My Fears of Change (or the Lack Thereof)


With the U.S. Department of Labor’s rule still fresh in our minds, it’s hard to think much beyond the changes our industry will face in the next 12 to 18 months. But, if we step back and look at the bigger picture, we have more important challenges ahead. We might be afraid of change, but I’m more worried about what will happen if we if don’t. 


Lack of Advisors

In the United States today, we have only one financial professional for every 1,000 citizens. And, we have the largest generations of Americans leaving the workforce for retirement, relying on the assets they’ve have saved for the rest of their lives. No way can a single professional provide the necessary advice to 1,000 people, especially with a low-interest environment, unstable global economy and the most complex tax coded in history. We must develop a better system to recruit, invest in, and train new professionals in our industry.  


Commoditization of Technology

Technology can do great things for our industry, but it can also do some damage if we aren’t careful. In his book, “End of Jobs,” Taylor Pearson discusses how just a little over a decade ago, Loudcloud, an early cloud hosting service, hosted applications for $150,000 a month. Today, those same hosting services cost $1,500 a month.1 

With today’s appeal of the robo-advisor, I expect the same revenue compression over the next decade in our industry. Our current climate is to look for the least expensive way to provide a service instead of providing a service with the most value. Asset allocation can be found everywhere; however, managing the sequence of returns makes all the difference in whether a client runs out of money. We must redefine ourselves from asset managers to client-focused advisors – and customize it with scale.  


Changes in Income

Pearson also points out that the American population faces a major shift in income generation – and he’s not referencing the loss of earned income by voluntary retirement. Instead, more Americans will turn to entrepreneurial opportunities in the future. Because between 1948 and 2000, jobs grew 1.7 times faster than our population – since the turn of the century, however, our population has grown 2.4 times faster than jobs. 

Without the retirement plans of “normal” employment, we must help our clients find vehicles to meet long-term savings demands and educate them on the impact of self-employment versus paid wages. Our clients started the mind shift, so our industry must adapt to keep up.  


Moving Sooner than Later

It’s been said many times, but it’s worth repeating: We have to do a better job working on our business instead of in our business. It’s is time for us to make a fundamental shift, which requires thought and decisions on how we will capture market share in a largely homogenous product set.

I challenge everyone to critically think about their business first thing, every day. In his book, “Triggers,” Marshall Goldsmith discusses a 2011 study that followed 1,100 decisions of an Israeli parole board. Seventy percent of the prisoners were granted parole when they appeared before the board in the morning, while only 10 percent received parole when they appeared in the afternoon. By human nature, we get fatigued and worn down by making decisions throughout the day, and we default to status quo. My suspicion is that financial professionals end up with the status quo simply because we don’t pay attention to our business until after we are too tired to think about our future. 

We face a multitude of challenges in the next 12-18 months. All the while, the American population moves toward the need for more advice, more education, and a renewed industry full of fresh ideas and deeper client relationships – all energized by new technologies. We need to take time to think about how we exceed customer expectations – not by rates of return, but by experience. 


Winning Strategy

Cost-conscious prospects looking for more advice create opportunities for the right business model. Have you spent enough time on your business so you can focus on its biggest assets – your clients?


Learn More

“End of Jobs: Money, Meaning and Freedom Without 9-to-5,” by Taylor Pearson: 

“Triggers: Creating Behavior that Lasts – Becoming The Person You Want To Be,” by Marshall Goldsmith:


About the Author

Mike McGlothlin is the Executive Vice President of Annuities at Ash Brokerage. His strength is helping advisors become more efficient and effective in their businesses. He and his team provide income-planning solutions focused on longevity and tax efficiency, and they also assist advisors with entering defined-benefit termination planning and structured settlement markets. 

Annutities DOL Department of Labor Change