By Asia Martin, FA-mag.com

Advisors who don’t adapt to new technology and update their business models will struggle to maintain their businesses two years from now, said Ron Carson, CEO and founder of the Ron Carson Wealth Management Group.

Speaking to a ballroom full of financial planning professionals at the 2018 Financial Planning Association conference in Chicago, Carson was no-holds-barred about the turbulence heading toward the financial services industry.

“Disruption is going to happen at a very uncomfortable pace over the next two years, and it’s a lot of things percolating beneath the surface that will really shock or surprise you, or delight you, depending on where you’re at,” he said.

Beneath the surface, the industry is facing trends such as fee compression. Advisors have reduced their fees for the last several years, Carson said, but he believes that approach won’t really help them cover the future terrain.

“The market is not looking, for the most part, for the low-cost provider,” he said. “It’s looking for the high-value provider. So if you’re cutting fees, you can’t cut them low enough to compete with a Vanguard.”

He advised advisors to “articulate” their value to clients in a visual way, in the form of a time line, for example. That way, they can see the journey they’ve been on with their advisor and better comprehend the value the advisor brings.

Another factor affecting advisors is the distrust of consumers and their changing expectations. The American Association of Individual Investors reported in 2016 that 65 percent of participants in its survey mistrusted their financial advisor. What’s more, the association found that only 2 percent of respondents trusted their advisor. To that, Carson said advisors should be “true consumer advocates, and we need to call out these practices” that are not in the consumers’ best interest.

Carson cited a few brands consumers trust that have the data and scale to enter the wealth management space: Apple, Amazon, Facebook and Google.

“Amazon has so much data today that they have such an advantage … they can really disrupt almost any profession today,” he said. “We’re not going to be better than them … but we got to be in the game.”

Consumers trust their ability to research and shop around, according to Carson. They are doing their own due diligence and combing through companies online to evaluate them, taking fewer cues from other people when making decisions. Referrals are still important for advisors, but it’s equally useful for them to spend time and energy supplying a decent amount of material about themselves for folks to find online.

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