Secret Threat
Most financial advisors don't see online brokerages as true rivals, and yet they admit to losing more business to online brokerages than to any other kind of firm, according to a recent Aite Group report, which surveyed 402 FAs. While nearly 70 percent of financial advisor respondents said online brokerage represents zero threat to their business, 23 percent said online brokerages steal away the most business. In fact, discount brokerages have won net clients and assets in the past two years, the report indicates. Adam Honoré, research director with Aite Group and author of this report, says part of the problem is that firms like Wells Fargo and Merrill Lynch are focused on restoring their own brands, rather than on marketing the value of a financial advisory relationship. “They've done a poor job of combating the perception that Schwab, Fidelity and E*Trade are putting out there — that ‘I can do this myself as well as an advisor and without the fees.’”
