Speaking at a Blackrock hosted future of wealth management event, Smith said too many big firms were “arrogant”.
A serial acquirer and pension provider, Embark group companies include Rowanmoor, Vested, EBS, Hornbuckle, The Adviser Centre and Avalon.
Smith believes the industry is trapped in a state of inertia and that the complacency is about to be shattered by generational trends and the adoption of technology.
Brands which had previously held sway, he said, are now much shorter duration and more portable.
He was also extremely critical of chief executives paying lip service to technology.
“Regulation is not driving change [in the advice sector], it is a bit of a side show for inertia in wealth management among IFAs, private banks fund managers or platform providers,” he said.
“There is nothing wrong with regulation, it is relatively easy to meet and it is there for client protection.”
On fintech, he said: “Everybody is talking about it, but they are doing it because they feel they have to and they are having conversations they don’t understand.”
Demographic changes
He predicts the big change will come from demographics.
“Gen X and Y are much more interactive, much less trusting and much more in need of education, much more non-accepting of complexity. Fundamentally, they are much more interested in outcome based things not product based things.
“Over the next 10 years, it is going to be a huge influence.”
He continued: “The second factor is trust. People used to trust scale, brands and people by which I mean skill.
“This is where technology comes into play because they trust themselves more and robo is about how you latch onto that trust with outcome based products.”
He argued organisations which did not recognise the change and take the lessons from the Retail Distribution Review “nudge” should be justifiably frightened.
Before joining Embark in 2013, Smith was managing director and global management committee member at Barclays Wealth, where he helped develop the bank’s global wealth infrastructure. He has also held roles at Fortis Investments, Arthur Andersen, Prudential, M&G and Prudential Corporation Asia.
