What You Need to Know
The services of skilled, independent advisors are in high demand, especially those with retirement expertise.
The RIA industry enjoys significant opportunities for growth, but also significant emerging challenges.
These include the aging of the advisory population and ever-growing client expectations.
With its December purchases of Generations Wealth Management and Kairos Private Wealth, Captrust Financial Advisors surpassed its 60th acquisition since 2006.
The firm has grown steadily via acquisitions and organic growth since its founding in 1997, and it now sits firmly among the largest independent registered investment advisory shops in the U.S. As of year-end 2022, the firm advised on more than $600 billion in client assets via its nationwide network of more than 500 advisory professionals.
According to Nick DeCenso, Captrust’s manager of wealth solutions, the firm’s continued success in recruiting new practices and clients is a testament to its investment in advisor support capabilities, new technologies and a client-first service model.
In a new conversation with ThinkAdvisor, DeCenso offered some key insights into Captrust’s strategic priorities and its assessment of the biggest challenges and opportunities facing independent RIAs in 2023 and beyond. As DeCenso explains in the Q&A dialogue presented below, the prospects for growth remain highly compelling. Simply put, as the financial lives of Americans at all wealth levels grow increasingly complex, the services of skilled advisors are in higher and higher demand.
On the other hand, DeCenso says, there are a number of emerging hurdles facing the RIA industry across the board, such as the aging of the “entrepreneurial” advisory population and the need to attract more diverse talent that mirrors the increasingly diverse and dynamic fabric of the U.S. population. All in all, it’s a great time to be an independent RIA, DeCenso says, but it’s no time to rest on one’s laurels.
THINKADVISOR: To begin with, do you agree with the perspective of other RIA firm leaders who say the wealth management business is growing more complex every day, both from the RIA’s perspective and from the clients’ point of view?
NICK DECENSO: Absolutely, I think that is beyond question. From our point of view within Captrust, I think we can point to a number of main factors that are contributing to greater complexity, and also to better client outcomes.
The first trend is the shift away from the traditional focus on investment performance and investment management as the core of the RIA’s value proposition. It is a shift towards what I would call true wealth planning, and it’s having a great impact on our clients.
We have worked hard to make this shift happen within Captrust, and while I feel like we are a good half-step ahead of the competition, it is clear that the whole industry is moving in this direction. The basic reason is that the investment management piece is more commoditized, and most clients today understand this fact. They know they can get good investments in a lot of different places, so they are seeking much more than that from their advisory professionals.
Yes, we continue to work hard to deliver top quality investment portfolios, but we know that we can move the needle much further by providing genuine financial planning. In fact, when we are dealing with prospective clients, we lead with our planning capabilities rather than our investment capabilities.
How do you define financial planning as opposed to investment management?
We define financial planning as looking at a client’s entire financial picture and advising them in a holistic way about how to achieve their short- and long-term financial goals. It’s also about zooming out and incorporating the family’s needs, as well.
Speaking of long-term goals, I would say the other main planning trend we are seeing is just this incredible focus on planning for retirement, again from a more holistic perspective that speaks about so much more than just the investments. It’s about tax planning, income planning, estate planning and everything else that goes into a successful retirement.
Not only are we helping the big wave of people who are closing in on retirement in the coming decade, but we also work hard to deliver the appropriate retirement planning services to our younger clients, so they can get on the right foot.
How else have client expectations evolved in recent years?