Transcript
Introduction
Patrick
My guest this week is Michael Kitces, who is one of our industry's go-to experts on all things financial advice and financial planning. We discuss the past, present, and future of financial advice, financial technology, and investing. If you are a financial advisor or use one, this conversation is full of great history and perspective. Please enjoy.
I would love to begin with a sort of history, if you will, of the financial planning or advice model, If you could maybe tick the major stages of evolution that that model has gone through, and then we can begin by talking about where you think it might be going in the future.
Michael
As I view just our world of financial advisors, I think we've essentially gone through three stages of the business of financial advice, and we're on the cusp of the fourth right now, which I'll talk about in a few minutes. Stage one is our roots. If you were a financial advisor 40 plus years ago in the investment business, you were a stock broker, which back in the 70s on a sizeable trade you could get paid as much as about 200 bucks a trade in 1975 dollars to execute a trade. It was a very lucrative business for the people who were good enough to get a book of clients to whom they sell some stocks.