In the next decade, financial advisors will become like a part of the family, advising clients on ever more intimate parts of their lives, predicted Anthony Stich, chief operating officer of Advicent, a developer of financial planning software.

Technology will be a primary factor in allowing advisors to delve deeper into a client’s financial life. This will not only include investing and saving, but consideration of such things as the costs of marriage and divorce, educational costs, planning legacies and even paying for funerals.  

“Clients are going to look to advisors for more services” and more insight into their financial and personal life, Stich said. “If the clients cannot find what they want with their current financial advisor, they will look elsewhere for it.”

The 2007-2008 financial crisis and the progress of technology in the financial industry led to what Stich called “a decade of disruption” that is going to play out during the next decade. “A Decade of Disruption” is the title of a new whitepaper published by Advicent.

Both historic events—the financial upheaval of the recession and the technology revolution—have changed investors’ perceptions of investing and their goals, Stich said. The other recent disruptors to the financial industry are the imposition of a fiduciary standard and the introduction of the subscription fee model, he added.

“There are three types of investors,” Stich said. “The do-it-yourselfer handles everything himself. The delegator lets the advisor make the decisions. But 85% of investors are validators. They set goals, initiate a plan and then seek validation from the advisor. In the current atmosphere, the validators want access to their information at their fingertips and they want daily reassurance they are doing okay.”

An advisor can achieve this through the efficient use of technology. Advisors spend one-fifth of their time on administration on average. “That is one day a week that goes to back office work. That time is going to have to be reduced further with more and better use of technology,” he said.

Advisors in the next 10 years are going to need to be able to make smart assumptions, according to Advicent. They will need to determine what clients want based on what others like them want for their investment dollars. At the same time, advisors should not dismiss any possibilities for their clients based on those assumptions.

“Advisors will need to be more creative based on those smart assumptions,” Stich said. “Doing that will help truly create a more valuable relationship with the client. Advisors started doing cash flow and investing plans for the wealthy. Then, in the 2000s, they switched to goals-based planning. Now there is a third way. With technology, advisors are empowered to provide unique plans for more clients.”