19 people who will change wealth management in 2019

December 19, 2018 11:52 AM

While 2019 is set to be a transformative year for wealth management, savvy industry players won’t be content with keeping abreast of new developments. They’ll be spearheading change themselves.

Executives and advisors have much to anticipate with the new year: the SEC is expected to finalize its proposed Regulation Best Interest rule, firms will angle for new M&A deals, and fintech startups as well as others will work to deploy new technologies such as artificial intelligence.

To help you prepare for a year of heady change, we’ve created a cheat sheet of key industry leaders to keep an eye on in 2019. Some are C-Suite executives, but others are advisors and behind-the-scenes insiders.

Written and edited by Sean Allocca, Lee Conrad, Chelsea Emery, Jessica Mathews, Charles Paikert, Maddy Perkins, Toby Salinger, Andrew Shilling, and Andrew Welsch.

CFP Board

Scott Wenger

The CFP Board will be under scrutiny in 2019 as changes to the board’s new code of ethics and standards go into effect Oct. 1. Among the most influential alterations, the board has expanded the scope of a fiduciary requirement for CFP professionals, requiring them to act in a client's best interest at all times when providing financial advice.

The new standards will ripple throughout the planning industry, as the CFP designation has become a must-have for many professionals. Almost 82,000 financial advisors and other professionals hold the designation in the U.S., according to the CFP Board.

The board has also thrown its weight behind initiatives to improve diversity throughout the planning profession. A mere 3.5% of CFP holders in 2017 were black or Latino, according to the board, which has been funding training, workplace culture programs and a summit to raise awareness among diverse communities.

Jay Powell, Fed Chairman

Federal Reserve Board Chair Jerome Powell addresses the Senate Banking Committee

"Inflation has eased notably over the past couple of years but remains above the Committee's longer-run goal of 2%," said Powell via written testimony. <br/>"The Committee has stated that we do not expect it will be appropriate to reduce the target range for the federal funds rate until we have gained greater confidence that inflation is moving sustainably toward 2%." <br/>

Bloomberg News

Since being nominated in February 2018 by President Trump to be the Fed chairman, Jay Powell has been on the receiving end of a parade of barbs from the White House. Indeed, the president has ramped up public pressure on the Fed far more than previous administrations. Powell was able to walk a tightrope through the summer and fall, but then the volatility in the stock market turned into freefall as the year drew to a close — as of Dec. 19, all major U.S. stock indexes were down for the year — putting even more of a spotlight on interest rate decisions. And as the new year dawns, there will likely be more tests for the Fed chief from both the markets and the White House.

Scott Curtis, head of Raymond James’s private client group

Scott Curtis Raymond James executive.jpg

Raymond James’s busy recruiting year recently pushed headcount to a new record: 7,813 independent and employee advisors as of Oct. 31. Will the firm repeat that success in 2019?

It’s one of several tasks before Scott Curtis, the recently promoted head of Raymond James’ private client group. Curtis, who previously oversaw the company’s IBD operations, took on the new role in June as part of several key leadership appointments. A 15-year veteran of the company, Curtis now oversees all of its domestic growing private client group divisions at a time when recruiting has become more challenging due to the exit of two wirehouses from the Broker Protocol. At the same time, new technology is remaking the business and the regulatory environment could undergo a transformation as the SEC considers new standards of conduct for brokers and advisors.

Shelley O’Connor and Andy Saperstein, co-heads, Morgan Stanley Wealth Management

Shelly O’Connor and Andy Saperstein, co-heads of Morgan Stanley Wealth Management

Morgan Stanley’s digital transformation has gathered steam under the leadership of Shelley O’Connor and Andy Saperstein, co-heads of the firm’s wealth management unit.

The wirehouse’s tech initiatives this year included a new dashboard for its roughly 15,000 advisors. Morgan Stanley plans more such upgrades and will also look to advisors to propel its digital strategy (the company added incentives to its 2019 compensation plan). Separately, the firm, which dropped out of the Broker Protocol a year ago, has experienced low advisor attrition. Will that also carry on into next year?

Penny Pennington, principal and 2019 managing partner, Edward Jones

Penny Pennington managing partner Edward Jones

The new year will bring a challenging new opportunity for Edward Jones veteran Penny Pennington, who will replace retiring managing partner Jim Weddle on Jan. 1.

Pennington takes the helm following a long period of growth for the St. Louis-based brokerage; headcount under Weddle’s 13-year tenure almost doubled to 16,000 advisors at the end of 2017 from 9,000. Edward Jones, which has over $1 trillion in assets, will be the only woman-led major employee brokerage in the U.S. Pennington will be tasked with managing the firm’s growth and strategy to adapt to a marketplace being remade by regulatory and technology change.

Gurinder Ahluwalia, chairman and lead director, HighTower Advisors

Gurinder

The former president and CEO of AssetMark is executive advisor to Thomas H Lee Partners, the private equity firm that now controls HighTower at a critical junction in the RIA’s growth.

