In the financial services industry, relationships are now what is driving the business.  Asset management might be at the heart of what drives an individual toward financial advice, but savvy financial planners are realizing that it takes more than asset management to bring lasting value to the advisory relationship.  Asset management is now a commodity service that can be outsourced.

Financial advisers still feel like investment management is a part of their core value proposition.  There is a slow migration away from large brokerage firms, the focus on teams and professional referral networks and the constant push up-market toward wealthier clients and away from lower net-worth investors.

Through 2007, according to the Cerulli and Associates research, the number of independent financial advisers that are not affiliated with a brokerage firm grew to 14,451, reflecting a 23% increase from 2005.

Assets under advisement by the segment over the same period grew by 52% to $1.4 trillion.

Over the same period, the number of financial representatives affiliated with full-service and independent brokerage firms declined by 2% to 158,231.

Although the independent adviser segment is still a small fraction of the brokerage-affiliated category, the migration is expected to continue in stride with the movement toward more holistic and fee-based planning.  Some brokerage firms are already responding to the trend with innovative programs designed to create internal wealth management teams through enhanced training and top-down support.

The most significant areas of growth and opportunities are in holistic, comprehensive approaches to meeting clients' needs.  The challenge for most advisers, however, is getting there.  Ironsides Associates can help with clearly directing your efforts to relationship management versus asset management.  Remember, people still do business with people that they like not necessarily deliver the best price. 

Similar to the transition away from commissions and toward fee-based pricing models that took hold a decade ago, the movement toward comprehensive planning is sometimes easier said than done.

These days, the relationship is where the adviser makes a difference, rather than some new fangled "asset allocation plan." There remains a sizeable gap between those talking the talk and those walking the walk.

With thousands of mutual funds, exchange traded funds and everything else out there, from one adviser to the next, the quality of asset allocation doesn't vary as greatly as do the other kinds of advice and services they can provide... The new mantra is holistic planning, but not everybody does it.  Maintaining a relationship with the client is the key.

Planners now spend most of their time meeting with current clients, and new client acquisition rather than trading and asset management.  It is now possible to outsource most of the asset management duties and hire professionals specifically to handle planning, accounting and legal issues.

You can't attract high volume business without offering a lot of other services beyond asset management, everything from tax preparation to estate planning.  You must create a stickier relationship that can give you control of the majority of a client's net worth.

A key to the wealth management strategy is flexibility, which is something the larger brokerage firms have yet to master. The big wirehouse firms still haven't figured out how to deliver financial planning. 

The evolution of independent-advisor firms toward more-comprehensive planning has placed increased pressure on brokerage firms to offer similar services through their reps.