And Ken Hullings joins us now.
He is the executive vice president of client success at LPL Financial.
Welcome down to the big board.
Really nice to have you.
Yes, thank you so much.
So let's talk about the LPL Institutional benchmark report.
It's a lot of data, 1200 institutions, 7400 different advisors.
How is that group?
That tranche, these institutions approaching the wealth management space right now.
Yes, so wealth management is really important for financial institutions.
If it's done well, a financial institution becomes indispensable to their customers.
So the ones that we see leading the pack are really focused on four things winning the race for talent, uh, expanding and deepening their existing client relationships, enhancing efficiency by boosting capabilities and capacity, and finally evolving their business model.
And evolving their business model.
What are some of the trends that you think are most concerning to institutions right now in this particular ecosystem, this environment?
We've got no shortage of uncertainty right now.
Ken.
Uncertainty is here for sure.
The things executives are thinking about that are running wealth management businesses and institutions are really focused on, hey, is my business set up to be sustainable?
Many of the institutions are growing year over year, but a lot of it is because of market tailwinds, which is obviously potentially changing over the.
Last couple of months, as well as inorganic activity, M&A and advisor recruitment.
So am I setting myself up for sustainable growth?
Second, do I have the right processes and procedures in place to make sure I'm supporting advisors and their clients in a really challenging competitive talent market?
And then finally, you know as well as I do, we have this great generational transfer of wealth.
If I am not capturing that ran that transfer of wealth right now, I am funding the growth of my.
Competitors.
So those are the things that are on the minds of top executives.
Can you talk to me a bit more about the recruitment strategy out there with no shortage of options for a lot of this top talent to go to?
How are they going about attaining and retaining a lot of the top tier talent that they want to represent their firms, their wealth management goals, not just in the short term, but establish those relationships for the long haul?
Yes, it's a really good question.
The amount of advisors in the market is not growing, so you have less supply for these advisors, which means the demand is through the roof, which means it's very competitive.
And so in order to attract or retain top advisors, it really comes down to are you providing a good value prop?
Are you providing them the technology they need to grow?
Are you providing them the products and platforms that they need?
And finally, are you focused on their experience taking friction out of the ecosystem for them?
And then finally, as they go through their career, are you setting yourself up as the place where they want to retire?
And they want to pass their client relationships down to the people on their team and to the next generation of advisors.
Correct me if I've got this wrong, more than 100,000 advisors are set to retire within the next decade.
What does that do for the broader conversation of succession planning?
It's, it's really amazing to think about what that could mean for the industry and for these financial institutions as it relates to succession planning again.
Financial institutions need to make sure that they have a well-defined program that advisers understand that feels fair to recognize their life's work that they've put in, but also is very seamless to the client relationships because the client experience is the thing that really matters.
I wonder what in your data, if anything, you've got about AI, either the way that's being used and leveraged by the wealth management fund.
Or do you have a lot of advisors in the space who say, hey, it may be all well and good to embrace some of these new age tools, but AI may actually be a bit of a threat to our industry.
Is that conversation happening at all all day every day, as I'm sure it is with you, and it's less of a threat.
It's more of an opportunity right now, mainly because of the capacity need.
So in the report you'll see the average adviser is dealing with 433.
Clients.
Most advisors, especially top performing advisors, serve around 250 or 300.
So the advisors are, are way over capacity.
What that means is they're not being able to deepen the relationships as much as they have, and many of, much of their revenue, um, is only coming from a small percentage of their clients.
And so if they use AI right, it'll Free up a lot of their time to go deeper with their clients, attract more customers, become more valuable to those clients, and again, when this transfer of wealth hits us or continues to hit us, they'll be in such a great position to secure those relationships.
Ken Hullings, executive vice president of client success at the one and only LPL Financial, thanks a lot for being down here and thanks for being on the show.
Thank you so much.
There you go.
Look at the guy came down here for you.
