The retail financial services space can do itself a favor by making a few organic improvements, according to Danny Ludeman, chief executive officer at Wells Fargo Advisors.
Ludeman, who keynoted today’s session at the 2012 MMI Annual Convention, said theindustry needs to attract more diverse workforce such as women and other ethnicities. “The fact is, the industry is dominated by people like me (white, hetero males),” he said. “The average age of advisors is 59, which is shocking. We can do a lot more to foster an industry that celebrates innovation by individuals, even if they’re different.”
As well, Ludeman said the industry has failed to attract new affluent clients organically. “The industry has not had organic growth. There have been a lot of consolidation and we do a good job of recruiting from each other but we need to do a better job of attracting new clients and assets,” he said.
Also, Ludeman said he is worried that firms like Charles Schwab and Fidelity have become so big that clients aren’t treated with enough attention because the person bringing in a new client hands that client over to others within the firm and won’t talk to that client again.
To combat these problems, Ludeman said his firm is experimenting with compensation regarding new client acquisitions, segmenting advisor’s role to chief marketing officer in each of its branches as a client acquisition source, and being better with firm-wide referrals.
Ludeman also said his biggest concern is technology innovation because the new generation of investors have different needs (i.e. Twitter, Web chat). “How can we become more accessible? Nobody has made that leap, including us, and we’re greatly worried we’ll become irrelevant,” he said.