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From Product Distribution to Customer Success with Rich Arnold

By 4 March 2022January 9th, 2023No Comments

Proper innovation in the delivery of financial planning and wealth management centres around a customer success model, according to wealth management specialist Richard Arnold.

In the first episode of Financial Simplicity’s podcast series “How Investing is Evolving,” our Founder and CEO, Stuart Holdsworth, interviewed wealth management specialist Richard (Rich) Arnold. In this interview, Stuart delves into Rich’s vast experience in the industry, the key structural changes that have led investors and advisers to today’s technology-driven and customer-centric era, and hints to where the future may be for the wealth management industry.

Rich said the wealth management industry is moving from a product distribution model to a “customer success” model. He highlighted the “very active engagement in the customer’s own objectives is what we’re heading towards and the idea of having a financial planner setup a plan and then measure the success of the customer, the success of the business, not by its own financials but what the customer says about it.”

He added several industries have accomplished this customer success model, largely led by disruptors rather than the legacy players. He explained management teams must have “the vision and understanding to self-disrupt but to self-sacrifice the legacy revenue streams with new products, new approaches, new customer relationships, new teams whose purpose is to put the old business out of business”

Touching on innovation and disruption, Rich pointed to the automobile industry, looking at the success of Tesla. Rich pointed out that the industry knew for some time that it had to move away from fossil fuels, however, the big players like Toyota, General Motor, Ford, and Mercedes who could have led the way in the transition to electric vehicles didn’t do this.

“Tesla started from nothing and is now a multi-billion dollar company and they have forced all the legacy players to bring electric cars into the market. But, as of this year the percentage of all electric cars made in the world, 79% of them are Tesla and all those other companies only have 20% market share now,” he explained.

Returning to the wealth management industry, Rich said “proper innovation in the delivery of financial planning and wealth management services around the right next generation, technology business model, customer engagement model, you can have 80% of the market because the legacy people will lose theirs… If you see the turmoil, difficulty, and degree of disinvestment or underinvestment going on by the AMPs or the four big banks or even Perpetual, the companies that have dominated this industry are realising that they don’t know how to do the next phase. They are exiting.”

You can listen and download the full episode of our How Investing is Evolving podcast here.

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Stuart Holdsworth

Author Stuart Holdsworth

Stuart has over 30 years of experience in the use of technology for the strategic competitive advantage of businesses in the financial markets and investment industry.

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