Product Manufacturers and Wealth Management: A Meeting of the Industry Minds

In this blog post, Joanna Kanakis, SVP, Institution Business Development and Head of Product Manufacturing, shares how players across the industry are adopting holistic services for the benefit of clients.

Traditionally, insurance providers, asset managers, retirement plan providers, and wealth management firms have worked in a Venn diagram, overlapping but operating in distinct ecosystems, technologies, and value propositions to their end clients. Yet in this ever-evolving industry, we are starting to see them come together.

While they have nuanced differences in how they approach financial services, their goals align — protecting clients' assets, helping them achieve financial success, and effectively managing wealth to pursue their financial goals.

Insurance companies, asset managers, and retirement plan providers have historically focused on developing products. That has changed. Clients are demanding more holistic portfolio solutions. In response, insurance companies are expanding into asset management strategies like ETFs, while asset managers are managing broader areas of their clients’ portfolios. Retirement firms are evolving beyond the 401k and 403b space to focus on post-employment wealth.

Many insurance providers and asset managers have legacy direct model businesses. That means they distribute their products directly to an investor, which makes them easier to access. This has led to a convergence of insurance and asset management into the realm of wealth management. And their clients benefit from a more comprehensive suite of services.

Wealth management is going through a significant transformation too. In its expanding role, advisors are moving from delivering financial advice to equipping clients with the tools and strategies needed to achieve their broader life goals. This change in approach has led to advisors reimagining how clients are served, what solutions fit their unique needs, and how they can deliver these services.

The Advantages of Bringing It All Together

As these institutions come together, clients — and the industry — benefit.

First, it enables holistic financial planning. Advisors can consider all aspects of a client's financial wellbeing. Advisors can provide more personalized strategies, considering not only investment strategies but also risk management and insurance needs.

Second, it fosters innovation and the development of new products and strategies. For example, as insurance providers and asset managers collaborate, they can leverage their respective expertise to create innovative strategies that address the evolving needs of clients. This collaboration also promotes healthy competition, driving the industry forward.

Furthermore, it improves accessibility. By expanding direct models and providing individual investors with simpler access to insurance and asset management strategies, wealth management becomes more inclusive and accessible to a broader range of clients. This democratization of financial services helps empower individuals to take control of their financial futures and pursue their goals.

LPL Financial’s Vision

LPL recognizes the changing dynamics of the financial industry and sees a greater opportunity to create a cohesive ecosystem that supports all four businesses — insurance companies, asset managers, retirement plan providers, and wealth management