In the year 2025, if man is still alive, he’ll want financial advice — that’s not from a device.
That, at least, is the conclusion drawn by Oak, Penn.-based SEI from a survey asking advisors to predict the future of the financial advisory business.
Over half of the polled advisors, 58 percent, believe they will spend most of their time on in-person meetings cultivating in-client relationships, while just 32 percent believe more time will be spent in video conferencing, and 10 percent believe they will spend more time on social media, email or events.
The advisors surveyed by SEI were a conservative lot, with 58 percent expecting referrals to remain their primary tool for generating business in 2025 and another 19 percent expecting centers of influence like attorneys and accountants to continue to be useful. By comparison, just 16 percent of advisors thought that social media would be an important tool for finding new clients.
Almost all respondents, 92 percent, believe their planning approach will differentiate their firm in 10 years, followed by investment approach, 5 percent. Just a handful said that technology, 2 percent, and practice size, 1 percent, would differentiate them.
When attempting to predict the most popular investment approach, 29 percent said that tax-managed investing would prove popular in the future, followed by goals-based investing and index investing at 20 percent respectively. Tactical/dynamic investing, ETFs and socially responsible investing all lagged.
The study, which surveyed 175 advisors at two SEI conferences in fall 2015, also found that:
- 54 percent of those surveyed said communication and interpersonal skills will be the most important skill for financial advisors in 2025.
- Other skills new advisors will need include co-planning (22 percent), technological integration (15 percent), investment expertise and social media (9 percent combined).
- More than half of respondents said that between 31 and 80 percent of advisors will offer roboadvisory services in 10 years.