In a matter of a few weeks this past spring, financial advisors were plunged into crisis mode seemingly overnight and out of nowhere.

Every crisis and recession is unique, but several trends are emerging from this crisis that could forever change the advisory business. These trends will bring changes that will be incredible opportunities for some advisors, but for those advisors who can’t or won’t adapt, they risk being left behind.

As a practitioner and an owner of an advisory firm, I see several important changes emerging from this crisis that advisors need to pay attention to in order to remain relevant and competitive as we emerge from this crisis.

Cybercrime will pose a massive threat. Cybercrime is a major threat for nearly all firms, many of whom had to cobble together a work-from-home cybersecurity policy in a matter of days, and are at higher than ever risk of attack with many employees working from unsecure workstations and unsecure internet networks.

Financial institutions are always among the most vulnerable to cybercrime, and in a recent article in ETF trends, Stephen McBride asserts: “The coronavirus is laying the groundwork for a massive cyberattack…and the largest cyberattack in HISTORY [will happen] within the next six months.”

Since remote working will likely continue for months, and cyber criminals are increasing their frequency of attacks during the pandemic, advisory firms will need to adapt quickly, train their staff and be vigilant in protecting client’s data.

Streamlined portfolio management will accelerate. Many advisors are still stuck in the old commission-based model and doing custom portfolios for every client with an inventory of thousands of positions.

When the stock market entered a bear market in a matter of a few weeks, and then quickly reversed course to rise 40% since the March lows, how can advisors who customize portfolios for every client possibly keep up in a rapidly moving market?

Advisors who have embraced a more limited “menu” of options for clients or who maintain portfolio models were able to take action and rebalance quickly.

Streamlined portfolio management allows advisors to focus on the higher-payoff activities of meeting with clients and making strategic portfolio and financial planning decisions, while better keeping up with markets that are becoming increasingly fast-moving and volatile.

Fiduciary status will increasingly become table stakes. Even though the original DOL Fiduciary died after Trump took office, and it remains to be seen what future fiduciary standards for advisors will look like, I’ve noticed an important trend over the last five years—more consumers are becoming aware of the importance of their advisor’s fiduciary status.

Prior to a few years ago, potential clients had no clue what the word fiduciary meant and why it was important. But that has changed. Increasingly, potential clients broach the issue and ask about fiduciary status and what it means for our relationship.

As a result of more consumer awareness, many non-fiduciary advisors will struggle to demonstrate to potential clients that they can be trusted to the same extent of their fiduciary counterparts to avoid conflicts of interest and always act in the client’s best interest.

Face-to-face becomes screen-to-screen. Clients of all ages are becoming comfortable with Zoom and will likely prefer to continue to meet virtually as it has many conveniences and advantages. As time passes, I believe a return to regular in-person meetings may end up being the exception rather than the rule. This trend has several implications for advisors.

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