Are Advisors Ready for “The Big Shift”? (Hint: You Better Be)

Sep 29, 2016

roubini-coverFall seems busier than the other seasons – back to school, year-end planning, goal setting for the next year and refocusing on business after summer vacation. No question that the DOL rule is dominating the conversation this year, and rightly so. But I think many advisors are missing a key planning opportunity in their businesses, as they focus on the changes they are making in preparation of the new rule. They are doing short-term planning and forgetting about the long term.

More to think about

Earlier this year, Roubini ThoughLab teamed up with SEI and other leading wealth industry firms to conduct a study, Wealth and Asset Management 2021: Preparing for Transformational Change. It looks at the changing demographics of wealth, from boomers to millennials, with very different needs, behaviors and ways of communicating. The study suggests that over the next 5 years, the impact of 5 megatrends “will be profound.”

Over the next few weeks, each of us at Practically Speaking will highlight a megatrend and what it means to advisors.

Megatrend #1: The Big Shift

By 2021, converging trends (technological, economic and demographic) will transform the wealth industry, unlocking greater global wealth across a more diverse universe of investors. The Roubini analysis foresees:

  • Massive wealth creation over the next five years
  • Changing demographics of wealth, as millennials, Gen X, women and emerging market investors see their wealth rise

The research shows that investment providers are not fully prepared to meet the rising expectations of investors, who:

  • Are pressing for proper investment certification (72%)
  • Want more customized solutions (68%)
  • Want wider investment options (64%)
  • Want greater cybersecurity (63%)

To make matters worse (for us), 48% of investors are willing to switch providers if their demands are unmet. The percentage is even higher among millennials (65%) and emerging market investors (66%).

And that means…

As you are doing business planning for 2017, think about planning for 2021 and beyond. The Roubini study points to great opportunities to grow your business – but not if you continue to focus on the same old clients with the same old products. Is your business set up to take advantage of this megatrend (and others) that will change our business?

Ask yourself:

  • When I survey/ask my clients what they are looking for in their relationship with me, do I ask them to ask their kids, too?
  • Has my firm embraced lifelong learning and professional designations?
  • Am I customizing my business around advice? (In fact, do you have an advice-based business?)

Being a planner means you have to focus on not just tomorrow, but lots of tomorrows. Maybe it’s time to think beyond just next year. Own the DOL – become a fiduciary – but also plan for what is coming next.

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John Anderson

John Anderson

John Anderson is the creator and lead author of Practically Speaking blog and Managing Director of Practice Management Solutions for the SEI Advisor Network.

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