Euro technology WEALTH MANAGEMENT INNOVATORS: Meet 7 people shaking up recruiting, tech, and education in the $49 trillion business of managing money

Euro technology

euro technology wealth management innovators 2x1

For our inaugural list of wealth management innovators, we’ve pinpointed insiders shaking up recruitment, research, and digital advice and investing.
Wealthsimple; Charles Schwab; RBC Wealth Management; Shayanne Gal/Business Insider

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  • The wealth management industry’s evolution is dizzying.
  • Technology is changing the lives of advisers and clients while a new generation of investors grows accustomed to some firms’ dirt-cheap financial advice, trading, and investing options.
  • At the same time, much of the business remains deeply institutionalized. Armies of advisers at legacy wirehouses — massive, full-service broker-dealers — oversee trillions in wealth, and large shops can be slow to change. 
  • For Business Insider’s inaugural list of wealth management innovators, through interviews with industry insiders, analysts, and executives, we’ve pinpointed seven people shaking up recruitment, digital advice, and investing today.
  • Visit BI Prime for more stories.

We’ve called this moment for the wealth management industry “crowded, competitive, quickly aging,” and there’s a good reason for that.

A wave of financial advisers are expected to retire over the next five years, posing an urgent need for firms to build next-gen talent. And with profit margins thinning while commissions disappear from sight, analysts are renewing talk of consolidation among discount brokerages — some of which are also looking to beef up financial advice.

After all, customers have so many options from automated services and humans alike. All the while, many big banks are leaning more on wealth to produce steady revenues to help balance out more volatile businesses. 

McKinsey’s latest estimate pegs global wealth management assets at a record $49 trillion, a pile that’s grown steadily in the wake of the global financial crisis as markets have charged higher. 

For Business Insider’s inaugural list of wealth management innovators, through interviews with industry insiders, analysts, and executives, we’ve pinpointed seven people who have been busy shaking up recruitment, industry training, and fee structures. 

Euro technology Cynthia Loh, vice president of digital advice and innovation at Charles Schwab

euro technology Cynthia Loh is the vice president of digital advice and innovation at Charles Schwab.

Loh’s team was behind Schwab’s subscription pricing for its premium robo-adviser introduced earlier this year.
Charles Schwab

Cynthia Loh is playing a central role in setting the digital agenda inside of Charles Schwab.

“Defining the client experience” for Schwab’s robo-advisory and hybrid (a combination of both adviser and automation instructing your investing) offerings and planning services is written into Loh’s job description.

Schwab has made inroads this year to compete in an ever-crowded pool of digital wealth management and trading tools, notably the firm’s shift to a subscription model for its robo-adviser’s premium hybrid service and its move to eliminate online trading commissions for self-directed accounts.

The automated investing platforms under Loh have some $42 billion in total assets across 330,000 digital advice accounts, a pool that’s nearly doubled in two years under her watch.

Initially, introducing the new subscription pricing model earlier this year after about one year of fine-tuning was a “somewhat scary move,” Loh told Business Insider, considering the impact that new fee structures may have on revenue. Robos more typically charge a percentage of assets versus a fixed fee. 

Loh joined Charles Schwab in 2017 after spending two years at Betterment, where she built up the robo-adviser’s 401 (k) business offering. Prior to that, she worked at the start-up ZocDoc. 

Taking the leap from two younger digital firms to Schwab, a legacy player, came with an uncertain feeling over whether she was joining an institution that could embrace change. 

“I had a lot of apprehension, in some ways,” Loh said, adding that at the time she thought, “‘Schwab is saying that they’re very innovative. Are they, truly?’ Two years in, I can say the answer is absolutely yes.” 

When we asked Loh what excited her most in the future of digital wealth management and investing, she said what piqued her interest was “a little more subtle.” She thought of her own personal relationship with Amazon, which caters product recommendations for her.

