Company Profiles

US Wealth Sector In Transition – Filling Gaps In Advisory Space

Tom Burroughes Group Editor June 30, 2023

US Wealth Sector In Transition – Filling Gaps In Advisory Space

The firm interviewed here by FWR argues that the independent advisor market, especially sub $500 million in AuM, is severely underserved from a support and overhead standpoint.

This news service carried a story in early May about the Atlanta-based firm Advisory Services Network, which has passed the milestone of $6 billion assets under management. It concentrates on that segment of the advisor marketplace with between $15 million and $300 million – those who can benefit from being an independent advisor but who are often overlooked by bigger players in the space.

Family Wealth Report spoke to Trey Prescott, director of business development at ASN.

FWR: What “problems” would ASN say it exists to solve, and why? 
Prescott: The independent advisor market, especially sub $500 million in AuM, is severely underserved from a support and overhead standpoint. Advisors often find themselves wanting to be entrepreneurial but don’t know where to go to get educated or how to launch and sustain that independence. That’s what Advisory Services Network looks to answer and at industry-leading costs and servicing no less.

How big a problem is it for advisors who are not able to get support from large firms and who find there’s a lack of service options? 
I spoke to 186 groups total last year in 2022…I am currently up to 170 new introductions in the year since January 1. I think those numbers around how many reps are looking for independence says it all in how unhappy they are with the larger firms run by private equity or ill-equipped boards. It’s a really great time to be a wealth advisor with the number of options and education now at their fingertips.

We have seen a big trend of advisors leaving banks/broker-dealers etc to set up on their own, and then find this is more challenging than they realized. Do you think the breakaway trend is slowing or speeding up?
Speeding up. It’s hard for any wealth advisor to not be impressed by how much independent reps are making, the ownership they’re acquiring, the services they’re able to provide to their clients, and ease of lifestyle once they leave those captive environments behind.

In which parts of the US do you operate? Where do you see growth and what areas are slower? 
Advisory Services Network is operating in 46 states with a wide swath on the East Coast and Mid-West area. Truthfully, I don’t see many areas slowing down. We are even operating in Hawaii and Alaska. It’s an exciting time to be an independent RIA supporting and working with the reps that we do.

The demise of Silicon Valley Bank and other sources of anxiety (higher rates, inflation, talent shortages, etc) – have they increased the trend of new firms setting up, or the opposite?
I bet one in four banks' reps are looking for a new method to service their business, whether it be a broker dealer, RIA, or just switching to a more established bank. SVB left a stench in the air and most took notice.

A big part of what shapes wealth management today is technology, and of course the new new thing is AI. How does your firm approach technology? Do we expect too much from tech as some sort of “magic bullet” for solving certain challenges? 
Rome wasn’t built in a day. Neither will AI. I think it’s exciting what it can bring to the table support-wise and to help advisors sharpen their tools in management, pitches, marketing, etc. But let’s not forget, this is a human and relationship business. I think most people like talking to other humans, especially when it comes to their current and future wealth. I’m excited to see how AI enhances those conversations and relationships.

What sort of changes would you most like to see come to pass in the US wealth sector over the next decade? 
Well, we are watching one: the rise of the RIA industry and entrepreneurial advisor. No longer do reps need the large bear and bull wirehouse with two assistants, an oak desk and mandatory 9.00 to 5.00 office hours. There are so many ways for advisors to blaze their own trail now, and they are. Advisory Services Network is fortunate enough to be one of those destinations to help educate, support, and enhance advisors’ independence on a daily basis.

We are also watching a wild transformation and seeing our industry get younger and learning from the older generation. I’ve seen great efforts here to really teach and educate those coming in instead of feeding them to the bears and bulls of our industry. I have been to a few conferences recently, and you can really feel a different type of energy in those rooms. It’s been great to be a part of and it is attracting a whole new range of people to this industry.

A multi-generational wealth transfer of many trillions of dollars is often talked about. Do you think the industry might be complacently assuming that there is a lot of wealth to play for? Where might there be a problem?
It is… and there’s also ways people are staying alive longer. There are foundations being created to offload a lot of this wealth led by Mr Buffet and Mr Gates. Some make it family and generational. Others give to their dog! It’ll happen, but it’s not going to be a giant waterfall. It’ll happen incrementally over time and to various entities all over the world. Seen above as billionaires creating their own quasi-governmental agencies within their respective foundations instead of donating to government. They think they can distribute resources in a more efficient manner. And I think that’s great â€“ it will end up driving 10 times more innovation and solutions for the world’s problems.

Our industry is getting younger, advisors are embracing new ways to support their business. I have no doubt we will be able to answer for any clients' needs coming down the road. Especially a money transfer of this magnitude.

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