This past summer, I was on an extended working tour of our Dimensional offices outside the US. During my travels, I spoke with independent advisors from Australia, New Zealand, the Netherlands, Germany, Ireland, Japan, and the UK, and learned more about their business success. Their stories point to the increasing momentum of the independent advice model across the globe.
As a testament to their success, non-US advisors now account for more than $30 billion of Dimensional assets under management (AUM)—an amount exceeding that of the US advisor business from just 11 years ago. For comparison, US advisor AUM at Dimensional stands at $203 billion.1 We expect the independent advice model to continue growing around the world, and we have a keen interest in supporting it.
Why do we expect this movement to continue? One key driver, in my view, is the great energy swirling around the new business model in these countries. The new model stems from the idea that client-centric advice coupled with efficient access to the capital markets (what Dimensional strives to do) is a successful formula for both clients and advisors. When the idea was proposed 25 years ago in the US, many in the financial services industry assumed that anyone using an independent advice model to compete with the commission-based institutions would “starve” before establishing a viable business.
Fortunately for global advisors, US advisory firms have created a precedent for this approach. We can point to Dimensional’s relationship with US independent advisors over the past quarter century and note that we work with many successful advisory firms that we believe have done a masterful job in their efforts to deliver a great client experience while also building their businesses. Success with this model has proved the rule rather than the exception.
The global movement toward independent, transparent, and client-focused advice is underway.
As I like to say, the global train has left the station and will not return any time soon. The solution offered by today’s global independent advisor is the right one and should favorably impact the well-being and wealth of clients around the world.
As Victor Hugo once famously stated, “No army can stop an idea whose time has come.”
-Dave Butler (Dimensional's Head of Global Financial Advisor Services)