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Dan’s new book for millennials, Wealthier: The Investing Field Guide for Millennials, is now available on Amazon.
What a difference a decade can make. While predictions are always problematic (especially about the future, to quote Yogi Berra), here’s my take.
More financial advisors
The demand for financial advisory services will continue to grow. The employment outlook for personal financial advisors is bright, with an expected growth rate of 15 percent through 2031, indicating a robust demand for their services.
These factors will contribute to this growth:
Complex financial needs: The increasing complexity of personal finance, including retirement planning, investment strategies, and estate planning, will continue to drive the need for professional advice.
Greater awareness: Greater public awareness of the importance of financial planning will encourage more investors to seek professional guidance.
AI and automation
AI and automation will revolutionize the financial advisory industry. These technologies enhance efficiency, improve client communication, and enable data-driven decision-making. By 2035, AI will be integral to most advisory firms, providing the following benefits:
Efficiency: Automation of routine tasks like portfolio rebalancing, risk assessment, and compliance checks will allow advisors to focus on more strategic issues.
Client insights: AI-driven analytics will offer deeper insights into client behavior and preferences, enabling more personalized advice.
Cost reduction: AI will reduce operational costs, allowing firms to offer more competitive pricing and putting more pressure on traditional AUM pricing.
FinTech innovations
By 2035, FinTech will be ubiquitous, driving the following changes:
Increased accessibility: Digital platforms will make financial advice accessible to a broader audience, including younger, tech-savvy clients.
Enhanced transparency: Broadening adoption of blockchain technology will increase transparency and security in financial transactions.
Improved client experience: Digital tools will facilitate better communication and interaction between advisors and clients.
More registered investment advisors
The financial advisory industry is experiencing a strong shift towards registered investment advisors (RIAs). Some predict that over 80 percent of advisors will become RIAs for a number of reasons:
Independence: RIAs enjoy greater autonomy than advisors affiliated with broker-dealers, allowing them to offer more personalized services.
Fiduciary duty: RIAs are held to a fiduciary standard. This means they must act in their client's’ best interests, which enhances trust and credibility.
Regulatory changes: Increasing regulatory scrutiny on broker-dealers will encourage more advisors to transition to the RIA model.
More “super RIAs”: The number of large RIA firms offering a wide range of services will continue to increase. These firms will leverage economies of scale to provide comprehensive financial planning, tax, and legal services.
New business models
To stay competitive in 2035, you’ll need to adapt your business model. Fundamental changes will include:
Comprehensive financial planning: Advisors will offer more comprehensive financial planning services, integrating investment management, tax planning, estate planning, and legal advice. Simply “coordinating” with other professionals won’t be enough.
Lower fees: The traditional AUM-based fee model will face increasing pressure from cost-efficient robo-advisors. To remain competitive, advisors will need to adopt more flexible fee structures, including flat fees, hourly rates, and subscription models.
Value-added services: Advisors will offer more value-added services like financial education, personalized coaching, and specialized investment strategies to justify their fees. These services will enhance client loyalty and differentiate advisors from automated solutions.
A demographic shift: Your firm’s future may depend on your ability to retain your client’s children and grandchildren due to “the great wealth transfer,” which will see trillions of assets flowing to them over the next several decades.
Wealthier:
The Investing Field Guide for Millennials.
Why have so many financial advisors agreed to review an advance copy of Wealthier: The Investing Field Guide for Millennials. It empowers millennials to be responsible DIY investors and financial planners. You can see some of their reviews here.
Dan’s new book for millennials, Wealthier: The Investing Field Guide for Millennials, is now available on Amazon.
Here’s what one advisor said: "Saplings grow into trees. We need to help the next generation of investors get to where they need our services."
For more information, visit the website for Wealthier:
To review Wealthier send an e-mail to: [email protected]
Proactive and interactive planning: By 2035, financial planning will be more proactive and interactive. Advisors will use AI-driven tools to anticipate client needs, provide real-time advice, and engage clients through interactive digital platforms.
More personalized advice: Clients will demand personalized advice tailored to their unique financial situation. Advisors will leverage data analytics to offer customized solutions that align with clients’ goals and preferences. This level of personalization will be a crucial differentiator in the competitive landscape.
Talent acquisition and retention
Attracting and retaining skilled financial advisors will be a significant challenge in 2035. The competitive job market will require firms to offer attractive compensation packages, professional development opportunities, and a positive workplace culture.
Continuous learning
Continuous learning and development will be vital for advisors if they hope to remain relevant. Firms will need to invest in ongoing training programs to ensure their advisors are equipped with the latest knowledge and skills.
Sustainable investing
Sustainable investing will continue to gain traction, with assets under management in this sector expected to reach over $53 trillion in the United States by 2025. Advisors will need to incorporate environmental, social, and governance (ESG) factors into their investment strategies to meet client demand.
Final Thoughts
In 2035, the financial advisory landscape will be vastly different from today. Firms that adapt to technological advancements, changing client expectations, and regulatory developments will thrive. Those who resist change may struggle to survive.
Advisory firms can set themselves up for long-term success by embracing AI, FinTech, and sustainable investing and continuously evolving their business models and service offerings. The key will be to stay agile, innovative, and client-focused, ensuring that they meet their clients’ diverse and evolving needs.
Disclosure
As I do with most of my articles, I used Chat GPT 4.o to provide an initial draft of this article. I edited extensively, conducted independent research, and hyperlinked to material facts.
Dan coaches evidence-based financial advisors on how to convert more prospects into clients. His digital marketing firm is a leading provider of SEO, website design, branding, content marketing, and video production services to financial advisors worldwide.
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Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
Here’s what one advisor said: "Saplings grow into trees. We need to help the next generation of investors get to where they need our services."