The Wealth Management Business Is Growing Fast. Here Are the Speed Bumps.
4 min
For years, the wealth management industry has been rising on a geyser of assets under management. From an estimated $27 trillion in 2018, assets are estimated at $64 trillion today and are projected by Statista Market Insights to hit $87 trillion in 2028.
But fast-growing industries face challenges. For this week’s Big Q , we asked industry professionals to identify some of them. The question: What are the biggest challenges facing the wealth management industry and why are they so important?
Alan Moore, CEO, XY Planning Network and AdvicePay: A major change is the shift from product sales to advice. It means you have to actually train on finances and advice, not just learn sales. It’s creating a spike in demand for CFP professionals—we just had the largest cycle of exam takers in the past 12 months—after the CFP has been around for 50 years. And there’s a shortage of talent who can handle being advisors.
Product organizations hired for salespeople for years and now have to adapt to hiring advice givers. It’s causing products to be reinvented with no-commission alternatives. It’s leading people to switch channels and break away—because broker-dealers are technically securities product/sales distribution platforms, and you don’t need one if you’re in the advice business.
The shift to advice has been under way for over 30 or 40 years. But the vast majority of the industry, probably 90%-plus, is still built around a product distribution business model, not around advice. You see this in recruitment efforts, where folks are being recruited into sales roles and you lose 90% to 95% of your new hires because they don’t make the cut. We don’t have 90% or 95% turnover on new hires into advice roles, but people who want to work in the advice industry are very different from the folks who want to do sales.
Ryan Parker, CEO, EP Wealth Advisors: My one-word answer as far as the biggest challenge is “people.” This has always been a talent industry. It’s about people serving people. But increasingly, the talent opportunity and challenge is getting more and more complicated and nuanced. To serve clients, it’s no longer sufficient to just have the best advisors. Plus, the best advisors are increasingly difficult to attract and to develop and to cultivate. That’s either because they’re happy with where they are, or once they get in a good situation, they probably do serve clients well by staying the course.
The talent that surrounds the client and enables the advisor, that’s where the war is really heating up. And it’s not just the financial planning or tax or estate, but it’s the technical talent—people who understand and can deploy the different technologies that are inside our industry and increasingly ubiquitous across industries. I really think that whatever your time horizon is, the ability to attract, develop, align, and then reward and retain the best talent throughout the organization is critical.
I think it starts with the front lines who are interfacing with clients every day, but it goes now to every single position. That is what’s going to separate those who are able to build something of scale and significance over time. Clients are going to go where the best talent resides. So to compete, I’m going to go for the best people.
Daniel Burke, founding partner, investment management, Callan Family Office: One of the biggest challenges facing the industry is managing the complexity and volume of all clients’ personal data.
An ultrahigh net worth family or family office often has data everywhere—siloed at multiple providers and custodians, old tax returns, et cetera. As advisors, we have to help them manage this data in order to provide good advice and execute across their full balance sheet. We’re investing more and more in data processes, data quality, and technology to help families make decisions across a clean, comprehensive set of data.
The challenge is that even if we invest to collect all of that data, the systems downstream, the third-party applications, CRMs, trading systems, reporting systems, and financial planning software, this whole ecosystem of apps and fintech investments, can’t necessarily work with all that data. The fact that so many of the technology players are focused on solving for the mass affluent leaves a real gap in the process for the ultrahigh net worth. And that’s a challenge for the industry to try to solve.
Mitch Avnet, CEO and managing partner, Compliance Risk Concepts: We provide outsourced, ongoing compliance support to asset management firms and independent investment advisors, and to the institutional folks and to broker dealers as well. To me the challenge is figuring out how to embrace new technology concepts out there, whether it’s AI, crypto, or anything else coming on the horizon Advisors have to really be thoughtful, careful and pragmatic in terms of how they leg into this stuff.
One of the biggest concerns I think any regulator or compliance officer would have when a firm gets into the world of what I call one-offs, like AI or crypto, is having the operational infrastructure expertise or capabilities to support it in place.
It’s great to say that you’re going to embrace AI. But how is that built into your overall model, specific to portfolio management? Are you just turning over the keys to a machine, or are you using it as a tool in how your team does their overall analysis and how they implement strategies? I think early entrants can get caught with their pants down when there’s a flight to a new, shiny object, if they haven’t really thought about what the potential ramifications are if something goes wrong.
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The lunar flyby would be the deepest humans have traveled in space in decades.
