Sponsored by Addepar
The past year presented us with challenges that reshaped our lives and businesses. At the same time, the largely digital environment brought many teams in our industry closer together.
As Chief Marketing Officer at Addepar, I’ve been fortunate to have conversations with members of our client advisory board and some of the leading voices in our industry today: Bryn Talkington, Managing Partner, Requisite Capital Management; Edward Swenson, Co-Founder and COO, Dynasty Financial Advisors; Robert Wedeking, Chief Investment Officer, Geller Advisors; and Kurt Miscinski, President and CEO, Cerity Partners. Here’s their take on the wealth management trends and opportunities that will be top-of-mind in 2021.
Where do you envision growth opportunities in 2021?
Kurt Miscinski, President and CEO, Cerity Partners:
“We expect the U.S. and the globe to resume economic recovery and to have completed a full recovery by the fall of '21. Covid-19 vaccines are going to drive pent-up demand, starting in the hardest-hit industries such as leisure and travel, but also consumer discretionary businesses. We also watch for disruptors that are exponential in terms of their ability to command growth and performance, such as e-commerce—these opportunities range across all industries.”
Bryn Talkington, Managing Partner, Requisite Capital Management:
“We are big believers that the secular growth companies, which can be found across sectors will continue to be market leaders, but also understand that volatility is the price of
admission for equity investors. We would be surprised if we didn’t see a 10-15% correction. The U.S. remains firmly at the epicenter of innovation, for that reason we will continue to favor the U.S. versus developed international. We also think bitcoin will continue to gain institutional adoption.”
Robert Wedeking, Chief Investment Officer, Geller Advisors:
“2021 has the potential to be volatile. The global markets are still dependent on massive global central bank intervention and fiscal stimulus. That said, I think there's a lot of pent-up demand in the economy and we're favorable on markets. I think investors need to be prepared for some volatility and maintain a long-term focus. The best opportunity is still in venture capital and private investments. We’ve been doing a lot in terms of technology and late-stage healthcare. SPACs have gotten very, very popular.”
Edward Swenson, Co-Founder and COO, Dynasty Financial Advisors:
“Our outlook for 2021 is fairly sanguine. We’re rethinking the conventional allocation portfolio in favor of a higher allocation to alternative investments. We’ve also had a glimpse of the future...digitization, workforce mobility and biotech will be forever impacted. Some of the trends we’re seeing due to the pandemic will continue to develop.”
In 2020, there were tremendous advancements in many industries and areas despite the hardships we collectively faced. Looking ahead to 2021, it’s no surprise to learn that growth among industries such as biotechnology, e-commerce, communications, digital currency and cybersecurity are expected to accelerate, together with recoveries in industries hit hard by the pandemic.
The challenges in 2020 have brought ESG to the forefront. What’s your firm's approach?
Bryn Talkington, Managing Partner, Requisite Capital Management:
“The most important lever of ESG is G - governance. Strong governance, which focuses on the company’s leadership, executive pay and shareholder rights has always been a hallmark of a well run company. Ironically, Facebook is one of the top holdings in the biggest ESG funds out there. Facebook has two classes of shares (Class A - one share = one vote and Class B shares - one share = 10 votes). Mark Zuckerberg owns ~70% of Class B shares which gives him the ultimate power to make broad decisions on a platform with over 2.7 billion users. To me, any company with two classes of shares, with one person controlling those shares, goes against good corporate governance and shouldn’t qualify as an ESG company. The gap between what defines ESG vs. the companies that are actually labeled ESG seems to be very wide and somewhat contradictory.”
Edward Swenson, Co-Founder and COO, Dynasty Financial Advisors:
“The next generation of investors will demand ESG—it’s core to their beliefs. Our role as a firm is to provide access to products and capabilities. We rely on a bottoms-up strategy and use technology to customize portfolios specifically to what clients care most about. It’s really about enabling the investor to define what ESG means to them.”
Robert Wedeking, Chief Investment Officer, Geller Advisors:
“We’ve definitely seen a pick up in interest in ESG. We take a highly conversational and curated approach to building client portfolios and indexes that align with their values and needs, and we partner with managers on the cutting edge of ESG. These deeper conversations lead to stronger relationships. I look forward to conversations with folks who say they’d like to build a part of their portfolio with an ESG mandate.“
Kurt Miscinski, President and CEO, Cerity Partners:
“ESG has been an important component from the start of our firm. We continue to see strong interest in a few key areas such as climate, clean water, inclusion and financial entrepreneurialism. For every client we work with, we proactively prompt a discussion about how their investing aligns with their broader financial goals and objectives. It's about helping people use their wealth to better the world.”
Addepar’s clients see ESG growing in importance, especially among younger investors. Many even see greater ESG opportunities and demands as millennials gain wealth, which may ultimately motivate more companies to meet higher standards on sustainability and other areas of societal impact. Firms will rely on technology to enable customization of ESG strategies.