“The type of personalization across product recommendations and preferences, or action items that I need to take — that type of thing is so great,” she said. “I’m excited for financial services to move in that direction as well.”

Euro technology Rudy Adler, co-founder, chief product officer, and chief marketing officer at Wealthsimple

euro technology Rudy Adler is the co-founder, chief product officer, and chief marketing officer at Wealthsimple.

Adler oversees the product and marketing operations at Wealthsimple, the robo-adviser founded in Canada.

Digital wealth entrants cropping up in recent years are adding new dimensions to the wealth management industry’s dynamics, and placing pressure on big incumbents to beef up client-facing tech to lure younger investors. 

Enter Wealthsimple, the Canada-based robo-adviser operating there, in the UK, and in the US, which is focusing on becoming “the most meaningful financial relationship in our clients’ life.” And the firm may acquire other firms along the way.

So says Rudy Adler, the robo’s chief of both product and marketing, who cofounded the company five years ago.

Last month, Wealthsimple acquired web-based tax preparation service SimpleTax to bulk up its financial tool offerings. It was the company’s first add-on to its robo-adviser, and one Adler said aligned with Wealthsimple’s goal to create “really simple, human products.” 

“We’re investing in things like brand, and we’re taking a really long-term approach to this,” Adler told Business Insider. “We’re looking strategically to buy firms that add to our mission.”

In March, Wealthsimple launched $0 digital trades for clients, which Adler said marked a first for the Canadian market. Online brokerages in recent weeks have scrambled to slash US trade commissions.

“The way we launched ‘Wealthsimple Trade’ was, we sent an email out to our clients: here are all the reasons not to do it,” he said, pointing to the benefits of investing in an “automated, diversified portfolio” that may outperform single-stock selections.

More than 175,000 users in Canada, the US, and the UK now manage $5 billion through Wealthsimple, which earlier this year received an investment of nearly $75 million — or $100 million Canadian dollars — from the digital arm of investments giant Allianz.

Around 80% of Wealthsimple’s clients are under the age of 45.

Euro technology Jessica Liberi, head of product at eMoney Advisor

euro technology Jessica Liberi is the head of product at eMoney Advisor.

Fidelity Investments acquired eMoney in 2015. The firm, where Liberi heads up the product team, provides wealth management and financial planning software.
eMoney Advisor

The word “holistic” is often tossed around in the wealth management business to describe an adviser or firm’s all-encompassing approach to managing clients’ wealth.

“Today’s clients want their private wealth to be viewed and managed holistically,” Ernst & Young consultants wrote last year, estimating wealth managers with “traditional business models will largely disappear from the market” as a direct result of that growing desire. 

The approach is not about solely picking investments that could appreciate over time, but overseeing clients’ wider financial planning goals, like retirement and savings. 

Still, head of product Jessica Liberi told us advisers’ planning aspect has long been central to eMoney, the Fidelity-owned wealth management and financial planning software provider.

“Planning in the wealth management industry as strictly offering investment advice has become more and more commoditized,” Liberi said in an interview, pointing to the rise of low-cost investment options like robo-advisers.

This month, after a year of work, a team Liberi oversees also debuted a self-directed financial planning mobile app temporarily called “Project Avocado” — an homage to the avocado toast that has become synonymous with millennials’ tastes — while they figure out a permanent name.

eMoney treats planning as its “cornerstone,” Liberi said. But she also wants to “drive the ecosystem around that,” with different adviser offerings that center on planning for clients.

In other words, “An experience that really looks at how a planning-led adviser operates both with their clients and within their firm.” 

eMoney oversees $2.7 trillion in aggregated assets across 16 million clients accounts, with some 65,000 financial representatives using the software; it has 67 enterprise clients.

“In general, what we are seeing is more and more wirehouses being open to the idea of bringing in third-party technology,” Liberi told us.

Prior to joining eMoney five years ago, Liberi spent more then a decade at the turn-key asset management giant SEI. 

