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Help Wanted: Bionic Advisors

Financial advisors are unprepared for digital disruption, financial literacy solutions do little to close the racial wealth gap and what to do about the shrinking number of IPOs.

Many wealth management professionals are unprepared for the changes they’re likely to encounter in the industry over the next few years, according to survey results that included 250 wealth advisors, but they’re hoping technology will provide them with some solutions. As the digital transformation in finance continues, 48 percent of investment advisors aren’t prepared for a shift from commission to fee-based services and 43 percent aren’t ready to meet client expectations for more holistic goal-planning advice surrounding life events, said researchers at Broadridge and ESI ThoughtLab. Over the next five years, however, investment providers are planning to use technology to handle more transactions and asset allocation decisions, while focusing their energy to onboarding new clients and providing analysis and advice. “The purely virtual won’t overtake the in-person experience any time soon,” said Kevin Darlington, vice president of product management at Broadridge, but advisors still need to evolve as technology and client expectations continue impacting the industry.

These Myths Perpetuate the “Racial Wealth Gap”


The typical “solutions” of promoting financial literacy and personal responsibility continue to do little to bridge America’s “racial wealth gap,” according to a Duke University report. Even at the highest levels of education and employment, net worth among African-American households is not comparable to that of their white counterparts, said researchers. “Greater financial literacy can be valuable if an individual or household has finances to manage,” the report found. “Financial literacy without finance is meaningless. There is no magical way to transform no wealth into great wealth.” Increasing homeownership rates—a corollary for wealth—among non-whites narrows the gap, but the report found that intergenerational transfers of assets does more to undermine those gains by maintaining differences in wealth along racial lines. Entrepreneurship as a solution was also criticized in the report. “No amount of tutorials or online courses from wealth experts can change the reality of the racialized advantages and disadvantages that undergird entrepreneurship in America,” said researchers, who suggest structural overhauls and “imaginative action” to change the status quo.

The Number of IPOs Is Dwindling. Here’s What We Can Do.


Copyright Spencer Platt, Getty Images

In 1996, there were 7,322 publicly listed companies; about a year ago, there were 3,671, according to The Economist. These days, many companies are opting to stay private for longer, leaving the economic and financial benefits of being public on the table. “The public capital markets facilitate the fast pace of innovation that has long defined the American economy and improved our standard of living,” said a new report issued this week by SIFMA and several other partners, including American Securities Association, Nasdaq and Equity Dealers of America. The report outlines recommendations for reversing the decline in initial public offerings, including enhancing the JOBS Act, encouraging more research of emerging growth companies, improving certain corporate governance, disclosure and other regulatory requirements, financial reporting and tailoring equity market structure for small public companies. “As they have for the past few years, SIFMA members believe policymakers should continue to reassess existing regulations to allow more businesses to readily access U.S. capital markets while maintaining important protections for investors,” said Kenneth E. Bentsen Jr., SIFMA president and CEO.

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