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Michael E. Kitces

MSFS, MTAX, CFP®, CLU, ChFC, RHU, REBC, CASL

Head of Planning Strategy. Buckingham Wealth Partners

Publisher. The Kitces Report, www.kitces.com

Blogger. Nerd’s Eye View, www.kitces.com/blog

Twitterer. @MichaelKitces, www.twitter.com/MichaelKitces

Five Industry Trends

Reshaping 

Financial Advice

07.07.2021 | SEC AMAC

Handouts/Additional Materials at: kitces.com/SECAMAC

Handouts/Materials: kitces.com/SECAMAC

Five Industry Trends

• The Luddites

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Five Industry Trends

• Cotton Production – Before & After

Handouts/Materials: kitces.com/SECAMAC

Technology

The Client Experience

The Search For New MODELS

Crisis Of Differentiation

The Great Convergence

Five Industry Trends

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Five Industry Trends

“Financial Advisor” of the 1970s/80s: STOCKBROKER!

Handouts/Materials: kitces.com/SECAMAC

Source: “A Century of Stock Market Liquidity & Trading Costs” by Charles Jones

Five Industry Trends

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Five Industry Trends

• “Financial Advisor” of the 1990s – MUTUAL FUNDS!

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Five Industry Trends

• The online Mutual Fund Supermarket!

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Handouts/Materials: kitces.com/SECAMAC

Five Industry Trends

• “Financial Advisor” of the 2000s –

ASSET ALLOCATION! Source: “Moss Adams & Investment News Industry Benchmarking Surveys”

Handouts/Materials: kitces.com/SECAMAC

Five Industry Trends

• The Rise Of The Fee-Based Advisory Model (B/D)

Source: Financial Planning Magazine

Total Revenue ($000) Fee Revenue ($000) Commission Revenue ($000)

$35,000,000

$25,000,000

$20,000,000

$15,000,000

$10,000,000

$5,000,000

$0

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2019

FP50 Long-Term Trends, 2007-2019

$30,000,000

2017 2018

Fee Revenue Passes Commission Revenue!

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Five Industry Trends

• But now technology is commoditizing it again!

Handouts/Materials: kitces.com/SECAMAC

• What Is The Value 

You’ll Add On Top?

Technology & 

Financial Advice

Trading

Rebalancing

Tax Loss Harvesting

Facilitating Saving

Trading

Rebalancing

Tax Loss Harvesting

Facilitating Saving

Exploring Goals

Financial Planning

Behavior Change

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Handouts/Materials: kitces.com/SECAMAC

Technology

The Client Experience

The Search For New MODELS

Crisis Of Differentiation

The Great Convergence

Handouts/Materials: kitces.com/SECAMAC

• Once upon a time, commissions were for products, 

and fees were for advice

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Regulatory 

Issues

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Robots Vs Humans

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Education, Transactions, Advice 

and Management

Education Transaction Advice Management

Investor 

seeks:

Information Purchase Recommendati

ons

Execution

Investor 

evaluates:

Accuracy 

(is the info 

right?)

Suitability 

(is this the right 

thing for my 

needs?)

Relevance 

(is this right for 

me?)

Trust 

(will they do it 

right?)

Provider: Teacher Salesperson Expert Doer

Primary 

factor:

Generalized Features & 

Benefits

Personalization Delegation

Delivery 

Channel:

Human or 

Tech

Human or 

Tech

Human or 

Tech

Human or 

Tech

Handouts/Materials: kitces.com/SECAMAC

Products vs Advice

Commoditized 

Products Holistic Advice Ambiguous Regulation

Investments Insurance Banking Credit Tax

Financial Advice

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@michaelkitces

Questions?

Handouts & additional materials: 

www.kitces.com/SECAMAC

Contact: questions@kitces.com

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