Produce in partnership with BT.
BT recently led a delegation of leading Australian financial advisers on a study tour in New York and Boston to learn more about the US market first-hand, hearing from leading advisers, investment managers and technology platforms.
One of the biggest takeaways from the tour, according to BT chief executive Matt Rady, is that simplicity is a powerful driver of business success.
While Australia’s financial services landscape is uniquely robust and comprehensive, the core of great advice remains the same – understanding your clients and meeting their needs and expectations,” he told Professional Planner reflecting on the insights gathered post-event.
“In the US, many firms are totally focused on serving a particular target market and becoming specialists.”
This is the 29th year that BT has organised an international study tour because it’s incredibly valuable for financial advisers and business leaders to step out of their “comfort zone” and be challenged to think strategically, Rady said.
“It’s easy to get into a routine of doing the same things day in and day out but taking time out to meet new people, engage with peers, and learn what’s going on in your industry and profession in other parts of the world brings fresh perspective,” he said.
This year, representatives from 12 leading Australian advisory firms participated in the tour.
Delegates heard from US financial services leaders including Savant Wealth Management managing partner Michelle Smith; UBS Financial Services private wealth adviser and wealth management managing director Hillary Cullen; and Saira Shariff, Americas wealth management lead at Accenture.
They also heard from leaders at Microsoft, Kasisto and Fidelity about how technology, including AI and machine learning, is transforming advice businesses, and some of the practical solutions US advisers are using to drive productivity, accelerate the advice process, and enhance the client experience.
According to Invest Blue managing director David Stephen, the tour reinforced the urgent need for advice businesses to get across AI technologies including the potential benefits and risks, and how AI can help firms drive efficiencies, manage risk and stay competitive.
“The biggest revelation for me was how much further ahead US firms are at using AI [than Australian firms] and how quickly technology is evolving,” he said.
“We’re using AI for file noting but that’s just the tip of the iceberg and we’re now looking at how we can use AI to support the construction of review packs, statements of advice and straight through processing, so that people aren’t spending a lot of time filling in forms.”
Stephen said that Invest Blue had adjusted its strategic plans and budgets, as a result of the tour, tripling its investment in AI and consolidating the group’s technology and data analytics team and innovation team, to form one department.
“Insights from the tour have shaped our annual planning and shifted our priorities,” he said.
“Our priorities would have been quite different had I not invested the time and money to go on the tour, learn from others and understand what best practice looks like in other parts of the world and among our local high performing peers.
“It is a big time commitment but it’s very valuable and rewarding to able to come back to work and share those learnings with the broader team.”
Carving out a specialist niche
In the New York office of national integrated advisory firm, Savant Wealth Management, Smith has focused her practice on working with women grappling with financial divorce matters.
Smith, who sold her business Source Financial Advisors to Savant in 2024, is a Certified Divorce Financial Analyst and helps divorcees navigate complex, sensitive and critical financial issues.
It’s an area of specialisation that Smith, the child of divorced parents, has a natural affiliation and spent three years mastering by attending divorce court and building relationships with divorce attorneys and family court judges. Over that time, she refreshed her value proposition and let go of clients who did not fit her description of ideal client.
“Specialising in divorce presents opportunity in the US because a significant number of marriages end in divorce,” Smith said.
“Every adviser wants to look after wealthy divorcees because we all want to be where there’s money in motion, but my strategy is to reach women before settlement.”
Smith, who spent the first 15 years of her career as a generalist inside a global investment bank, said specialisation has been a game changer for her. “I found myself exhausted and frustrated and realised that everyone doing really well was specialising in something, but I had nothing special so I was just networking like crazy with no real purpose,” she said.
“I couldn’t get sustainable organic growth but then several women with large divorce settlements came to see me, like three in two months, and when I spoke to them, I noticed a pattern. They didn’t know a lot about their financial position, including things like when their alimony and child support ended, and I realised my area of specialisation was staring me right in the face.”
While the size and scale of the US market, which has a population 13 times greater than Australia, makes specialisation a common business strategy, Smith said Australian advisers could also carve out a niche by identifying gaps in the market and focusing on the types of clients and people they like dealing with.
