Wealth Management Industry Sees Efficiency Concerns and Headcount Growth
What happened
Bank of America's CEO noted that the firm's wealth management division shows progress but is considered its "least efficient" arm. Edward Jones' latest filing indicates progress toward Penny Pennington's goal of increasing advisor headcount by 1% to 3% annually. Industry experts also noted that technology is making traditional advantages in financial planning common property, leading to calls for a standardized custody fee.
Why it matters
The industry is undergoing structural changes, with technology eroding traditional competitive advantages in wealth management. This shift, combined with internal efficiency critiques at major firms, is driving consolidation and prompting calls for regulatory changes regarding custody fees.
Who's involved
- Bank of AmericaAmerican multinational banking and financial services corporation whose wealth management arm was described as 'least efficient'.
- Edward JonesAmerican financial services firm pursuing growth targets for advisor headcount and raising capital.
- Penny PenningtonAmerican businesswoman who is driving Edward Jones' goal to increase advisor headcount.
- Morgan StanleyU.S. investment bank whose head of wealth management noted the impact of technology on industry advantages.
Who could feel it
Possible knock-on effectsThese are possibilities Brind reasoned out, not predictions, and not advice. Most are not stated in any report.
- Morgan StanleySpeculative
Competitors of Bank of America might gain market share as Bank of America's wealth management arm is described as 'least efficient'.
- Edward JonesSpeculative
Edward Jones might see increased labor costs or expanded service capacity due to its goal of increasing advisor headcount by 1% to 3% annually.
How it developed
Newest first. Tap a step to see who reported it.- Bank of America's CEO reported progress in the firm's wealth management division.Sub-event
Details BofA wealth management, Penny Pennington's headcount goals, and LPL's interest in Commonwealth Financial Network.1 source
Keep exploring
The entities involved
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Bank of America
American multinational banking and financial services corporation
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LPL
Nothing else this week.
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Commonwealth Financial Network
American investment advisor firm