Euro technology Kristen Kimmell, head of adviser recruiting and field marketing at RBC Wealth Management, US

euro technology Kristen Kimmel of RBC Wealth Management.

Under Kimmel’s watch, the wealth arm has doubled the number of women in branch leadership roles over the last two years.
RBC Wealth Management

Among the chief concerns hanging over the wealth management industry like a multi-trillion-dollar cloud: who is the next generation of financial advisers

Kristen Kimmell, the head of adviser recruiting and field marketing at $384 billion RBC Wealth Management US, is counted among those answering that question.

A firm veteran, Kimmell oversees efforts to recruit and diversify its talent pool while thinking about taking on younger advisers. She started stepping into the recruiting process about two years ago while she was the head of credit strategies and business development.

In that time, the wealth arm’s female financial adviser population has grown by 23%; it’s also doubled the number of women in branch leadership roles over the last two years.

The firm declined to break out the precise gender breakdown of its 2,000-strong US adviser force, but a spokesman said it continues to be in-line with industry averages in the upper-teens.

Under Kimmell’s watch, the firm has expanded its intern program, as well as its “ambassador” program, “allowing some of those former interns to go back into the colleges and universities that they’re attending, and being ambassadors of RBC.”

Six ambassadors participated in the program across a handful of schools during the 2018 to 2019 school year, with that number nearly doubling for the current school year.

“We know that maybe those schools don’t want to hear from somebody like me who looks like their mother, but they might be more interested in hearing it from somebody that looks like one of their peers,” she said, laughing.

At around one-sixth the size of major US wealth managers in both client assets and financial adviser force, RBC Wealth Management has also expanded its foothold in the US market over the past year.

It’s hired adviser teams in Nevada, Wisconsin, Connecticut, as well as a notable $90 million Minneapolis-based adviser team from Wells Fargo last December.

Euro technology Michael Finke, professor of wealth management and WMCP program director at the American College of Financial Services

euro technology Michael Finke at the American College of Financial Services

Michael Finke’s research focuses on areas including the value of financial advice and financial planning regulation.
The American College of Financial Services

Michael Finke wanted to “start over.”

Finke, a professor and program director at the American College of Financial Services, along with other co-creators of a wealth management designation launched there last year, was thinking about forming a curriculum beginning with clients’ “goals, instead of the portfolio.”

The non-profit school provides education for an alphabet soup of popular financial professional certifications like the Certified Financial Planner designation, and has educated some 200,000 people, or one in five US financial advisers. Of those who have taken the CFP exam in the US, slightly over 10% have gone through the College.

“The program is not so much talking about security selection,” he said in an interview, but rather teaching on how to piece together a wider strategy that suits a client. 

In many cases, he and colleagues from around the industry looked at “the approach to investments and thought, ‘That was out of order.’ We needed to start with the motivation to invest, and build an investment strategy around that objective.”

Finke’s research at the College focuses on areas including the value of financial advice and financial planning regulation. He’s well-known for his research on retirement, and how today’s macroeconomic environment will impact the next generation of workers.

“There is basically no good news when it comes to the cost of retirement,” he said, laughing, aside from the whole living-longer part.

But with assets so expensive, millennials are going to have to save more to achieve the same quality of life afforded to previous generations, he said.

“A lot of the research that we look into is: how does each of those factors impact what make people happier in retirement, and how can you put together a retirement plan with a client that is more likely to result in a successful retirement?” he told us.

The online program that Finke and around 25 other experts in the field formed is now known as the wealth management certified professional program, and those enrolled have a one-year window to complete the required coursework. More than 500 people have enrolled in the program.

Euro technology Jennifer MacPhee, national financial adviser development program performance executive at Merrill Lynch

euro technology Jennifer MacPhee

MacPhee also serves as Bank of America’s market president for the Albany and Hudson Valley region of New York.
Bank of America Merrill Lynch

Jennifer MacPhee has an outsized role to play these days at Merrill Lynch, among the largest US wealth managers. 

