Investment from private-equity firms has poured into the wealth management industry in recent years, but there are pros and cons to the trend, explain our columnists. PE sponsors are getting mixed reviews for their impact on practices and clients. One concern is that PE backing can lead to more pressure to cut costs during market downturns. Some industry execs say, however, that PE sponsors have helped by professionalizing their firms, enhancing governance, and providing the capital necessary to grow.
In other most-read wealth management articles this week:
A pay cut for Schwab’s CEO. Walt Bettinger, the chief executive at
suffered a decrease in total pay in 2023 as the brokerage firm took a hit to earnings. Bettinger’s total compensation fell to $23.9 million for 2023 from $24.4 million the previous year, according to the company’s proxy statement. CFO Peter Crawford, COO Joseph Martinetto, and founder and Co-Chairman Charles “Chuck” Schwab also saw their total compensation fall, largely due to decreases in incentive pay.
What to do when clients say they’re splitting. Helping clients navigate divorce is one of the most challenging tasks financial advisors face. In this Barron’s Advisor Big Q, we asked four advisors how they handle it. They emphasized listening attentively to clients as they recount what they’re going through, not taking sides when one is advising both spouses, and suggesting a client seek therapy to process the trauma of divorce.
The power of a tax-efficient portfolio. While money managers often focus on pretax returns, financial advisors need to emphasize after-tax returns, one of our columnists writes. One way to improve after-tax returns is by structuring portfolios to generate long-term, not short-term, capital gains. It’s also important to plan ahead for the expiration of elements of the Trump tax overhaul, notably the expansion of the estate and gift tax exemption, which sunsets at the end of 2025.
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Edward Jones’ new leaf. Plenty of change is afoot at Edward Jones, which is more than a century old. After the company opened up the possibility of forming teams 18 months ago, more than 1,600 Edward Jones advisors are working with other advisors or sharing office space, the firm’s head, Penny Pennington, tells Barron’s Advisor. Edward Jones also has been introducing new software tools and upgrading existing technology to improve advisors’ capacity to serve more clients.
Carson hands reins to new CEO. Ron Carson, an RIA pioneer whose namesake wealth management firm has grown to $35.5 billion in assets under management and serves approximately 50,000 families, is stepping down as CEO. Burt White, a former LPL executive who joined Carson Group two years ago, will take over the top job. “It’s unanimous—the board, myself, and my family are all really excited about bringing on Burt as CEO,” says Carson, who will stick around in a new role as chairman.
