Financial advisors are hired by clients to do financial planning and management for them. Financial Advisor is a very comprehensive term though. They may have different specializations and may focus on different aspects of financials like life insurance or taxes.
An advisor who works with high-net-worth individuals are termed wealth managers. An advisor’s uncertainty is driven not only by policy changes, tax reforms and their implementation but they are also under pressure to enhance themselves with new digital technology and transform business and operating models.
A rising fraction of the population will be retired and mostly will have no or meagre retirement savings. So, individuals, businesses and governments will develop and initiate several solutions and that can impact how Financial advisors devise substantial effective plans for clients.
There has been a shift in fee model, a competitive scenario of under cutting of payments has emerged in the financial market due to the entry of robo-advisors. This has arisen the need to shift from a product -based business to advice-based business. Financial advisors have to redefine their core expertise and value propositions and clients will have to be educated on benefits of this and the ensuing change in pricing models.
With the focus in financial industry shifting to advice, advisors are required to do goal-based planning along with having technology to support it. While planning they have to take into account macro & microeconomics, the trends, the past, the future i.e. the view has to be all-encompassing.
With technology data access has become easy. Hence robo-advisors and online brokerages are flourishing. But with the focus shifting on advice and holistic planning, although clients as well as advisors want data collected, privacy and security of data has emerged as a prime concern. Actions around data production are on the rise especially in developed regions. So, the onus of protection of client’s data lies with the advisor and aging technology infrastructure can cost them heavily. Financial advisors need to upgrade in terms of technology.
Client segmentation strategies have reshaped all together by using latest technology and in turn advisors have to realign their approach to marketing. They have to be more creative and provide tailor-made offerings and experiences to each and every client. Investment in technology and a consistent bespoke marketing is required.
Growth of AI has sparked fear of automation in the job market. Artificial intelligence and its role in financial services has to be studied deeply in coming times and various experimental technology will be offered to advisors especially new products and services utilizing AI.Cautioned approach by the advisors is vital while engaging in these. Opportunity as well as risk both are exponential.
Many changes are driving this industry and the advisor’s dashboard has to be modified and evolve as per the need of the hour to keep abreast with changing times. All the planning tools have to be integrated on a technology platform to serve the client better. The more interactive and accommodative the advisor’s platform will be the better client satisfaction and market share he’ll achieve.
Infatuation with cryptocurrencies has brought in an altogether new facet in the industry and ways to monetize this trend is on the rise among advisors. The success of cryptocurrencies has brought with it the cryptocurrency investment opportunities and the firm or advisor offering advice on this front will be perceived as proactive, advanced, progressive and resourceful and will be sought after.
Align your planning with these trends and be certain of success in your business.