How do you see your clients’ needs evolving with the pandemic?
Edward Swenson, Co-Founder and COO, Dynasty Financial Advisors:
“For our advisor clients, we're seeing a strengthening of our community and the desire to be part of a network for best practices, collaboration and communication. For investors, the value of an advisor has been reaffirmed.”
Kurt Miscinski, President and CEO, Cerity Partners:
“I personally witnessed our clients take a real pause. The pandemic caused them to place a greater emphasis on wealth preservation, more than I’ve seen in a number of years.”
Bryn Talkington, Managing Partner, Requisite Capital Management:
“We’ve purposely built a smaller client base, which allows for more constant and personalized communication. We had to teach a few clients how to use Zoom, but once we got them up and running, it was really status quo.”
Robert Wedeking, Chief Investment Officer, Geller Advisors:
“Most of our clients are very focused on capital preservation, so we always have conversations about the markets and risk and reallocation. Right now, 90% of conversations are about the potential changes to tax laws. They’re asking, ‘What do I need to do for my kids? Are there things changing what I should be doing now?’”
Investors are looking for a single trusted partner for their financial needs—not only for convenience, but also for a holistic view of their entire financial lives. Meanwhile, advisors recognize it’s important to consider scalability and an integrated approach. To meet evolving client needs, innovative advisor solutions will increase efficiency for firms.
How are you driving deeper relationships in 2021 and beyond?
Bryn Talkington, Managing Partner, Requisite Capital Management:
“I think it’s so important just to listen. Our clients are all uniquely successful and all have different needs, wants and objectives. Once we understand where they want to go, we have a robust toolbox to get them there.”
Edward Swenson, Co-Founder and COO, Dynasty Financial Advisors:
“2020 reaffirmed the value of a partner—advisors will not be replaced by robo platforms or capabilities. I believe this mass customization through technology approach will become mainstream over the next few years.”
Kurt Miscinski, President and CEO, Cerity Partners:
“Many of us were trained as attorneys, tax advisors or investment professionals to address a slice of a much bigger picture. It has become very clear that clients want a holistic approach. They want their advisors to have a better appreciation for the whole picture and an understanding of how all the pieces fit together, so they can be a true, trusted advisor.”
Robert Wedeking, Chief Investment Officer, Geller Advisors:
“We’ve had more planning conversations with our clients during the shutdown period than ever before. We do a lot for our clients. Taxes. Personal CFO services. Sophisticated estate planning. Real estate. Folks that may have not been using us a lot for tax are now asking us for tax. We've been able to develop deeper relationships and expand the services that we're doing for clients."
We’re hearing from our clients that the role of technology continues to be front and center when providing customized advice. Advisors recognize the importance of personalized communication during times of market volatility, and while this human touch will always be key, technology enables advisors to tailor their advice and enhance relationships.
What advice do you have for the next generation of talent?
Robert Wedeking, Chief Investment Officer, Geller Advisors:
“If you’re not making mistakes in investing, you're not really investing. Just don't make the same mistakes over and over again. It’s important to have intellectual honesty, passion and a willingness to consume as much information as you can.”
Bryn Talkington, Managing Partner, Requisite Capital Management:
“I started as a stockbroker in the 90s making 300 calls a day. I was successful because I had persistence, curiosity and grit. It was a pure meritocracy, not who you knew. If you did well, you advanced. It’s a wonderful and diverse industry. I’m a strong believer that finance needs more women in the industry.”
Edward Swenson, Co-Founder and COO, Dynasty Financial Advisors:
“There's never been a better time for advisors to go independent or to be part of a network of independent advisors. It’s important to surround yourself with good partners—you're independent, but you're also not alone.”
Kurt Miscinski, President and CEO, Cerity Partners:
“There’s been a change in the breed of financial advisors. Twenty-five years ago, you had advisors who were great salespeople and could sell a relationship. Today, to be good at wealth management advisory, you have to understand the full picture in its context. I think ten years from now, most universities will have some form of financial planning/wealth management option in their business curriculum.”
As the expectations among investors evolve, the advisor pool is shifting as well. At Addepar, we feel fortunate to work with so many outstanding executives who are committed to nurturing our industry’s next generation of talent. Following my conversations with these leaders, it’s impossible not to feel energized and optimistic about the year and the many opportunities that await. While we’re reminded that the future is never certain, we’re ready to embrace whatever 2021 brings.
Natalie Sunderland is the Chief Marketing Officer at Addepar, a wealth management platform specializing in data aggregation, analytics and performance reporting. Addepar works with hundreds of leading financial advisors, family offices and large financial institutions that manage data for over $2 trillion of assets on the company's platform.
