Sep 23, 2024

X X What You Need to Know Attendance rose to 4,200 from 2,500 a year ago. The event facilitated over 30,000 one-on-one meetings pairing advisors with industry product and service providers. One big theme was how advisors can grow their client base and boost organic growth. The Future Proof Festival is rapidly becoming an example of what can be achieved by flipping the traditional conference model for financial advisors on its head. The third iteration of the Future Proof Festival , held in Huntington Beach, California, brought together players from across the wealth management ecosystem for a fun, energizing and engaging experience in an expanded exhibit area. Its attendance rose to 4,200 from 2,500 a year ago. The California-based event and other Future Proof gatherings are led by founder Matt Middleton in partnership with Joshua Brown, Ritholtz Wealth Management’s CEO; Barry Ritholtz, the firm’s chairman and chief investment officer; and other Ritholtz leaders. This year’s Future Proof Festival covered the gamut of issues affecting advisors and the growing community that supports them, including the industry’s need to grasp the future of wealth management, enhance the client experience, and learn new and better ways to deliver advice and embrace technology — all while running better businesses. Networking was also a prime focus, with Future Proof 2024 facilitating over 30,000 one-on-one meetings that paired advisors with industry product and service providers. Sprinkled in amongst the panel sessions — which featured industry VIPs like Creative Planning CEO Peter Mallouk and DoubleLine CEO Jeffrey Gundlach — were sessions on craft beer and wine tasting, coffee brewing, pizza cooking and even candle making. One such gathering even featured José Andrés, the dynamic celebrity chef. KPIs and AI During one advisor-focused talk, blogger Michael Kitces shared his latest research on the key performance indicators that affect the economics, growth and need for scale in advisory businesses. “In the growth life cycle of firms, there are several inflection points where profitability declines as advisors need to bring in more people to service the client base,” he said. “Those typically occur at the $1 million and $5 million revenue marks, as required overhead spending to support the business become larger and larger as a percentage of revenue, and advisors need to make bigger and bigger investments that become a drag on profitability.” In other words, while total profits grow as firms do, there’s no “step function” in firm economics — even at the highest revenue levels — resulting in businesses and an industry that don’t scale. This makes the smart use of technology, with its promised productivity, more important than ever, according to Kitces, the head of Kitces.com . Future Proof helped advisors learn more about artificial intelligence through panel sessions and a “ demo drop ,” which featured some of the newest wealthtech platforms embracing AI to help advisors optimize their marketing opportunities and lead generation, like Finny AI. At the same time, firms such as Jump are working to streamline meetings and automate related workflows. This includes work on simplifying the steps that advisors need to prepare for meetings and on making it easier for advisors to tackle follow-up items after meetings — many of which are now dominated by manual processes. Where’s the Growth? Another big theme at Future Proof was how advisors can grow their client base and boost organic growth. Recent benchmarking studies show a slowdown, as baby boomers enter decumulation and traditional referrals slow. John Wernz, entrepreneur in residence at Great Hill Partners and the former chief marketing officer of Wealth Enhancement Group, emphasized how the industry can refocus on marketing. In his talk, he stressed that advisors need to break through current marketing myths. The Latest “Most advisors can close leads,” Wernz posited, before quickly rejecting this premise. He noted that only a few advisors actually have the capacity, interest, ability and sales training to be effective at closing. His advice? Firms should give marketing leads to their top closers. There are more ways than ever to generate leads, Wernz argued, but the trick — and most difficult task — is to nurture these leads over time. That process of moving a prospect from a lead to an appointment can entail more than 10 “touchpoints,” so firms need to develop a strong nurturing process, he explained. They also must have educational content for these prospects, as well as marketing systems to track, report on and streamline the lead-gen process. While cost-effective leads have value, Wernz added, advisors should strive for fewer, better qualified leads that are a genuine fit for that firm’s services. Paying more for these types of leads over time provides a much better return on investment. On the Boardwalk and on Stage A quarter-mile-long exhibit space filled up the boardwalk between the Pacific Coast Highway and Huntington Beach. Here, attendees could speak with technology and wealth platform providers, asset managers and other industry players who come to showcase their solutions in colorful tents spread out between the speaking areas, food trucks and drink stands. One popular vendor destination this year was Apex Advisor Solutions’ outdoor basketball court, where advisors could learn about the latest RIA custody and technology solutions from Apex, while shooting free throws. Future Proof also hosted live broadcasts of VIP interviews by Bloomberg and other media, along with live podcasts — like Ritholtz’s “Masters in Business” discussion with Joe Lonsdale, the serial entrepreneur and investor. Lonsdale, co-founder of the wealth platform Addepar and data analytics firm Palantir Technologies, noted that the war in Ukraine is becoming ground zero for how technology is changing warfare. The advent of automated fighting systems, such as “drone swarms” and small, automized naval fleets, is successfully overwhelming traditional military tactics, Lonsdale explained. With the success of these new weapons, those defending themselves against this technology have to embrace new “electronic warfare” tactics, like using microwave bursts and other “jammers” to disrupt these swarms, he said. Lonsdale pointed to Israel using technology to turn pagers and walkie-talkies into explosive devices in order to disable Hezbollah fighters. And consistent with its “wealth festival” moniker, Future Proof is known for its strong embrace of musical entertainment. This year, it staged performances of Third Eye Blind and the X Ambassadors. Credit: Janet Levaux/ALM Timothy D. Welsh is president, CEO and founder of Nexus Strategy, a leading consulting firm to the wealth management industry. NOT FOR REPRINT © 2024 ALM Global, LLC, All Rights Reserved.Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing. Up Next