Gurinder Ahluwalia is overseeing the next iteration of HighTower’s evolution,

following ten years of leadership under co-founder Elliot Weissbluth

. HighTower appears ready to become a more active RIA acquirer, but first needs to lock down the big producing advisors who may have a wandering eye.

Ahluwalia is also a fintech player, co-founder and CEO of 280 CapMarkets, a cloud-based platform for fixed income markets.

Karl Heckenberg, CEO, Fiduciary Network

Karl Heckenberg, CEO of Fiduciary Network

Karl Heckenberg took over as CEO of one of the RIA industry’s original aggregators in November, following the sale of founder Mark Hurley’s remaining 25% of the company to Emigrant Bank. Fiduciary Network has plenty of firepower with 14 high-quality RIAs and around $40 billion in combined AUM. But challenges are also on the horizon, including a lawsuit recently filed by Hurley over the sale. Fiduciary Network is also re-entering an extremely competitive M&A market, following several years of sitting on the sidelines.

Carolyn Armitage, managing director, Echelon Partners

<b> </b>Carolyn Armitage is a managing director at investment bank and consulting firm Echelon Partners.

M&A activity has been hitting record levels across wealth management for the past five years. As insurance firms spin off their IBD holdings and private equity firms buy and sell their portfolio companies, expert RIA and IBD consultant Carolyn Armitage may find herself offering ever more firms a guiding hand next year.

She took on her current role in 2017 and did so with three decades of in-depth experience having worked at independent broker-dealers such as LPL Financial, HD Vest Financial Services, and the Cetera Financial Group forerunner ING Advisors Network.

Katanya Moore, associate general counsel, FSI

IBDs aiming to present their case to regulators and lawmakers have a seasoned expert on their side: FSI’s Katanya Moore.

She came to the influential trade and lobbying group in 2017 after a five-year tenure at FINRA as a counsel for litigation and policy in its regulatory operations division.

FSI’s 100 member firms with 160,000 advisors will depend on Moore’s seasoned expertise next year as the SEC moves forward with its proposed Regulation Best Interest and Democrats take over the House of Representatives.

Joni Youngwirth, managing principal for practice management, Commonwealth Financial Network

When a firm takes home the top marks for any independent firm in J.D. Power’s advisor satisfaction study five years in a row, the keeper of its practice management flame deserves a great deal of credit.

Commonwealth Financial Network’s Joni Youngwirth has been serving in the role for 20 years; it’s a position once held by founder Joe Deitch. In 2019, Commonwealth will continue to expand into new offerings, such as standalone unit serving fee-only advisors who have dropped their FINRA registrations.

“Our job as an infrastructure company is to provide the systems and processes to make it as easy as possible for [advisors] to run their businesses the way they want to run their businesses,” Youngwirth said earlier this year. “Some people say Commonwealth is a broker-dealer. Commonwealth’s an infrastructure company.

Mark Casady, general partner, Vestigo Ventures

The former CEO of LPL Financial is now general partner and founder of venture capital firm Vestigo Ventures. The the Boston-based firm focuses on early-stage fintech companies such as Digital Assets Data, which aims to become the Morningstar of cryptocurrency by providing enterprise-grade tools for crypto hedge funds, and LifeYield, a portfolio software provider that helps minimize clients’ tax bills.

Vestigo Ventures, which has has invested in nine companies so far, recently closed on an almost $60 million in new funding to support fledging wealth management technology companies.

Winklevoss twins, co-founders, Gemini Trust

Cameron Winklevoss, chief executive officer and co-founder of Gemini Trust Company LLC, left, speaks as Tyler Winklevoss, chief financial officer and co-founder of Gemini Trust Company LLC, listens during a Bloomberg West Television interview during the Skybridge Alternatives (SALT) conference in Las Vegas, Nevada, U.S., on Thursday, May 12, 2016. The SALT Conference facilitates balanced discussions and debates on macroeconomic trends, geopolitical events, and alternative investment opportunities within the context of a dynamic global economy. Photographer: David Paul Morris/Bloomberg *** Local Caption *** Tyler Winklevoss; Cameron Winklevoss

David Paul Morris/Bloomberg

Despite repeated failed attempts, Cameron and Tyler Winklevoss are determined to secure the industry’s first bitcoin-based ETF.

The Gemini Trust co-founders will launch a new app in 2019 allowing individual investors to purchase bitcoin and other virtual currencies on their exchange.

Although trading volumes in bitcoin futures, which launched a year ago, have yet to catch on with investors, the twins remain committed in their slow-and-steady approach and will be two people industry players will watch in 2019.

“We’re in this for the long haul,” Tyler Winklevoss said. “We think it’s a space that’s here to stay.”

