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    The moment we realized one-size-fits-all advice doesn’t work

    May 02, 2024

    Allworth co-founder Pat McClain looks back on the genesis of a more personalized, client-centric approach to retirement planning.

     

    I’m sitting in for my Allworth co-founder Scott Hanson this week, and I thought I’d take you back to how the financial sector has changed over the years and briefly explain why that should matter to you.

    In 1992, Scott and I really were employed by an insurance giant doing what earnest and young financial professionals did back then: Working as salespeople and scrambling to meet quotas to keep our bosses (and the home office) happy.

    I would think that virtually everyone reading this has had that job, and maybe several like it. A job you wanted, but one that once you were hired, quickly became a terrible fit for your passion, skillset, or personality.

    Thinking back, I would estimate that each year, the regional office of that insurance giant would bring in forty fresh-faced, world-beating young people, and teach them how to find clients and how to explain the nuances of their investment products.

    And, if my memory serves, by the end of each year, just a handful of those new hires would remain.

    It’s not that the overall training wasn’t good, because it most certainly was. In fact, it was something of a boot camp, because the one thing firms like that did is train you well. We learned a great deal in those early years, chief among them being that we didn’t want to spend our careers convincing people that what could easily be described as a “one-size fits all” approach to saving and investing was the Holy Grail.

    Allworth Financial is a primarily fee-based RIA, or Registered Investment Advisor. But the acronym RIA wasn’t new even back when we founded Allworth (formerly Hanson McClain) in 1993. The fact is, the term RIA appears numerous times in the Investment Advisers Act of 1940.

    It’s just that, it wasn’t all that long ago - I would say fewer than 20 years - that most people had still never heard of an RIA.

    So, it’s not the least bit surprising that back in the early nineties, when Scott and I decided to head out on our own and create a client-centric RIA, most of the rest of the people from the office we were working in laughed. A few even mocked us.

    It wasn’t just out of spite or meanness because there were some terrific people working there. No, instead it originated, I believe, out of fear.

    Most of us don’t feel comfortable with change, and with good reason. Because any quick look back at history reminds us that change doesn’t always work and that it isn’t always for the better.

    And when faced with change? Especially when what you or I are doing is working for us?

    Most of us push back against it.

    Simply, if you make a widget one way, and you’ve invested yourself in a process, and a couple of people in your shop announce that they believe there is a better way?

    Well … most don’t want any part of that.

    The reason Allworth has become what it has, an award-winning RIA, is because in no small part, 30 years ago, the public was ready to embrace a more holistic and personalized approach to investing and financial advising. The fact is, that Scott and I happened to come of age at a time when there was an explosion of people who had saved exceptionally well for retirement, and they were beginning to understand that they dictated the marketplace and could demand more personalized attention and advice from their advisor.

    In a way, even though RIAs existed before then, until 30 or so years ago, via advertising and because “things” had mostly always been done the same way, the perception was that the “cure” for improving your life through investing was only available via those insurance giants (and stockbrokers).

    Scott will be back next week. But when I sat down to write this article in his stead, I found myself remembering a recent call to our podcast where we received a question about where the term “fiduciary advisor” had come from.

    And that got me to thinking a bit nostalgically about how Allworth Financial began more than 30 years ago.

     

     
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      1Barron’s 2024 Top 100 RIA Firms. Barron's© magazine is a trademark of Dow Jones L.P. The ranking of independent advisory companies is based on assets managed by the firms, growth, technology spending, succession planning, and other metrics.

       2 Retention Rate Source: Allworth Internal Data, FY 2022

      3 The NBRI Circle of Excellence Award is bestowed upon NBRI clients meeting one or both of the following criteria: Total Company score at or above the 75th percentile of the NBRI ClearPath Benchmarking Database and/or improvement of five (5) or more benchmarking percentiles in Total Company score over the previous survey. 

      4 As of 7/1/2024, Allworth Financial, an SEC registered investment adviser and AW Securities, a registered broker/dealer have approximately $22.5 billion in total assets under management and administration. 

      5 InvestmentNews 2020 and 2021 Best Places to Work for Financial Advisers. The ranking reflects survey responses and scores completed by both employers and employees. Employers report their organization’s workplace policies, practices, and demographics. Employees complete a survey designed to measure the employee experience. 

      6  2021 Value of an Advisor Study / Russel Investments

      7 Ranked 9th Top Wealth Managers By Growth in Assets in the U.S. from RIA Channel, 2022. RIA Database and RIA Channel are registered trademarks owned by Labworks, LLC.

      8 USA Today Best Financial Advisory Firms 2024. The ranking is based on the growth of the companies’ assets under management (AUM) over the short and long term and the number of recommendations they received from clients and peers.

      9 NBRI Best in Class Ethics 2023. The Best in Class level is bestowed upon clients performing at or above 90 percentile of the NBRI ClearPath Benchmarking Database.

      ✢ Scott Hanson, Investment Advisor 2005, 25 most influential people in the financial services industry. The ranking reflects 25 people who Investment Advisor magazine believes have had or will have the greatest influence on the financial services industry.

      ✼Pat McClain, InvestmentNews 2014, Invest in Others Community Service Award, presented to an advisor who has made an outstanding impact on a community through managerial contributions to a non-profit organization.

      †Financial Times, FT 300 Top Registered Investment Advisers, June 2019. The ranking reflects six areas of consideration including the company's years in existence, industry certifications of key employees, AUM, asset growth, SEC compliance record and online accessibility and calculates a numeric score for each company. 

      Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.