Advisor Today - March/April 2016 - (Page 16)
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.
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
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
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
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"
Taking Incremental Steps Toward Success
Investment Strategies for Today’s Consumers
How Tax Efficient is Your Investment and Retirement Portfolio?
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
Advisor Today - March/April 2016