Threats That Are Actually Growing Wealth Management


Last Updated on April 6, 2023 by John Prendergast


NOTE: The opinions expressed in this post belong to the author and are for general informational purposes only. These opinions do not necessarily reflect those of Blueleaf Wealth, Inc. the publisher, or its executives. The opinions are not intended to provide specific recommendations or advice for any individual or on any specific investment product. The sole purpose of this opinion piece is to provide education about the wealth management industry.

Disintermediation is not a new concept in banking and wealth management. DIY investing grew substantially in the 1970s and 1980s. The introduction of discount brokerage (Charles Schwab in 1975) helped propel its growth. As did the decline of pensions and the rise of 401ks and self-directed retirement. Despite fears, the wealth management industry grew.

Disintermediation along with other “threats” continue to unnerve the wealth management industry. We explore three big changes that, while discussed as threats, are more likely growth opportunities.

Mobile Is Creating More Potential Clients

The introduction of mobile banking in 1999 distanced consumers from the bank lobby. That accelerated between 2007 and 2010 when iPhone and Android made their respective debuts. The mobile apps that have followed since have driven ever more direct access to investing and banking.

Stop and think about that for a moment. When this firm Blueleaf was founded shortly after the 2008 financial crisis, mobile app technology was in its infancy and the web itself was just coming into its own. Fifteen years later, thousands of advisors and their firms rely on this firm’s client mobile app to deliver one of their core client experiences.

Mobile apps were also instrumental in the rise of robo-advisors in the last decade. Betterment wouldn’t have 615,000 users if they weren’t available on mobile. Wealthfront, their nearest competitor, has 440,000 users. Many of them are folks who wanted to invest but who otherwise may not have. 

That last sentence is really the point. Mobile is growing the investing and banking pie. As a result, it’s growing the pool of potential clients for wealth management. The apps are capturing users that might not otherwise engage with advisors at all.

Engage up to 90% of your clients every single month with Blueleaf.

The all-in-one wealth management platform with best-in-class advisor and client experiences in reporting, billing, and rebalancing. Don’t wait to engage your clients, improve satisfaction and simplify your business.

Learn more...

Blockchain Is Driving Transparency and Lowering Cost

On October 7, 2020, the International Banker (IB) published an article titled, “Is Disintermediation the Future of Finance?” The unnamed author, makes some interesting points about distributed ledger technologies, cryptocurrency, and peer-to-peer lending. It’s well written, but it’s basically promoting Bitcoin and DeFi.

Bitcoin and cryptocurrency are interesting but the important technology is what it’s built on. Blockchain, the technology behind it, is where the change in wealth management is happening. You can learn more about it on the Augmented Advisor podcast. Blockchain is a Distributed ledger technology (DLT). DLTs and non-fungible tokens (NFTs) are creating new options to manage custody with far less need for third-party processing. This could disintermediate traditional custodians and lower costs.

DLTs eliminate the need for third parties to manage transactions and keep records because the DLT itself is actually a public record. They also provide an auditable common ledger to satisfy compliance officers. When fully implemented in wealth management, distributed ledgers could offer ultra-low cost, fully transparent trading, custody, and other business transactions. Blockchain makes that possible.

Recently, an artist called “Beeple” created a piece of digital art as a non-fungible token and sold it last March for $69 million. That was possible because of Blockchain and its ability to create one-of-a-kind digital assets. The technology will give advisors the ability to hold stored value assets in an easily transferable form. Moving those assets via DLTs means no transaction fees. Imagine the possibilities.      

Retail Micro-Trading Is Growing the Pool    

In March 2015, I started to hear about a new player in retail trading. A previously obscure trading platform, Robinhood, launched its mobile app. Using a business model that relied on Payment for Order Flow (PFOF), they did more than just offer direct investing. They offered no-fee trading.

I’m guessing I don’t need to get into the impact Robinhood’s approach had on wealth management. We all saw TD Ameritrade and Schwab go to no-fee trading and eventually merge together. Again, this “threat” appears now to be expanding the market. Attracting people who wouldn’t have been investing otherwise. By expanding savings and investing access these platforms are growing wealth management’s future client base.

Smart Technology Usage Turns Threat to Opportunity

Wealth managers considered Robo advisors a threat for years and are now using them as a tool to offer holistic services. You can now brand Mobile apps with your company name and logo and deliver a state-of-the-art client experience. That means you are the primary differentiator.  

Remember this term: Tech-Enabled. It must describe your firm. With you at the helm as the differentiator-in-chief, the technology we’ve described here can:

  • Streamline your workload;
  • more effectively communicate with clients; and
  • scale your practice.

Automation is already available to you. Blueleaf can help you sort it all out.


  • Kevin D. Flynn

    Kevin D. Flynn is a former Head Coach at Blueleaf and founder of Flynn Consulting, LLC, a business and financial coaching service for startups and small business owners.

Get NEW posts and shows delivered to you.

The Augmented Advisor blog and podcast help financial advisors learn ways to improve their business with in-depth content from the industry's leading thinkers

We don’t spam! Read our privacy policy for more info.

Kevin D. Flynn is a former Head Coach at Blueleaf and founder of Flynn Consulting, LLC, a business and financial coaching service for startups and small business owners.
icon-angle icon-bars icon-times