Future of Financial Services

This week I was on the road spending time with industry leaders engaged in the topic of the future of the Financial Services industry. Disruption is a major theme in this Digital Age in which we live. Our industry has been disrupted as much as any. Fin-Tech (Financial Technology) firms have been disrupting for decades. That won’t change. In fact, the disruption has accelerated.

Charles Schwab, the man, was an early disruptor when he brought Wall Street to Main Street, championing the individual investor. Back then, broker commissions were as high as $500 per trade and mostly manually placed by telephone. Today they’re primarily electronically executed and the cost is zero.

There’s been a ton of M&A of late. The biggest change in our world will be the ultimate combining of Schwab and TD Ameritrade. The mega merger is still on track for full integration by the Summer of 2023. Mergers are nothing new to TD, as we lived through the integration of TD Waterhouse and Ameritrade in 2005. Schwab hired Tom Bradley, TD’s former RIA (Registered Investment Advisor) head, 2 years ago to help smooth the transition. It was a smart and savvy move that brought confidence to some cautious and reluctant firms that live exclusively in the TD world. Since we have worked with both Schwab and TD for years, our eyes are wide open and we feel very comfortable with the path ahead. We are positioned and ready.

Speaking of disruption and innovation, cryptocurrencies keep gaining traction and values have soared. Apple CEO Tim Cook grabbed headlines this week stating that he owns some Bitcoin personally but has no plans for the company to swap any of its cash for crypto anytime soon.

Cryptocurrencies are the new Wild West for investors. Investor frenzy is nothing new. From tulips to Dot-coms, history has recorded bouts of hysteria and excitement that almost always leads to excess. But the foundation is generally solid with legitimate opportunity. The Market is a living, breathing animal. It’s an evolutionary beast that never sleeps. It’s a fascinating time to be an investor. Investing always requires a strategic plan, with strict discipline. That approach is time-tested and true.

The Global Pandemic triggered a Digital Transformation. It’s all about communication and productivity. These were irreversible trends already in place. They merely got accelerated by Covid. The “stay at home” world has placed technology as an essential communication tool for pretty much every industry. Geography is less of a barrier. But personalization still matters, big time. For our industry, the importance of knowing each client and being flexible has never been more important.

Here’s the deal: The more involved we become with technology, the more we crave personal interaction. Humans are social creatures. 20 months into the pandemic, people have gotten Zoomed out. The virtual world is no substitute for the real world. It’s a tool. It’s an important tool. The hybrid model, balancing out the physical and virtual worlds, seems so likely to stick. We’ve embraced it. The hybrid model is our present and our future.

Women are playing an expanded role in the Financial Services industry. That’s a really good thing. The independent woman is the fastest-growing segment of the industry. There’s a long way to go still. We are leading the charge. 2/3 of the Bedell Frazier Team are women. I am just so proud of that.

Millennials are now the largest generation in America, outnumbering Baby Boomers. This is the generation born between 1980 and 1995. As the oldest of the Millennial generation enter their 40s, they have begun seeking financial advice. For those of us that have already been there, hitting age 40 often ushers in an era of critical life decisions. Responsibilities continue to increase. Time is still on your side, but the clock is definitely ticking.

Having gone through 2 substantial recessions, studies show that anxiety already runs pretty high among this group of investors. What we are finding is, Millennial needs and wants are much different from those of previous generations. These are not your parents’ or grandparents’ 30-somethings.

Millennials want information to be delivered to them on a regular basis. That’s what recent studies have shown. They want their advisors to communicate with them on social and digital platforms and prefer a more informal style. They want their advisors not just to guide them on financial decisions, but also on critical life decisions.

For a generation who were raised in the early days of the Digital Age, the lines between the physical and digital worlds have increasingly been blurred. Technological advancements, like data analytics and artificial intelligence, are increasingly playing a role in the Financial Services industry by detecting patterns and predicting major life events. These include marriage, a home purchase and starting a family, among others. The thinking is that these data points will trigger more meaningful and highly personalized conversations at key decision points. Like so much in today’s automated world, there is a serious creepy factor when it comes to privacy. Security is so critical and something we take very seriously. In the Digital Age, data is the prize and the cost is our privacy.

Bedell Frazier is in the Business of Life. I came up with that concept a few years ago because I didn’t feel that the customary industry terms of Financial Advisor or Wealth Management captured who we are or what we do. We are strategists, we are planners and most importantly, we are doers. More than advisors are we; Financial First Responders, Financial Physicians, Life Partners – that’s our aim. That’s our commitment.

Our professional purpose is to help people set goals and map out plans for achievement. And then we execute them, together. The goals vary from person to person. Retirement is the most common. Raising a family is a close second. Educating kids and grandkids is part of those plans.

Equally important to the plans to get there are the strategies to implement once you’re there. It’s ongoing. Living in retirement requires the same attention as planning to get there. There are so many roads to retirement. It’s such a personal experience. The sooner you get started, the greater the probability of success. And as my favorite philosopher Yogi Berra famously said, “if you don’t know where you’re going, you might wind up someplace else.” The planning doesn’t stop until the plan ends. Equally important, there’s no such thing as one-size-fits-all at Bedell Frazier.

Communication is so important to us. Messaging is everything. As we navigate through the various challenges together, it’s essential that we maintain a clear and consistent dialogue. It’s essential in any strategic relationship to share information with high frequency. We take pride in our deliverables.

Covering economics, earnings and interest rates is some seemingly boring stuff. ‘Tis true. But it’s really important. To that end, we go to great lengths to try to make our messaging informative, interesting, educational and perhaps even a little entertaining. I was recently told by a trusted source named Angela, who is very wise in the industry, that Bedell Frazier set a high bar for boring. I’ll definitely take that praise with a commitment to keep raising that bar.

Most firms in our industry communicate maybe monthly but mostly quarterly. We chose weekly and as the pandemic set in, daily. Dealing with adversity is one of our greatest strengths. Our goal is to be a stable voice of logic and reason. As investment professionals, we never have all the answers. But we accumulate facts and study signals to make decisions. And we make sure our clients are informed in order to participate in the process to the extent they wish. That won’t change. We sure have been through a lot together over the years. The messaging will continue to evolve. The Bedell Frazier story is an evolutionary one itself.

I have never been more optimistic for the future of the Registered Investment Advisor industry. It’s a special breed. We are fiduciaries. We are held to the highest standards in the industry. It’s clients first. Bedell Frazier is built to last. We are clients first forever. Our Team is focused on today with visions of a better tomorrow. We are in the Business of Life, indeed.

I will leave you with some wise words from a very wise man.

“Not everything that can be counted counts, and not everything that counts can be counted.” – Albert Einstein

Have a nice weekend. We’ll be back, dark and early on Monday.


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