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The Stewardship of Wealth: Successful Private Wealth Management for Investors and Their Advisors, + Website by Gregory Curtis

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Open Architecture as a Disruptive Business Model in the Advisory World

One of the most important steps a family can take if it wishes to preserve and grow its wealth over time is, of course, to find the right advisor. For years this was difficult, bordering on impossible, because every firm in the advisory business was really just trying to sell something. But all this changed dramatically in the 1990s when open-architecture advisory services became available to families. To give families some perspective on this important—indeed, revolutionary—event, this chapter will describe the impact of open architecture not so much on families, but on the industry in general.1

What Is Open Architecture and Why Is It So Important?

Open-architecture financial advisors offer family investors objective, unconflicted advice because they have separated the business of giving advice from the business of selling proprietary investment products. This advisory platform has powerful appeal to investors.

Investors searching for advisors today will find that the open-architecture revolution has had a profound effect on the way that even the most traditional financial advisors now do business. Understanding the impact of open architecture can help investors make more informed decisions as they navigate their way through the financial services minefield.

A “disruptive business model” is one that blindsides existing competitors in an industry so completely that they are largely unable to defend against it, ...

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