12 Financial Advisor Trends for the Next Decade
Here are 12 big trends to watch as advisors forge ahead into a new decade.
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1. Longevity Risk
As a result, planners may need to help their clients plan for sequential retirements - periods of work, followed by short-duration retirements that may include training to acquire new skills, and then second careers.
2. Compensation Shifts
As portfolio construction and asset management tasks become more automated in the future, the cost of planning tasks such as these could drop from tens of thousands of dollars at the high end to nearly zero. Partly as a result, planners may need to develop new skills and services for clients in order to generate new streams of income and remain competitive.
3. Succession Plan Scramble
4. Market Volatility
5. Regulation & Compliance
Smaller firms will continue to be acquired by and merge with larger firms to avoid heavy compliance costs in an increasingly complex regulatory environment. Yet as compliance burdens rise, technological advances will cut costs.
6. Financial Literacy
7. Crowdfunding Evolves
8. Artificial Intelligence
Sean Belka at Fidelity predicts that the ability to collect and mine such large amounts of data will change client relationship tools, which will continually mine clients' social media accounts to look for life-changing events like job changes, marriages, divorces, births or deaths in the family. Those findings will flow into action items for planners and their staffs, who can then opt to contact those clients to update wills, account allocations and trusts.
9. Security & the Cloud
10. Professional Education
11. New Partnerships
And planners will need to work more with a new kind of third party when it comes to directing clients' investments, as more trustees see to it that the desires of the older generation continue to be respected - often after the original client has died. Planners will have to answer to these trustees and work with them.
12. Outsourcing
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