4. Technology is powering the embrace of comprehensive advice platforms. The human brain isn’t wired to do algorithms or the necessary math to manage risks, costs, and tax liabilities at the household level.
One-size-fits-all rules of the thumb are inadequate. Spreadsheeting takes hours – time advisors don’t have. Software can and should automate much of it.
So, firms are creating comprehensive advice platforms to meet clients’ needs for true portfolio advice and retirement income planning.
Going back to the 2009 Smith Barney merger, Morgan Stanley invested heavily in their platform to coordinate legacy systems and new technologies. Fast forward, and they’ve doubled net new assets yearly for the last three years, making them the fastest-growing firm among the majors.
They’ve launched an advisor Tax Academy and built the first comprehensive household-level retirement income program, Intelligent Withdrawals.
And they’ve only just begun.
5. Human advice will always matter. Boomers are swarming advisors’ offices. Millennials are in their 30s and early 40s. Many assumed that they’d shun human advice—they were wrong.
Both generations recognize the value of human advice and software's essential role in delivering hyper-personalized financial plans and executing them for the best results.
Meanwhile, more advisors are retiring than joining the business. Those who remain need technology to be more efficient and provide better advice.
Requisite advisor skills have shifted from investment advice only to family and life advice. That includes:
• Listening to what matters in all aspects of clients’ lives. Financial advice is much more than portfolio management.
• Problem-solving skills, including how to meet multi-generational needs and wants regarding lifestyle, longevity, estate planning and healthcare.
• Coaching clients in developing and strengthening habits around managing assets, liabilities and cash flow so clients can achieve financial peace of mind.
I hear this from execs investing in the future: there’s never been a more exciting time to be an advisor in the tech-powered, human-led financial advice business.
Jack Sharry is co-chair of MMI's Digital Advice Community, a member of the Next Chapter Executive Leadership Advisory Board and co-chair of Next Chapter Leadership in Action. He hosts the WealthTech on Deck podcast, is the author of the book Authentic and Ethical Persuasion, and is executive vice president of LifeYield.