The Enduring Advisory Firm

Chapter 1 Key Business Trends

Assumptions

Back in the day when individual investors were buying stocks and bonds instead of packaged solutions like mutual funds and ETFs, there was an investment analyst Mark knew in Seattle who was locally famous for his contrarian bets. His inclination was to look at companies currently out of favor with the investing public; assess their management, their culture, and their market; then take a long view of their business to determine whether it was an opportunity worth owning.

The stockbrokers who worked for this particular firm adored the man, whom we will call “Conan the Contrarian,” because his reverse approach always made them look good with their clients. Today, whenever we hear some industry pundit spout conventional wisdom, we try to channel Conan. We find it helpful to ask, “What would Conan do?” whenever we see our profession fleeing from or toward an idea.

Among the beliefs most often repeated are:

• Advisors are reducing their fees.
• Young employees lack a work ethic.
• Robos/digital platforms will make it difficult for advisors to compete.
• The industry will benefit from a huge generational transfer of wealth.

There are many more, of course, but we examine these questions in light of the facts and the reality on the ground. No doubt, our opinions will stir the ire of some but that’s exactly what Conan would do—cause people to challenge convention, then act with the wisdom they’ve gained from the analysis.

Advisors Are Reducing Their ...