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The future of the wealth management firm with AdvicePeriod’s Jonathan Straub

  • AdvicePeriod attempts to be a different type of wealth management firm.
  • Co-founder Jonathan Straub joins us to talk about the hows and whys.
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The future of the wealth management firm with AdvicePeriod’s Jonathan Straub

With roboadvisors, exchange traded funds, and mobile banks in your pocket, what does the wealth management firm of the future look like? It feels like core parts of the investment process are being commoditized, if they haven’t been already. So, where does a asset manager provide value?

Jonathan Straub, co-founder of AdvicePeriod, an L.A.-based wealth management firms joins me to talk about the future of wealth management. He believes the current model of wealth management is outdated and so, AdvicePeriod is his effort at creating a wealth management firm that blends technology and advice, with a corporate culture that is deliberate.

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The following excerpts were edited for clarity.

The old wealth advisory model

My partners and I have worked together for the better part of 15 years. We had success in the space — we grew our prior firm to about $10 billion in AUM and ultimately sold it. What we were doing at the time seemed quite original: open architecture investing, consolidated performance reporting, and access to the best managers.

Really, what we saw was access to information had commoditized much of the investing process. Take asset allocation, for example. Many of the model portfolios are readily available to consumers and advisors. We also found our competitors spent a lot of time tying to analyze and forecast financial markets. In our experience, we found that no one can tell you what the market will do today or in the future, yet firms continue to invest the resources in doing so.

Building something different

We thought there was an opportunity to change the discussion and focus on the things that truly matter, like actionable advice. Hence, that’s the name of our firm, AdvicePeriod.

We approached creating the firm from a blank sheet of paper. Meaning, if we didn’t have any legacy people, processes, and clients, how would we go about building the wealth advisory firm of the future? What services would we provide? What would we charge? What would we change about the client experience? And ultimately, what kind of culture would we need to make this change in the industry sustainable?

The role of technology in investing

I think a lot of people in our industry saw robo-advisers as threats. We have embraced them as part of our solution. If you believe many parts of the investment process have become commoditized, we want to use our tools the best we can. We offer our clients access to many of the commodity solutions and commodity prices. From our perspective, it frees us our time to really focus on the value-add planning processes.

We like to call ourselves bionic advisors. This is the idea that we can use technology to run our practice more efficiently and also to give our clients better experiences. And ultimately, we want to use technology to reach a wider audience. These are really the three ways we see technology helping us work with clients.

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