Will Advisors Get to The Promised Land?

Sue Bergin,Sue Bergin@smbergin

The maturation of the baby-boomer generation turned into a bit of a “promised land” for advisors.  New products, services, specialties and strategies were devised better to serve this massive market.  Advisors, along with the rest of the financial services industry, eagerly waited the fees, commissions, and product sales that would naturally flow as boomers prepared for, and transitioned to, retirement.  Everyone was ready, but will those who were promised ever even reach the so-called promised land?

In an article (subscription required) published in Financial Planning, “Advisor Threat? Wave of New Online Services Incoming”, Charles Paikert reports the influx of venture capital and clients flocking to the online advisory space. Many of the services who have staked a claim on the promised land are getting clients before advisors even get in the door.  Financial Guard is an example of a service offered directly to individual investors/employees.  It provides advice and recommendations to employees on their 401(k) portfolios.

10.30.13_Bergin_PromisedLandWhile these services are arguably tapping into a segmented market, it is important to note the increase in their popularity.  However great the rise, it does not diminish the experience of working directly with a financial advisor. Let’s take a look at some of the applications and services with a presence in the online world:

  • SigFig, a mobile application that tracks, organizes, and makes recommendations on financial assets garnered $50 billion in assets managed in just nine months after the app launched.[1]
  • In February 2013, online investment company Betterment had amassed $135 million in assets under management, investing on behalf of 30,000 users.[2]
  • Online wealth management firm Personal Capital amassed $120 million in assets under management, 75% of which came in the first quarter of 2013.  The firm continues to add $20 million to its platform monthly.[3]
  • Jemstep, which provides recommendations on retirement goals, has attracted 10,000 users and tracks approximately $2 billion in assets.  It has only been up and running since January 2013.

These new entrants are a prime example of what late British author and psychologist Havelock Ellis had to say about the promised land—It always lies on the other side of the wilderness.


[1] TechCrunch, “Financial Planning App SigFig Crosses $50B in Assets Managed Though the Platform,” 1/14/13

[2] Pandodaily, “With 135 million in Assets Under Management Betterment Lures Two Key Hires Awa From Traditional Finance.”  2/12/13

[3] Pandodaily, “Wealth management isn’t for old farts anymore.  Personal Capital uses technology and design to spice up a boring topic.”  4/11/13

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