“Initially, I was hesitant to let go of clients who didn’t align to our evolving focus – I worried they were essential to keeping the business running, but once I made the shift to concentrate on the clients I could serve most meaningfully, everything started to come together,” Smith said.
“Every dollar I’ve invested [in my specialisation] and every client I had resign from to enable me to focus has been worth it.”
Multi-generational advice
When it comes to love, there are no guarantees but one certainty in life is death.
In the US, like many other Western nations, demographic changes are afoot.
According to Cerulli, baby boomers will pass on nearly US$84 trillion ($129 trillion) in the next 20 years.
This great wealth transfer is already happening one family at a time, with serious implications for advice businesses, particularly those that focus on serving retirees and pre-retirees.
But the death of a client doesn’t have to mean the total loss of connection to that client group and savvy US firms are treating the intergenerational transfer of wealth as an opportunity to build relationships with the beneficiaries of clients, including children, grandchildren and charities.
The US experience demonstrates that often times those beneficiaries don’t need comprehensive ongoing advice they just need a little bit of guidance, according to BT head of distribution Jason Brown.
“The tour really challenged our view on what advice is and isn’t,” he said.
“In the US, they’re more open and prepared to provide financial education and simple guidance, and they don’t have the same fear of crossing the line into personal advice. As a result, advisers are well positioned to capture opportunities arising from the intergenerational wealth transfer.”
| Actionable insights: Four practical, actionable insights emerged from the tour, according to BT head of distribution Jason Brown. |
| Hand off clients that no longer fit your firm’s description of ideal client. |
| Hire people with different skills, experiences and networks to ensure diversity of thought and ideas. |
| Nominate a team member to act as “technology lead” and drive the adoption of technology and AI. |
| Clean up your data and put it in a structured format so that can be used by AI and machine learning programs and tools. |
BT is also firmly of the belief that, irrespective of how much or how little wealth a person has, good advice is valuable and leads to improved outcomes.
“Traditionally, the advice and wealth management industry hasn’t actively engaged people with smaller account balances but in the US, and increasingly in Australia, there are innovative, simple and low-cost solutions that cater to that market, and that will help advisers to support younger clients,” Brown says.
According to Mohan Ramaswamy, partner at Work & Co, a division of Accenture USA, the great wealth transfer is also fuelling M&A activity, particularly among firms that specialise in high net worth (HNW) and ultra-high net worth (UHNW) individuals and families.
It is also driving the decision-making of advisory firms, particularly in terms of their IT strategy and spend.
“The generational transfer of wealth is informing a lot of adviser behaviour because we’re dealing with a new demographic of investor,” Ramaswamy said.
“They’re not just looking for 100 per cent digital solutions, as the trend of many financial players divesting robo-adviser arms underscores. They are looking for personalised advice on their terms. They want to interact with an adviser at specific times and for specific needs.”
For many people, their preferred method of communication is electronic. They prefer text messages and emails over phone calls, paper-based communications and face-to-face meetings, which is forcing advice businesses to change how they deliver advice and market their services.
For firms looking to provide multi-generational advice, a basic starting point is to ask existing and potential clients about their communications preferences, including frequency and areas of interest, Ramaswamy said, highlighting that this is standard practice in other industries and sectors.
Accenture USA’s Shariff said, advisory firms needed to establish relationships with consumers much earlier in their wealth journey.
“You can’t just show up at their door when they come into money,” she said.
“I don’t know if it’s related to the 2008 financial crisis but there is a deep distrust of Wall Street among younger investors, so they’re looking for alternative ways to get advice.
“They’re going to social media sites like Reddit for advice, which is fascinating, but it’s a very real thing for this digitally-native generation and advisory firms need to consider how they are going to react.”
Based on research on “investor journeys and experiences” conducted by Work & Co, many young people are self-directed investors and start investing via online trading platforms like Robin Hood.
“They don’t make money and then think, oh I’m done with that now and I’m going to see a big-name private bank,” Shariff said.
For young people who buy and sell shares – and see retail investing as a way to grow their wealth – educational resources, investment research and timely market commentary can be an avenue for advisory firms to add value not only for existing clients but their children and grandchildren.