MacPhee is the national financial adviser development program performance executive there, aiming to improve trainee advisers’ graduation rates and shape new advisers at a do-or-die time for the broader industry.

Around one-third of US financial advisers are expected to have retired between 2014 and 2024, per Cerulli Associates data, with a mere 9% of advisers younger than 35 years old. And about three-quarters of trainees dropped out industry-wide in 2018, in-line with recent years. 

“There is a clientele that wants robo-advice, and there are always going to be clients who want a full-service, local financial adviser in their market,” MacPhee, who has been with Bank of America and its predecessors for nearly two decades, said in an interview. 

Merrill Lynch doesn’t disclose its graduation rates for its signature trainee program. But Andy Sieg, the head of Bank of America’s wealth arm, told us earlier this month that it’s “not as high as we would like.”

Business Insider was first to report that Merrill Lynch earlier this year bumped up its trainee financial advisers’ average starting salaries by about $10,000 to $65,000. 

At the same time, the firm installed 75 performance managers around the country to coach people in its financial adviser development program. The wealth unit had some 3,500 trainees in its program as of the third quarter.

MacPhee also serves as Bank of America’s market president for the Albany and Hudson Valley region of New York, getting out in the community and leading volunteer efforts for the firm.

We reported earlier this month that financial-advisers-in-training there who exit the trainee program without becoming full-fledged advisers are more commonly transitioning to different roles within the firm instead of leaving altogether.

That trend unfolding at Merrill Lynch underscores advisers’ evolving career paths, and how firms are adapting to that.

“We’ve placed hundreds of people in other roles in the company just this year, and it’s been great,” MacPhee told us. “This is talent that we sourced, and hired, and we want to keep at the company — and they’re happy that maybe they’re in a role that’s maybe a better fit.”  

Recruiters and experts describe to us an increasingly difficult environment for wealth advisers across the industry as the business of wealth management has become more competitive and crowded with countless digital self-directed options.

Euro technology Kevin Hughes, chief growth officer at MoneyGuidePro

euro technology Kevin Hughes, chief growth officer at MoneyGuidePro

Wealth management technology giant Envestnet earlier this year acquired PIETech, where Hughes oversees growth at its MoneyGuide unit.

For wealth managers and the wider industry, utilizing the best technology has become table-stakes. So the competition is fierce for the technology providers themselves to get inside firms and in front of clients and their advisers.

The team behind financial planning software provider MoneyGuide, created by PIETech — bought up by Envestnet seven months ago for $500 million — is acutely aware of that, and has been expanding under its new owner. That’s where Kevin Hughes comes in.

Hughes spearheads growth strategy at the financial planning software provider, playing a key role in developing a new tool launched earlier this year that allows clients to more closely examine milestones in their financial lives, like retirement and repaying college loans. 

The release underscores a sweeping trend in offering planning, more complete and “holistic” options to clients across the industry. 

Hughes, who joined the firm in 2007, told us in an interview that MoneyGuide has in some ways benefitted from a growing independent registered investment adviser (RIA) population in recent years. 

“That is where a lot of our integration strategy has truly paid off, because out in the independent space, advisers want to pick and choose whatever they want,” he said, referring to MoneyGuide’s ability to plug in to different customer relationship management (CRM) systems advisers can use. “They really want to be able to pick and choose their software.”

Industry data shows the number of independent advisers — relative to financial advisers at wirehouses and other large banks — is fast-growing.

Independent broker-dealers grew at a five-year compound annual growth rate (CAGR) of 11% through 2018, per research and consulting firm Cerulli Associate’s latest figures. Meanwhile retail bank, national, and regional broker-dealers all grew at a 9% CAGR in the same time; the major US wirehouses at just 6%.

MoneyGuide now has more than 100 enterprise clients and services some 110,000 advisers with around 5.5 million financial plans. In the 12 months through March, nearly two million such plans were created using MoneyGuide solutions. 

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