increasingly expanded to offer family office services, while family offices have partnered with RIAs as outsourced advisers. The concept underlying all this activity is the unified wealth solution. As imitators and incompetents join the universe of qualified providers, industry definitions will continue to be conflated in the minds of investors overwhelmed with appeals for allocations. For innovative firms, this is a chance to redefine existing terminology and reorganize offerings to deliver value.

Based on what you’ve heard and where you sit, what types of analytic tools do you think would be beneficial? What are the “critical” needs?

The newest tools that are gaining traction are those that provide news and data aggregation that can be distilled into actionable investment advice. Meanwhile, most firms are also exploring third-party or internally developed lead management/generation functionality. Digital media advertising enabled by Dodd-Frank has yet to capture the imaginations of most traditional firms. Such initiatives will be needed for ongoing engagement with target and niche demographics, a critical focus for 2016 and beyond.

 

April J. Rudin-headshot

April J. Rudin, founder and President of The Rudin Group, is an acclaimed financial services and wealth management sector marketing strategist with expertise in both digital and traditional media. April is a regularly featured source of expert commentary for trade and consumer publications and pens her own wealth management/fintech/financial services blogs for outlets such as Huffington Post, American Banker, CFA Enterprising Investor, Family Wealth Report, Fundfire, Investment News, Wealthmanagement.Com, and many other trade publications. Find her at www.therudingroup.com and @TheRudinGroup on Twitter.  

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