1. Cheap investing algorithms force human advisers to rebrand
themselves as ‘financial coaches’
By Charles Passy
Published: Apr 27, 2015 9:02 a.m. ET
Do you need a “financial coach?”
For many investors, financial advisers are more than just the folks who tell you where to park your money. They can be insurance agents,
estate planners and even armchair psychologists – especially during the panic of a market downturn.
So perhaps it’s no surprise that a number of advisers are now saying they need a new term to reflect the broader reality of what they do.
United Capital, one of the country’s largest advisory firms outside the major brokerages, recently announced it was rebranding the advisers in
its 60-plus locations as “financial life managers” (“finlife managers” for short). The new term was the result of months of market research,
involving interviews with 200-plus investors. United Capital CEO Joe Duran says it speaks to the idea that “your financial life is about your
entire life, not just your money.”
But United Capital is far from the only firm that’s embracing new ways to describe a profession that has roots going back decades, if not
centuries (at least for the pure investing portion). Smaller companies are coming up with their own terms. Jimmy Lee, chief executive of Las
Vegas-based Wealth Consulting Group, refers to himself and other advisers on his staff as “personal CFOs.” Mark Matson, who heads
Cincinnati-based Matson Money, goes with “financial coach” as his preferred wording.
Again, the tie that binds is the point that advisers are doing far more than managing assets these days. If anything, Lee says the investment
aspect is a small aspect of the business, especially in an era of “robo advisers” who can offer clients cheap and simple solutions for putting
together a portfolio. “Those things have become commoditized,” says Lee. That leaves it to advisers to emphasize the value-added parts of
the service they offer, be it proactive tax planning or basic household budgeting. A new term goes a long way toward sending that message,
say advisers.
Of course, advisers have tried this before. In recent years, many have taken to calling themselves “wealth managers” to send the same
message. But in the process, that term has become overused and rather meaningless, some advisers say. Compounding the problem: the
term “wealth manager” may scare off clients who don’t consider themselves wealthy, even if they have assets of $500,000-plus (the minimum
for many advisory firms). And the issue is all the more critical for advisers reaching out to younger (as in under age 50) clients.
“You go to anybody who’s 40 years old and ask them if they’re wealthy. The answer is ‘no,’” says Duran.
Still, not everyone in the industry is buying into the idea that names and titles matter. If anything, critics say this rebranding movement speaks
more to marketing concerns and the need for advisers to stand out from the competition. “People are trying to find a different spin…It makes
me laugh,” says Deena Katz, a Florida-based adviser who also teaches financial planning at Texas Tech University, one of the country’s most
prominent schools in the field.
On top of that, some industry insiders question if the naming issue resonates with clients. Steve Scanlon, cofounder of GuardVest.com, an
online service that measures adviser performance, argues that the business is about building personal relationships, not playing semantics
games. Says Scanlon: “Clients will say ‘I go to Joe because I like Joe.’ It has nothing to do with Joe being called a ‘financial coach.’”