That was the message to independent advisers here, at Schwab Institutional's 10th annual Impact conference, where "think fast" was the slogan for the three-day event. Some 1,200 fee-based investment advisers flocked to Denver this week to hear industry experts' insights into the advisory business and to check out the latest in technology, products and services from some 230 vendors.

With their business moving increasingly faster, financial advisers were told, "speed is the variant." In other words, if advisers don't anticipate their clients' needs, someone else will. The message came across loud and clear, both in the banners that plastered the Colorado Convention Center during the meeting, and in the remarks of many of the event speakers, who urged attendees to toss conventional business wisdom out the window.

"What made you successful today isn't what will make you successful tomorrow," Oren Harari, a leading management consultant and author, told listeners in a Wednesday morning session. Several speakers echoed similar sentiments throughout the event.

In the opening general session Monday, Schwab executive vice president and chief strategy officer Daniel O. Leemon shared statistics with attendees that paint a rosy picture for financial advisers.

The investment management industry is booming. Investable assets in the U.S., which reached $16.9 trillion at the end of 1999, are expected to skyrocket to $27.2 trillion in 2004, and $43.8 trillion in 2009, Leemon told attendees. And, he noted, most of the Baby Boomers haven't even entered their prime investing years.

What all of this adds up to, by most accounts, is a huge opportunity for independent financial advisers. "The best is yet to come," Leemon reassured listeners.

"There's a huge opportunity in the Baby Boomer segment for advisers," Schwab spokesman Lance Berg said. "A lot of those individuals are modest people who saved over time, and aren't part of the segment of 22-year-old overnight millionaires. Those investors will need more assistance as they face more complex issues."

But the bad news is that competition for clients is increasing at lightning speed, and clients are getting more demanding.

"Everyone wants a piece of the pie," Berg said. "Competition is getting fierce."

"Personalized service and advice is investment advisers' niche," he noted. "Investors can go to a number of places to get help with investments. Advisers know their clients' needs. They know what clients want. That's their advantage."

In order to prosper as competition for clients stiffens, advisers will not only have to change the ways in which they deliver their services, but also the services themselves to stay ahead of the curve. Leveraging technology to become more efficient will play a huge part in advisers' success.

For its part, Schwab Institutional this year will invest $54 million in technology, according to Berg, while Schwab will spend an overall $400 million on developing technology.

In spite of increased competition, Berg says, the outlook for advisers is good. "We see the (investment management) market growing over the next ten years," he said, adding that Schwab Institutional has had annualized growth rates of 40 percent over the past five years.

While it is urging the advisers that work with firms to prepare for the future, Schwab itself has been focusing on repositioning itself to respond to the changes in the financial services market.

Schwab this year acquired online brokerage CyBerCorp to leverage the firm's trading technology, rather than building its own. The firm also recently merged with U.S Trust, a New York-based wealth management firm with $143 billion in assets under management. The move sparked concern among Schwab's independent investment advisers who feared competition from the firm for wealthy clients.

"The marriage between Schwab and U.S. Trust offers lots of opportunity on both the retail and institutional side," Berg said. "On the institutional side, we're offering advisers access to U.S. Trust research via Web casts. We're working on an administrative trustee product which will be piloted in the fourth quarter, where advisers can offer trust services. The assets are custodied at U.S Trust and the administrative support is handled by at U.S. Trust, but the adviser keeps the relationship with the client."

Schwab is also eyeing adding private banking services and adding alterative investment options, Berg said.

Berg acknowledged advisers' concerns over the U.S. Trust deal, conceding that, "yes, there is some competition. U.S. Trust is in the investment advice business."

"But if you look at the entire marketplace, Schwab has about 5 percent market share (of investable assets). Advisers have 2 to 3 percent, and U.S. Trust has about 7 to 8 percent," he said. "There's still 85 percent market share not touched by Schwab, advisers, or U.S. Trust."

In other words, there's enough business to go around.

New assets coming into Schwab have reached about $30 billion so far this year, according to the company. Total client assets held at Schwab last month surpassed the $1 trillion mark. The 6,000 investment advisers that do business with Schwab Institutional manage about 25 percent of that.

In the conference exhibit hall, Schwab unveiled demos of its latest technological innovations in the exhibit hall. Impact attendees got an exclusive glimpse at the latest technological innovations in development at the firm, including a biometric login, where fingerprints replace usernames and passwords. Other technology that could be coming down the pike for advisers includes a three-dimensional portfolio analysis tool, improved wireless technology that would enable advisers to access information from SI on Palm Pilots, cell phones, and two-way pagers, electronic signatures, an IM reference site that would provide real-time balance and positions on the advisers' site, and Virtual Vault, a secure file-sharing system. Schwab said all of the demos are in the development stages, and there's no time frame for when the technologies will be available to advisers.

In between sessions, mutual fund firms from AIM to Warburg Pincus, investment research firms, money managers, and software companies showed off the latest in products and services for investment advisers. More than 200 portfolio managers were on hand to meet with attendees.

Forty professional education sessions ensured there was something for everyone. Sessions topics included charitable giving and wealth transfer strategies, best practices in tax efficient investing, strategic ways to grow your business, retirement strategies for the affluent, maximizing the Internet, and the future of technology stocks and the market. Highlights included keynote speakers Senator John McCain, former Secretary of Labor Robert Reich, and basketball legend Earvin "Magic" Johnson.

-- By Melissa Klein

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