This is particularly true in the current economic and political environment, Shariff said.
“Advice and guidance are more critical than ever because there is so much uncertainty and volatility,” she said.
“What’s happening in the economy and markets helps justify our role as advisers because if everything was predictable and smooth, our services wouldn’t be as critical.”
Advice to live a better life
During the tour, delegates heard from investment managers including Merrill, Wellington and BlackRock, who shared their views on the global economic outlook, geopolitics and the mega themes driving investment markets.
While the current economic and geopolitical environment is uncertain, particularly for retirees and pre-retirees who have limited capacity to ride out volatility and recoup any losses, the value of professional advice extends far beyond wealth accumulation and asset management.
For the team at Principle Wealth Partners, the ultimate goal is to help clients live a better life.
That singular objective shapes the group’s value proposition and decision making.
Robert Paolucci, the firm’s founder and CEO, recalled helping a client build a bunker after Russia’s invasion of Ukraine in 2022.
“We approach things very differently to your average RIA [registered investment adviser] and do everything to add value from advisory to estate planning to portfolio management, and that nuanced approach has to be built into the team,” he said.
“We had a client call us for help building a bunker and by the end of the day we had arranged meetings with three security companies that build bunkers around the world.”
Similarly, at Ritholtz Wealth Management, the group’s client value proposition is so much broader than managing money.
It also involves helping clients spend their money.
The firm’s founder and CEO, Barry Ritholtz, said the group’s “Swiss army knife” approach to client service, which basically means being a “utility planner”, morphed into specialty roles over time. This was only made possible due to the firm’s size and scale.
“We spend a lot of time helping our clients in their 50s and 60s understand the value of experiences and convincing them to spend their money and enjoy their life because they’ve got a tonne of money and they won’t run out,” he said.
“Some of our clients are having an outrageous amount of fun spending time taking their family on holidays and spending time together and that’s our value add.”
In the ultra-competitive private wealth space, this “nothing is too difficult approach” has set apart firms like Ritholtz Wealth Management and Principle Wealth Partners.
According to Matthew Barthel, executive editor of Dow Jones Wealth and Asset Management Group/Barron’s Magazine, the top 50 US private wealth teams collectively manage around US$1.12 trillion. Five years ago that number was closer to US$328 billion, demonstrating the astronomical increase in wealth among the country’s affluent families in a relatively short period of time.
In the top 50, average revenue per team is $45 million compared to around $19 million in 2020.
The top 50 are pulling away from the rest of the market due to their extraordinary scale, said Barthel.
“Growing revenue and profitability isn’t just a matter of getting billion-dollar clients, it’s about figuring out different ways to meet the needs of clients,” he said.
“We’re seeing firm expand the range of services they offer to enable them to charge higher fees.”
Estate planning is a logical and complementary adjunct for many firms, particularly in the context of the great wealth transfer.
Barthel observed that a growing number of firms are hiring estate planning specialists and offering “legacy planning”.
According to UBS Financial Services’s Cullen, the intergenerational wealth opportunity also required firms to rethink the composition of their workforce and potentially change their recruitment practices to hire more women and young people.
Cullen admitted that shift occurred naturally at UBS and was more by default than design.
“As we grew the team, we looked for like-minded people with similar values to us, and coincidently, those team members tended to be around 15 years younger,” she said.
This dynamic has been beneficial for UBS, which Cullen describes as a “multi-generational business”.
“We originally had a relationship with the parents, but then we also built relationships with children, and now we’re talking to grandchildren,” she said.
“At the same time, we’ve built a multi-generational team although that wasn’t intentional in the beginning. Once we saw it working, we realised that it was something we needed to continue doing.”
For Australian advisers looking to grow their business, the American experience has demonstrated the importance of specialisation, personalisation and the willingness to go the extra mile, BT’s Rady said.
“Wherever you go, whatever country you’re in, whether you work in a big firm or a boutique, there are opportunities for advisers who are good at what they do and focused on meeting the needs of their clients,” he said.
“Demand for advice is high in Australia but there are fewer advisers, which is a tailwind for firms looking to grow.”