Valerie Brown, executive chairman, Advisor Group

Photographer: Ray Ng

Advisor Group has boosted its scale to the tune of some 2,500 new advisors this year in the form of acquisition deals under Executive Chairman Valerie Brown’s leadership.

The former Cetera Financial Group CEO is the only member of this year’s list who made it last year as well. The 5,000-advisor firm — backed by private equity firm Lightyear Capital — entered 2018 anticipated to make M&A waves and lived up to expectations with deals that could make it the largest network in the IBD sector.

Industry insiders will be watching closely next year to see where and when Brown and Advisor Group CEO Jamie Price next aim to flex their private equity capital.

Diversity advocates Phuong Luong, independent financial planner, and Laura LaTourette, advisor and leader on LPL Financial’s diversity and inclusion council

One of the largest problems facing the industry is moving to the forefront: It is still overwhelmingly white and male.

As the industry makes renewed efforts to address its shortcomings, expect advocates such as Phuong Luong and Laura LaTourette to help lead the conversation.

Luong, a CFP and founder of Cambridge, Massachusetts-based Just Wealth, shared her story at the CFP Board’s first Diversity and Inclusion Summit in October — and didn’t pull punches.

"I've had white people and people of color tell me, 'Doesn't this information demotivate people of color or discourage change?'" she said. "Learning financial history has confirmed for me the power, strength and resilience for people of color. After all the racist laws, the violence, the theft of community and individual wealth, we are in many ways persisting and thriving."

LPL advisor LaTourette serves primarily LGBT clients, and executives with the No. 1 IBD asked her to serve on its new diversity and inclusion council in 2018.

“LGBT, women, people of color — we felt like we were invisible,” LaTourette said earlier this year. “We want marketing tools, we want articles, we want to have a place within LPL that shows up in a bold way and not just at the end of the day, or something later.”

Noah Kerner, CEO, Acorns

Noah Kerner’s Acorns is poised for growth in 2019 due in part to its latest funding round: a $50 million influx of cash led by the asset management giant BlackRock. With hundreds of thousands of new accounts opened in its IRA program, called Acorns Later, the micro-investing app may be looking to expand into traditional wealth management markets. How Kerner decides to put the new funding to use may have an impact on younger investors. Acorns currently serve more than 3.3 million investment accounts that cost as little as $1 a month, according to the firm.

Kathleen Zemaitis, head of advisor diversity and inclusion, LPL Financial

Rich Taylor

As LPL seeks to transform its culture on a number of levels, Kathleen Zemaitis is leading its efforts to make it more open to advisors and clients of all backgrounds.

She tapped 18 representatives for the diversity and inclusion council launched by LPL this year. Under Zemaitis, the firm is gathering feedback and connecting advisors with one another, along with resources for serving diverse communities.

LPL’s position in the marketplace as the longtime No. 1 IBD gives its programming special importance as the industry seeks to better reflect the nation’s demographics while addressing the looming retirements of much of its advisor force.

Steve Booth, CEO, Baird

Baird is acquiring Hilliard Lyons, a deal expected to close next year and which has the potential to boost Baird’s current headcount of roughly 850 advisors by about 44% — if CEO Steve Booth and the executive team at Baird successfully entice 380 Hilliard Lyons advisors to sign on with their new employer.

Baird and Hilliard Lyons share similarities such as size and culture that will ease the transition, according to recruiters. Still, acquisitions are never easy. Industry insiders — and competitors — will be watching to see whether Hilliard Lyons brokers stay put.

Gregory Fleming, CEO, Rockefeller Capital Management

Greg Fleming, chief executive officer of Rockefeller Capital Management, speaks during a Bloomberg Television interview in New York, U.S., on Tuesday, Dec. 19, 2017. Fleming, a former top executive at Morgan Stanley, joined the Rockefeller family office to create a wealth-management firm backed by Viking Global Investors. Photographer: Christopher Goodney/Bloomberg

Christopher Goodney/Bloomberg

The former president of Morgan Stanley Wealth Management started a new act this year by spearheading the Rockefeller family’s ambitions of building out a new advisory operation aimed at wealthy clients.

Under Gregory Fleming’s leadership, Rockefeller Capital Management has recently recruited executives with deep experience in the wirehouse and independent channels. The company has also landed some of its first advisor recruits, including two brokers who oversaw $2.2 billion at UBS.

Industry insiders will be looking to see if Fleming’s new firm can land more elite advisors next year.

Bill Crager, president, Envestnet

Envestnet is poised for new growth and innovation in 2019 thanks to $123 million in funding it recently received from BlackRock, the world’s largest asset manager.

How that funding gets used may have a big impact on the industry as Envestnet serves more than 92,000 advisors and 3,500 companies including some of the largest U.S. banks and wealth management firms. The partnership also gives the Envestnet platform access to BlackRock’s Aladdin risk analysis software as well as other upgrades such as retirement planning tool iRetire.