Don’t count wirehouses out, Goldman says

The idea that the wirehouses are finished and everybody's going independent is a myth, Charles Goldman, co-founder of Advizent LLC, told a room full of registered investment advisers at the MarketCounsel LLC Member Summit in Las Vegas last Thursday.

“Their business model is broken, but they still manage more than half the investible assets in the country. That's a big number,” said Mr. Goldman, former president of institutional platforms at Fidelity Investments and a leading executive at The Charles Schwab Corp.'s institutional business.

Although the large Wall Street firms have been losing market share for several years — with some of that business going to the 17,000 RIA firms in the country — he warned his adviser audience not to get overconfident.

“Regional brokerages, banks and insurance companies are all taking share in the industry,” Mr. Goldman said.

TAPPING BOGLE

Mr. Goldman, technology expert Chris Gibbons and Steven Lockshin, chief executive of Convergent Wealth Advisors, launched Advizent to educate investors about fiduciary investment advice. They tapped John Bogle, founder of The Vanguard Group Inc., to lead a board that has drafted “standards of excellence” to identify firms that function as true fiduciaries.

Mr. Goldman highlighted three problems that RIAs need to solve to sustain their businesses and momentum. Growth topped the list.

RIAs also face the cost and complexity of technology and regulatory compliance, and they must address succession planning, he said.

“The wirehouses are changing. They've co-opted the idea of the fiduciary, and they're going for fee-based business,” Mr. Goldman said.

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