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The Rise of the Call Center Advisor

“If I were a single-digit millionaire tossed out of the “paradise” of private banking, I’d walk away from that bank altogether. They don’t want me? Heck, I don’t want them either.”– Suzanne McGee, Money US Financial Journalist.

The investment management industry is experiencing a dramatic change led by regulatory reform, disruptive technology, lower fees, and greater transparency (see Amazon Treatment is Coming to Wealth Management& 3 Steps to a Better Investment Industry).  Unfortunately, there are still plenty of firms that would rather play shadow games with clients rather than face the new reality.  The rise of the call center financial advisor can be a good thing if you signed up for it, but could be disastrous if you’ve been cast off like a ship in the night.

For simplicity, we will break down call center financial advisors into two groups; Low-Cost & Cast-Offs.  As you might guess, one is appropriate and reasonable, while the other is a disservice to the client and potentially hazardous to your wealth. 


In our opinion, Vanguard and Charles Schwab have been the leaders at providing investment management solutions at reasonable costs.  For ~.40%* (less than half of one percent) the service includes remote portfolio management and customer service.  Clients over certain asset thresholds may have access to financial planners.  In our opinion, the service works great to get professional advice at a low cost.  This would be appropriate for investors with straightforward investment and planning needs.  The downside is the client will not receive personalized attention.  The advisor is likely playing defense to client requests due to high relationship numbers (investors complain about poor Vanguard service).  The investment portfolios will be on automated models with limited or no bandwidth to customize.  Reading between the lines, it’s tough to imagine top investment talent signing up to serve as a client service rep with limited ability to construct portfolios or develop meaningful personal relationships.

Cast Offs

It’s no secret publicly traded firms are constantly under the microscope from shareholders, board of directors, and Wall Street to maximize revenue.  This has led several industry leaders to question if public firms can also be fiduciaries (John Bogel Slams Fiduciary Foes & Share Prices of Broker Stocks fall once DOL rule affirmed for June 2017).  We have seen a trend of large firms punting “smaller” relationships (<$3 million…and in some cases <$10 million) to call centers.  The portfolios are placed on black box models, often heavily invested in mutual funds.  The service is outsourced, and personal connections are reduced to the occasional phone call.  Clients who once enjoyed personalized, local service have been exiled off to call center Siberia.  It’s one thing to sign up for such a service and pay a fee commensurate with the value provided.  It’s another to pay up for “white glove service” and be shifted to a cubicle farm that would pass for an AT&T training office.

The “strategic” thinking from the establishment goes like this:  Never mind the “smaller” accounts will receive inferior service; we will keep them at full fee and load up each call center associate with hundreds of accounts (what qualifies as a high net worth investor?).


By focusing resources on high net worth investors ($10 million+), firms obsess over maximizing the profitability of each relationship (cross-selling mortgages, lines of credit, credit cards).  Another tactic is dangling the proverbial carrot for the client to consolidate outside assets to obtain or maintain the highest level of service.

If your wealth management relationship started in your community, but is now serviced in a zip code you don’t recognize, it’s time to start asking tough questions.  Why am I paying a premium for a call center experience?

*Approximate cost for management fee and ETF expense ratios.  The actual fee will vary by asset allocation. 

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