Financial advisors must learn to deal with new technology, more sophisticated clients, a shortage of talent entering into the advisory field and other trends if they are to prosper in the future, according to a new study by Pershing LLC.
At stake, according to the report, is some of the $850 billion in new investable assets that could become available each year for the next decade.
“There are a number of challenges that can impact the long-term growth prospects for advisory firms,” says Mark Tibergien, CEO of Pershing Advisor Solutions. “That’s why it is important to prioritize those that will have the greatest impact on their businesses in the near future.”
The study by Pershing, entitled Advisor of the Future II: Building a Business to Last, recommends several steps advisors can take to improve their chances of thriving in the future.
Advances in technology have increased the impression that consumers can manage their own finances. Advisors must acknowledge this change and improve the quality of their advice to retain clients, Pershing says.
Secondly, the industry is changing because of the lack of young people moving up the ranks. Advisors need to focus on people management skills and long-term staffing solutions to advance young people in the system, according to Pershing.
Advisors can improve their workflow and service delivery by adopting technology and using people wisely to remain competitive, the study says.
Finally, firms should adopt a culture of compliance with new regulations to assure they are providing service to clients that goes beyond the regulatory minimums, Pershing advises.
“Advisory firms have shown resiliency in meeting demands of financial markets, consumers and regulators,” adds Tibergien. “Now it is time to adapt to the new normal and focus on plans to ensure continued success.”