Quantcast
The MFWire
Manage Email Alerts | Sponsorships | About MFWire | Who We Are

Subscribe to MFWire.com's News Alerts [click]

Rating:What Should I Invest In? Not Rated 3.0 Email Routing List Email & Route  Print Print
Thursday, February 22, 2001

What Should I Invest In?

Reported by Tamiko Toland

Investors want advice. A four-member panel at NICSA's annual conference in Miami discussed changes in the business of giving advice, many of which have been effected by technology, especially the Internet. David Peck, senior vice president of asset management products and services at Charles Schwab moderated.

"It is the biggest innovation in the financial services industry since the first index fund or maybe the first open-end mutual fund," said Ed Rodden, senior vice president of help and advice marketing at Charles Schwab.

Talk is cheap, and getting cheaper still. Panelists discussed the commoditization of advice because of the Internet as well as an increased awareness among the consumers of the need for some guidance.

"While there was an initial flurry of self-directed activity, people found that do-it-yourself financial planning is not as much fun when you're losing money," said James E. Folwell, a consultant with Cerulli Associates.

How can the fund industry use this trend to boost sales and make the money stick?

Advice-giving tools are useful and provide a 24/7 environment where ignorance need not be a source of embarrassment. However, especially when you consider that the Internet may well be the cause of the current desire for advice, the Internet is not going to simply solve the problem.

"We know clients will buy more if they have a face-to-face relationship," said Sarah McKenzie, vice president and general manager of wrap products and personal trust services at American Express Financial Advisors.

McKenzie observed that getting paid for advice can present a challenge, but tangible products, like complex financial plans produced by her firm, help demonstrate value to clients. Furthermore, she stressed that technology can be implemented to help leverage sales across multiple channels.

Panelists also discussed the various flavors of advice: it can range from information handed to self-directed investors to a very hands-on, fee-based approach. Many firms have not effectively identified a client's level or moved clients through the varied levels of advice as their needs change.

"Understand which business you want to be in and which customers you want to serve," advised James Duncan, vice president of marketing at DiaLogos.

"We've decided that we're playing into that entire spectrum," said Schwab's Rodden.

"Moving a client across different levels of advice is difficult," said Folwell, explaining that proprietary attitudes within organizations often prevent the smooth transition of clients from one advice platform to another.

While Schwab has a known fondness for the use of technology, the Internet has in some ways presented challenges for the industry. Pointing out that current efforts to dispense advice have to compete with hot tips on the Web, Rodden said, "Chat rooms are the graffiti on Internet walls."

Rodden emphasized that firms have to be able to reconsider their business models when reacting to changes in the industry. Applying this to Schwab's business, he related the following anecdote from his firm: "After pricing on trades at our firm went to $29.95, Dave Pottruck said, 'If it goes any lower, we'd might as well refer to it as a tip.'" 

Stay ahead of the news ... Sign up for our email alerts now
CLICK HERE

3.0
 Do You Recommend This Story?



GO TO: MFWire
Return to Top
 News Archives
2021: Q2Q1
2020: Q4Q3Q2Q1
2019: Q4Q3Q2Q1
2018: Q4Q3Q2Q1
2017: Q4Q3Q2Q1
2016: Q4Q3Q2Q1
2015: Q4Q3Q2Q1
2014: Q4Q3Q2Q1
2013: Q4Q3Q2Q1
2012: Q4Q3Q2Q1
2011: Q4Q3Q2Q1
2010: Q4Q3Q2Q1
2009: Q4Q3Q2Q1
2008: Q4Q3Q2Q1
2007: Q4Q3Q2Q1
2006: Q4Q3Q2Q1
2005: Q4Q3Q2Q1
2004: Q4Q3Q2Q1
2003: Q4Q3Q2Q1
2002: Q4Q3Q2Q1
 Subscribe via RSS:
Raw XML
Add to My Yahoo!
follow us in feedly


  1. MFDF webinar - Gender Bias in Investment Professional Evaluations, March 9
  2. FinReg Outlook 2021, March 10
  3. MFDF Director Discussion Series - Open Forum via Zoom (Midwest), March 10
  4. Irish Funds North American Digital Seminar, March 11
  5. Nicsa webinar - Listen, Learn & Lead: Empowering and Sponsoring Women, March 11
  6. MFDF webinar - Municipal and Taxable Fixed Income — A Multi-Speed Recovery, March 12
  7. 2021 Virtual Mutual Funds and Investment Management Conference, Mar 15-19
  8. Women for Impact - A Call to Action, March 16
  9. SEC & DOL Standard of Conduct Rulemakings — Present & Future Considerations, March 23
  10. Expect Miracles Foundation's Virtual Mystery Game Night, March 24
  11. MFDF Director Discussion Series - Open Forum via Zoom, March 24
  12. ETFGI Global ETFs Insights Summit - ESG & Active ETF Trends, Mar 24-25
  13. MFDF webinar - Asset Management M&A for Fund Directors — Recent Trends and Governance Issues, March 31
  14. MFDF Director Discussion Series - Open Forum via Zoom, April 7
  15. MFDF In Focus: Board Oversight of Sub-advisers, April 15
  16. ETF.com Awards 2020, April 20
  17. The 31st Sub-Advised Funds Forum, Apr 20-21
  18. MFDF Director Discussion Series - Open Forum via Zoom (Northeast), April 21
  19. FIASI virtual event - ESG in Fixed Income: Shining a Light on Transparency, Apr 22-23
  20. 44th Annual AIMSE Marketing & Sales Conference, May 2-4
  21. MFDF Director Discussion Series - Open Forum via Zoom (Southeast), May 5
  22. ICI 2021 General Membership Meeting - Day 1, May 6
  23. ICI 2021 General Membership Meeting - Day 2, May 13
  24. 2021 FINRA Annual Conference, May 18-20
  25. MFDF Director Discussion Series - Open Forum via Zoom, May 19
  26. 2nd annual ETFGI Global ETFs Insights Summit - USA, May 19-20




©All rights reserved to InvestmentWires, Inc. 1997-2021
14 Wall Street | 20th Floor | New York, NY 10005 | P: 212-331-8968 | F: 212-331-8998
Privacy Policy :: Terms of Use