The Most Important Financial Advisor Story Of 2012

Friday, December 28, 2012 21:06
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The Most Important Financial Advisor Story Of 2012

Tags: advisor industry people | Financial Planning Apps | practice management | Social Media

The most important story of the year on Advisors4Advisors in 2012 was—drum roll, please…. “I've Seen The Future Of Professional Wealth Management Software And Its Name Is inStream Solutions.”

 

The March 28 story was about a new, radically different approach to delivering financial advice devised by Alex Murguia in a platform called inStream. Murguia recently raised several million dollars.

 

In 2001, right after earning a Ph.D. in psychology, Murguia joined McLean Asset Management, an RIA founded by his wife’s father, and he has since taken the firm from $25 million to $600 million in AUM. Creating a successful RIA is an impressive accomplishment, but inStream reveals Murguia as a visionary in the financial advice field.

 

inStream reinvents a professional’s approach to wealth management and, in doing so, aligns what you do for clients with your value proposition. Murguia says most clients need an advisor to do about 20 tasks—find me a new mortgage, buy life insurance, find a long-term care insurance policy. These mundane tasks are the glue that binds deeper, stickier client relationships.

 

Murguia says the current service model for advisors—embraced by CFPs—is to update a financial plan once a year, put it on a shelf, and take it out a year from now once again to see how your client is doing. That process does not make an advisor sticky, though it is the way financial planning is commonly practiced. (I’ve previously argued that the business model for financial planning is broken.)

 

Instead, inStream enables a new model, wherein advisors are monitoring financial plans all the time and updating them proactively. Instead of waiting for a client to come to you because he needs a new mortgage or insurance, InStream alerts an advisor that the client’s mortgage should be refinance or that he’s at a stage and station in life where insurance is needed. The inStream platform represents a first attempt at what will become the way to practice in the future.

 

The fact that this was the No. 1 story of the year gives me new respect for A4A’s readership. I often criticize advisors—my readers— for being incredibly cheap, lacking an attention span, and having a provincial, holier-than-thou attitude toward other professionals. However, in making inStream the top financial advisor story of 2012 on A4A, the intelligence of A4A’s is praiseworthy.

 

In fact, the entire list of A4A’s 10 most-read stories of 2012 proves the notion that the masses indeed do have wisdom. After all, you never know what crowd-sourced data is going to show. For example, the most popular YouTube video of all-time is Psy’s Gangnam Style, and “Charlie Bit My Finger” makes it to No. 6.  

 

 

Readers could have made many other A4A stories No. 1 for the year, like the one that revealed the names of the two members of CFP Board’s Disciplinary And Ethics Commission who resigned in an affair we may never understand, or the one about former NAPFA chairman Mark Spangler’s indictment on 23 counts of fraud.

 

Instead of the scandal stories, readers made A4A’s most substantive stories the most popular for the past year. Three stories about the most popular financial planning, portfolio management and CRM apps used by RIAs made it to the top 10 list. Also making the list is my post saying that CFP Board’s suggested disclosure on Form ADV misleads consumers about whether their advisor is a fiduciary. (It's especially impressive that this story made it to the top 10 because it was written only a few weeks ago!)      

 

You can access the full list of the most important stories of the past year anytime on the A4A Trending page, if you’re an A4A member ($60 a year).

 

As the end of the year closes in, I am truly grateful to have such smart readers. Thank you for caring about what we’re doing here on A4A.

 

All the best for 2013.

 

 

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