Past, present, and the future of financial advice in the United States with Micheal Kitces


Although, robo-advisors grab most of the headlines they are just a tiny part of the financial advisory industry. The financial advisory business in the US has seen massive shifts from the era of brokers masquerading as advisors who used to charge $200 dollars a trade to the current avatar of the robos.

Here’s a fascinating conversation with Miceal Kitces in which he offers a sweeping look of the past, present, and the future of the financial advisory business in the US. To set the context Micheal talks about these shifts and what follows is just so damn enlightening

Some of the biggest changes include:

  1. Deregulation of trading fees by SEC and the demise of brokers/advisor
  2. The rise of savvy brokers like Charles Schwab and others
  3. The rising importance of mutual funds and the adoption of fees a % of AUM model
  4. The emergence of flat-fee advisory models
  5. Dawn of the robo advisors

He also talks about

  1. Emerging business models. The future of AUM and fee-only based models
  2. What will the future of financial advice look like
    3 The state of technologies and tools that serve the advisor community
  3. How advisors can and are differentiating themselves in an increasingly competitive market

and a whole lot more…

I’d highly recommend listening to the whole conversation to learn about all things financial advice.

Here’s another interesting graphic I had come across a week ago which seems pertinent to the topic at hand:

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