Ten Disruptors Coming:  Advisors’ Roles Must Change

The wealth management business of the past several years has been highlighted by great growth and profitable customers. According to new research from the US¹, that’s about to change with 10 key disruptors on the horizon.

The most important of which are the emerging influence of a new generation of investors and their desire to receive holistic, goal-based advice, as opposed to investment advice, using a multiplicity of solutions.

According to the study, the Millennial Investor’s needs and expectations are highly shaped by access to technology and they want investment advice and products that are tailored to them individually – think the “Netflix” model.

Staying in control of their financial life is big for this generation. They like to make important decisions themselves. They are also skeptical of authority.  Importantly, they believe in the “wisdom of the tribe” – that is, peer-based advice – but if they are going to get advice, they like to get it from multiple sources, including other advisors and experts, and social media. They are do-it-yourselfers, they conduct their own research and they do it anywhere at anytime.

They also view risk through a different lens: they see it as “downside protection” rather than volatility and so the traditional portfolio allocation approach that seeks to diversify away risk does not resonate as well with them.

Other key disruptors include robo-advice, the access to sophisticated analytics and Big Data, the “democratization” of asset classes and strategies (that is, retail investors are demanding access to the same asset classes and investment strategies previously available only to institutional investors and high-net-worth clients), and the aging of boomer clients and the retirement of advisors themselves. The key problem here is that just when wealth is about to change hands – requiring lots of planning and professional advice – firms are having trouble replacing their retiring experts.

All of this is happening at a time when there are increasing regulatory burdens, the investment climate is extremely challenging and fewer clients will be chased by the same firms in a time when competitive models are offering alternative choices.

The Real Wealth Management™ approach taught by the certificate courses of Knowledge Bureau is perfectly aligned with those emerging needs as it advocates a multi-advisory approach to solutions and embellishes on a three-part role for advisors: Educator, Advocate and Steward.

The topic of disruptive influence will be discussed in detail at the Distinguished Advisor Workshops throughout 2016 and at the Distinguished Advisor Conference November 6-9, where the theme is SOAR HIGHER: Plan for Your Greater Potential.

Evelyn Jacks is Founder and President of Knowledge Bureau, Canada’s leading educational institute for tax and financial advisors and author of a new book for consumers, Family Tax Essentials: How to Build a Wealth Purpose with a Tax Strategy.

¹Deloitte 2015: 10 Disruptive trends in wealth management

Refer a Friend

Research

Calculators

Course Trials