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

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.