4 min
It’s go time for the highest-stakes mission at NASA in more than 50 years.
On April 1, the agency is set to launch four astronauts around the moon, the deepest human spaceflight since the final Apollo lunar landing in 1972.
The launch window for Artemis II , as the mission is called, opens at 6:24 p.m. ET.
National Aeronautics and Space Administration teams have been preparing the vehicles to depart from Florida’s Kennedy Space Center on the planned roughly 10-day trip. Crew members have trained for years for this moment.
Reid Wiseman, the NASA astronaut serving as mission commander, said he doesn’t fear taking the voyage. A widower, he does worry at times about what he is putting his daughters through.
“I could have a very comfortable life for them,” Wiseman said in an interview last September.
“But I’m also a human, and I see the spirit in their eyes that is burning in my soul too. And so we’ve just got to never stop going.”
Wiseman’s crewmates on Artemis II are NASA’s Victor Glover and Christina Koch, as well as Canadian Space Agency astronaut Jeremy Hansen.
What are the goals for Artemis II?
The biggest one: Safely fly the crew on vehicles that have never carried astronauts before.
The towering Space Launch System rocket has the job of lofting a vehicle called Orion into space and on its way to the moon.
Orion is designed to carry the crew around the moon and back. Myriad systems on the ship—life support, communications, navigation—will be tested with the astronauts on board.
SLS and Orion don’t have much flight experience. The vehicles last flew in 2022, when the agency completed its uncrewed Artemis I mission .
How is the mission expected to unfold?
Artemis II will begin when SLS takes off from a launchpad in Florida with Orion stacked on top of it.
The so-called upper stage of SLS will later separate from the main part of the rocket with Orion attached, and use its engine to set up the latter vehicle for a push to the moon.
After Orion separates from the upper stage, it will conduct what is called a translunar injection—the engine firing that commits Orion to soaring out to the moon. It will fly to the moon over the course of a few days and travel around its far side.
Orion will face a tough return home after speeding through space. As it hits Earth’s atmosphere, Orion will be flying at 25,000 miles an hour and face temperatures of 5,000 degrees as it slows down. The capsule is designed to land under parachutes in the Pacific Ocean, not far from San Diego.
Is it possible Artemis II will be delayed?
Yes.
For safety reasons, the agency won’t launch if certain tough weather conditions roll through the Cape Canaveral, Fla., area. Delays caused by technical problems are possible, too. NASA has other dates identified for the mission if it doesn’t begin April 1.
Who are the astronauts flying on Artemis II?
The crew will be led by Wiseman, a retired Navy pilot who completed military deployments before joining NASA’s astronaut corps. He traveled to the International Space Station in 2014.
Two other astronauts will represent NASA during the mission: Glover, an experienced Navy pilot, and Koch, who began her career as an electrical engineer for the agency and once spent a year at a research station in the South Pole. Both have traveled to the space station before.
Hansen is a military pilot who joined Canada’s astronaut corps in 2009. He will be making his first trip to space.
Koch’s participation in Artemis II will mark the first time a woman has flown beyond orbits near Earth. Glover and Hansen will be the first African-American and non-American astronauts, respectively, to do the same.
What will the astronauts do during the flight?
The astronauts will evaluate how Orion flies, practice emergency procedures and capture images of the far side of the moon for scientific and exploration purposes (they may become the first humans to see parts of the far side of the lunar surface). Health-tracking projects of the astronauts are designed to inform future missions.
Those efforts will play out in Orion’s crew module, which has about two minivans worth of living area.
On board, the astronauts will spend about 30 minutes a day exercising, using a device that allows them to do dead lifts, rowing and more. Sleep will come in eight-hour stretches in hammocks.
There is a custom-made warmer for meals, with beef brisket and veggie quiche on the menu.
Each astronaut is permitted two flavored beverages a day, including coffee. The crew will hold one hourlong shared meal each day.
The Universal Waste Management System—that’s the toilet—uses air flow to pull fluid and solid waste away into containers.
What happens after Artemis II?
Assuming it goes well, NASA will march on to Artemis III, scheduled for next year. During that operation, NASA plans to launch Orion with crew members on board and have the ship practice docking with lunar-lander vehicles that Elon Musk’s SpaceX and Jeff Bezos’ Blue Origin have been developing. The rendezvous operations will occur relatively close to Earth.
NASA hopes that its contractors and the agency itself are ready to attempt one or more lunar landing missions in 2028. Many current and former spaceflight officials are skeptical that timeline is feasible.
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