Many advisors cultivate an image of luxury, wealth and sometimes even apathy, which is pushing clients away, according to Financial Advisor. The stereotype of the high-living advisor leaves the industry open to disruption, and advisors must stop promoting it, Nick Richtsmeier, of Trilogy Financial, tells the publication.
The Image of a Life of Luxury Doesn’t Fit with Modern America
Investors once equated good advice with affluence, but changing social trends mean it may now be associated with high fees and high-pressure sales tactics, Richtsmeier tells Financial Advisor. There is an “empathy gap” in the finance industry between those who need advice and those who give it, he tells the publication. While advisors typically earn $140,000 a year, the average household reports less than $100,000, and the financial industry is failing to address this growing divide, Richtsmeier tells Financial Advisor. Furthermore, the image of luxury runs contrary to the advice given to spend less and save more, he tells the publication.
Affluent Americans no longer need just advice since there is so much information available and many opportunities exist to invest independently, Richtsmeier tells Financial Advisor. This means advisors must make their value proposition very clear, he tells the publication. Affluent advisors once attracted clients with the promise of luxury, but clients actually need help with retirement, budgeting and the rising costs of healthcare and childcare, Richtsmeier tells Financial Advisor. The industry must decide whether it will be a small group serving the very wealthy, or a broader industry serving the needs of the general public, he tells the publication.
Advisors should reform their fees and services to offer ongoing care through a subscription, retainer or fee-for-service structure, Richtsmeier tells Financial Advisor. They should refocus client onboarding on disclosure and client experience, and provide a basic standard of care, he tells the publication. Advisors should also follow the advice they give, not just by investing in the portfolios they recommend, but in all aspects of their financial lives, Richtsmeier tells Financial Advisor.
