They don’t call the Schwab IMPACT Conference, the “Financial Super Bowl” for nothing. The conference continues to be a “must attend” event for the planning industry as the caliber of keynote speakers, workshops and panels/debates is unprecedented.

This year was no different. Over IMPACT’s four days, the sheer wealth of knowledge presented was unmatched. From practice management and new planning technologies to portfolio strategy and economic outlooks, IMPACT had it all.

The problem is, there’s so much information available it can sometimes be a bit daunting for the more than 5,000 attendees to take in. Which is where we come in. As part of MutualFunds.com’s coverage of the event, we’ve dug into the conference’s key learnings and pulled out some of the most important pieces of information for you.
 
With that, here are some of the main themes and knowledge highlights from the event.
 
Check out our Schwab IMPACT 2019 Channel to catch the highlights from the event.

As a brokerage and planning platform, Charles Schwab (SCHW) has long been a big user of technology. As a result, its IMPACT Conferences have also been a top place for advisors to learn about new technologies, software and applications for their practice. This year’s conference was no different – with key speeches and workshops focusing on AI, cloud computing and integration of tech into an RIA practice.

Schwab’s Managing Director of Digital Advisor Solutions Kartik Srinivasan mentioned some of the key changes for advisors using Schwab’s platform. This included automating many account-related tasks, eliminating paperwork and digitizing portfolio management for items such as tax-loss harvesting and asset allocation. Srinivasan also highlighted that Schwab’s new single sign-on option will allow advisors to not only use Schwab’s applications but a host of other third-party tech products via one login.
 
Srinivasan’s talk highlighted the general theme of advisor technology at IMPACT. The idea of leveraging technology in a practice is designed to improve efficacy and automate back-office tasks. Aside from providing faster service and producing fewer human-related errors, the general technology for advisors is designed to get them out from behind stacks of paper and in front of clients. Financial advisors can actually once again do more “advising.” Key examples of this from IMPACT was InvestCloud’s Goals-Based Planning applications that help advisors run scenarios for clients’ actual goals as well as Adhesion Wealth Advisors products designed to help outsource portfolio management.
 
Overall, the idea is that technology can be used to simplify many tasks in a RIA practice.

The so-called fee war was front and center at IMPACT this year. Low-cost index funds started the trend toward reducing investor fees and the recent decisions by Schwab, Fidelity, TD Ameritrade and others to cut trading commissions to zero have ratcheted up the battle. But while broker-dealers may suffer, RIAs and other advisors may see some opportunities in the new zero-commission world. Two of the biggest could be the birth of direct indexing and tax-loss harvesting potential.

One of the biggest hurdles for direct indexing – or building custom portfolios of stocks – was that commissions would be high for rebalancing purposes or nearly impossible for smaller investors. Schwab CEO Walt Bettinger talked about this fact at IMPACT when he said “There are barriers to investing: The person starting out saving $100 a month, they can’t have 20% to 25% of their principal taken away for commissions.” But with no fees for this, direct indexing is now a possibility, especially when leveraged with automated portfolio management.
 
This is true for the second point as well. For smaller to medium investors, the opportunity for efficient tax-loss harvesting wasn’t possible with commissions on sales. Now tax-loss harvesting can be done for any investor.
 
Throughout IMPACT, the idea that zero-commissions can be used as a vehicle for advisors to go independent was also discussed. There’s no need to be tied to a larger organization as there are now zero barriers to entry.

There’s always been a sort of battle between the RIA sector and those firms operating under a broker-dealer (BD) model. With the rise of fiduciary rules, zero-commissions and general public knowledge, RIAs seem to be winning the fight. This was discussed at IMPACT as many broker-dealer operators have started to move into RIAs territories.

XY Planning Network founder and blogger Michael Kitces talked about BDs and their moves into the planning space at IMPACT. Kitces showed cause for caution as RIAs are now facing increased competition from BDs and banks as they provide many of the same services. This has shown up in some RIAs seeing lower growth rates. Kitces’ advice was that “generalist” advisors need to specialize and find a competitive niche to provide real value.
 
Kitces’ view was echoed at IMPACT by JMP Securities who noted that wealth managers, banks and brokerages have realized that there are other avenues to monetize operations besides charging commissions on trades.

IMPACT has also been a great place for advisors to learn about the latest regulations facing the industry. And since the financial crisis, that regulation has been hot and heavy.

This year focused on two major rules from the SEC. This includes Form CSR (consumer relationship summary). Starting next year, the SEC is requiring that advisors and broker-dealers to create a two-page maximum sheet that must be given to retail customers that will highlight fees, conflicts of interest and other information. The key is that is that right now the industry has an unlimited number of pages to make their case. Advisors need to make sure they don’t leave anything out.
 
The second piece of SEC regulation was new advertising rules designed to modernize the Investment Advisers Act. Thanks to the rise of social media, digital ads and other avenues, the SEC is finally starting to take a hard look at expectations of investors seeking advisory services via new ads.

Schwab’s Bernie Clark also highlighted why the planning industry is a great place to build a career. Through several talks and presentations, Clark highlighted the growth in the industry and that the registered investment advisor sector has tripled in size since 2009. Moreover, thanks to new tech and continued advancement, there’s still plenty of opportunities for advisors to grow and enter the space. The power of advice, platform and investment complexity are all tailwinds propelling growth. According to Clark, now is one of the best times to become independent and enter the industry.

In the end, IMPACT 2019 lived up to its moniker as a top spot for advisors to gain valuable knowledge. Common themes such as new technology, zero-commissions and new regulations helped define the conference.