Advisor Today - March/April 2016 - (Page 16)

PRACTICE SPECIALTIES FINANCIAL PLANNING By Ayo Mseka What's Ahead for Financial Advising? In 2025, personal interactions will not vanish, even with an increase in the number of robo-type services. I n the year 2025, personal interactions within the financialadvisory industry will not vanish, even with an increase in robo-type services and technological advances, according to an SEI survey. The prediction survey, conducted at two SEI Strategic Advisor Conferences last fall, provides a look into the future of the financial-advisory business. Nine years from now, financial advisors will spend most of their time cultivating existing client relationships via in-person meetings, according to more than half (58 percent) of those advisors who took the survey. Video conferencing comes in a distant second (32 percent), while email, social media and events capture the last 10 percent. From a prospecting standpoint, more than half (58 percent) of the respondents expect referrals to remain the No. 1 business-generation tool in the year 2025, and 19 percent expect centers of influence to continue to be useful. With regard to social media, 16 percent of advisors surveyed believe that it will be an important tool for new business generation 10 years from now; however, a small percentage (3 percent) does not think it is the ideal tool to cultivate relationships. Likewise, a small percentage of advisors predict that networking events (3 percent) and direct marketing (3 percent) will not be effective tools for prospecting. "While certain aspects of portfolio management can be automated for smaller portfolios, financial planning and the decisions related to it are far more complicated today for larger portfolios, and will continue to be so 10 years down the road. These survey results further demonstrate the necessity for a human-centric approach," said Wayne Withrow, executive vice president of SEI and When asked about the biggest differentiator in 2025, 92 percent said their planning approach and client relationships. head of the SEI Advisor Network. "However, due to the changing needs of tech-savvy and timeconstrained investors, financial advisors need to use technology to improve productivity and free up time to spend with clients. Becoming a techno-advisor will be critical to better servicing clients in the future." Strategy for growth When asked about the biggest differentiator for their firm in 2025, an overwhelming 92 percent say their planning approach and relationships, followed by investment approach (5 percent), technology (2 percent) and practice size (1 percent). With regard to investment offering, respondents suspect that tax-managed investing (29 percent), goals-based investing (20 percent) and index investing will gain the most momentum in 2025. "As tax codes continue to change and take a large bite out of investors' gains, it is not surprising that taxmanaged investing is expected to gain momentum 10 years from today," said Withrow. "It's critical for financial advisors to help investors rethink investment tax management by employing new techniques and strategies." Another area of focus that can help financial advisors grow their business is technology, which will continue to impact the way they do business in the future, according to the survey. Of the technologies presented to the survey participants, 38 percent selected business efficiency tools to have the biggest impact on their practice in terms of winning new clients in 2025, while nearly a quarter selected front-office tools, such as CRM technology. Other impactful tools for advisors include digital marketing, roboplanning tools, being virtually available to clients 24/7, and social media, such as Twitter, LinkedIn and Facebook. While advisors anticipate having new tools to help their businesses cont'd on page 18 16 ADVISOR TODAY | March/April 2016

Table of Contents for the Digital Edition of Advisor Today - March/April 2016

From the Editor
New Products
A Question of Ethics The Details Often Make the Difference
What's Ahead for Financial Advising?
Whos's Saving the Most and Why?
Making the Case for Critical Illness Insurance
Are You a Retirement Expert?
Selling the "Best Plan"
Smooth Sailing
Taking Incremental Steps Toward Success
Investment Strategies for Today’s Consumers
How Tax Efficient is Your Investment and Retirement Portfolio?
Naifa News
Ideas for a Profitable Practice
Crossing the Two Client Relationship Bridges
Working with Muslim-American Clients
Attracting and Serving Today's High-Net-Worth Clients
Becoming a Networking Success
Advertiser Index
Back Page

Advisor Today - March/April 2016