Burt White: Advisors' Coasting Days Are Over

The longest bull market in history, 2009-2020, was exhilarating, if not wealth-enhancing and a giant boost to advisor assets under management. But clearly times have changed — big-time. 

Hence, advisors must seek organic growth, like growing wallet share and acquiring new clients. 

If they don’t, “they’ll start to see stagnation,” argues Burt White, managing partner and chief strategic officer of Carson Group, in an interview with ThinkAdvisor.

Further, because more and more folks are entering the spending phase of retirement, advisors “won’t see current clients as deliverers of additional assets but as detractors — they’ll be taking assets out,” he says.

White, 53, joined Carson this past April after 14 years as managing director and chief investment officer at LPL Financial.

Part of his mission at Carson, whose 120 partner advisors manage $20 billion in assets, is to “redefine how the industry shows and talks about wealth,” the firm has stated.

“Making sure that we build the ecosystem to support that is [Carson’s] biggest priority,” says White, who earlier was director of research at Wachovia Securities and a Mercer Investments analyst.

Speaking by phone just before kickoff of Carson’s Excell 2022 conference in Las Vegas, White stresses that advisors must catch up with today’s and tomorrow’s investor needs.

“The new superpower is ‘unlearning,’” he says in the interview. “The advisors that are going to grow the fastest and be the most successful are the ones that will be able to ‘unlearn’ to adapt to consumers’ new expectations the fastest.” 

White discusses too how to solve the “capacity crisis” advisors face in their practices via partnering in areas like “outsourcing, automating and elimination.”

His rosy forecast for this fourth quarter 2022: “The market [will] be at higher levels … We’re going to avoid a recession … The Fed will orchestrate a soft landing.”

Here are highlights of our interview:

THINKADVISOR: Carson Group has been growing by leaps and bounds. Why is the firm putting so much emphasis on growth at this point?

BURT WHITE: [A recent Schwab study] said that the average RIA grew [AUM] at about 14%. But about 12% of that was the market. My guess is that the market isn’t going to give 12% [every year] over the next five years.  

If advisors aren’t growing wallet share, getting new clients and creating organic growth, they’ll start to see stagnation.

Any other reasons?

For the first time, there were just as many clients taking money out of their portfolios as they’re putting in, according to a Cerulli report, I believe. 

“Many people are getting into the decumulation phase [of retirement]. We’re at a tipping point and won’t see current clients as deliverers of additional assets but as detractors — they’ll be taking assets out.”

That’s going to hurt advisor growth. So the average advisor’s client base, who is older, likely won’t  help as much as before. 

That means we’ve got to help advisors find the time to add more clients and grow faster.

In what other ways can advisors improve their practices?

Consumers’ needs are evolving faster than the advisor is. So the new superpower is “unlearning” — not learning new stuff but “unlearning” stuff that we learned before.

The advisors that are going to grow the fastest and be the most successful are the ones that will be able to “unlearn” and adapt to consumers’ new expectations the fastest.

Doesn’t experience count?

Our experience is expiring. Experience doesn’t make us perform or deliver better; it just gives us a false confidence because it worked before.

You’ve got to know which part of your experience is key. What part has a shelf life of a Twinkie, and what part is like yogurt and expires? 

The stuff that’s yogurt, get rid of. The stuff that’s a Twinkie is part of your value proposition. 

What more can advisors do to make their practices up to date and therefore run better?

Find a way to reduce their capacity crisis. A study says that the average American does 31 hours of stuff a day, including 7 hours of multi-tasking. Advisors are probably doing 40 or 50 hours of stuff.

How should they be dealing with this crisis, then?

Partnership is the new expertise. You don’t have to learn everything or be an expert in all things. You partner — with the right partner.

You do this through things like outsourcing, automating and elimination.

But there are many [functions] that no one but the advisor can [perform], like having a human heart- to-heart conversation with clients.

Your mission as chief strategy officer is to “transform Carson’s investment platform for scale and advance its digital client experience to redefine how the industry shows and talks about wealth,” according to a Carson press release. Please explain.

We want to be the place where models-based practices come to thrive. These are advisors that are looking to thread the needle between personalized strategies and scalable models-based portfolio management tools. This is what we’re building.

What about redefining the way the industry talks about wealth?