A changing financial industry will force independent advisors to find new ways to stand out among the crowd.

Broker-dealers, wirehouses and RIAs are converging to resemble one another, said Walt Bettinger, president and CEO of Charles Schwab at the Schwab IMPACT 2016 conference in San Diego on Tuesday.

“If you’re a successful broker at a traditional firm, your firm is pushing you to look more like an independent advisor,” Bettinger said to approximately 2,000 financail advisors in attendance. “The end result might be that 20 years from now the entire industry looks like the people in this room.”

As broker-dealers and wirehouses have moved towards a more RIA-like business model, many independent advisors risk losing the advantages that set them apart -- independent, fiduciary advice delivered on a fee model.

RIAs must do more to differentiate themselves, said Bernie Clark, executive vice president of Schwab Advisor Services..

“We have to keep evolving because people want to look like you,” Clark told his audience of 2,000. “It’s critically important that we continue to change and that your firms are sustainable and endurable.”

Sustainability means a focus on succession planning and injecting young talent into the industry, said Clark.

It also means that advisors may have to expand their offerings to improve their value proposition to clients.

“You’ll lean into the next generation of advisors and also to the next generation of clients,” Clark said. “This conversation is going to create the differentiation that you need… it’s inevitably going to include more capabilities within your offices, like working on taxes or taking on legal work, which many of you have been delving into for years, or areas that you are only starting in like career planning, family planning and life coaching.”

Investment management, then, will become a smaller portion of advisors’ value propositions, said Clark.

“We’ve even heard conversations about not producing reports to benchmarks any longer,” Clark said.

RIAs are not going to be able to grow as they had in the past, said Bettinger. While advisors in previous decades were able to attract new, wealthy clients who grew their assets through saving and investing, wealth isn’t being generated sufficiently to support the same levels of growth.

“Significant growth in the business is going to come from market share movements,” Bettinger said. “You’ve combined slow growth with more modest market returns and ultra-low interest rates. There isn’t the same level of wealth generation.”

In addition, existing assets are not going to grow as quickly as in the past as market returns remain muted.

Growth among RIAs, then, must come from market share gains, said Bettinger. With $23 trillion of household assets held outside of the RIA space, there’s plenty of room to grow.

Merger and acquisition activity will continue to be an engine for growth, said Bettinger, which means that smaller firms may begin seeking opportunities to acquire other advisory practices, leading to more consolidation within the industry.

Technology has already commoditized trading, a movement that Clark and Bettinger credit in part to Charles Schwab himself, but the influence of technology is becoming more pervasive as more elements of the financial industry become automated.

“You’re seeing more commoditization in the asset management side of the business,” Bettinger said. “That means that advisors will have to work to keep clients focused on goals rather than focusing on outperformance.”

Technology, particularly social media, has changed the way firms market themselves and build their brands, said Bettinger.

“When I was a youth, you could buy your way into the cultural conversation if you were willing to spend enough on advertising,” Bettinger said. “Today the cultural conversation is established in two ways, through the press and through social media. It’s no longer what you say about yourself, it’s also what others say about you.”

That means that firms must live up to the image they create for themselves via advertising, or face the wrath of a pessimistic public via social media – which Bettinger said weakens the potency of branding and traditional marketing strategies.

Technology and a different service model will also be key in serving subsequent generations of clients, said Clark.

“We grew up in the ‘trust me’ era,” Clark said. “This next generation, that’s not the future they want. They want to know you care about them. Roadmap conversations with them will go miles.”

Though regulation like the Department of Labor’s fiduciary rulemaking will impact the rate of change in the financial advice industry, it does not change the trajectory towards goal-based financial planning, said Bettinger.

“The direction we’re on is already set,” Bettinger said. “Nothing has changed, you’re still going to arrive at the same place, but you’re going to get there faster. The whole world is heading towards more transparency and the fiduciary standard. All the DOL does is give them a little nudge to get there faster.”

All of this industry change means that advisors must be open to new ideas and also be willing to work to change the dialogue around the financial industry, said Bettinger.

Advisors need to have an open conversation about how to best serve their changing client base, Clark said, suggesting that the 2,000 advisors at the conference should start during their time in San Diego.

“Conversations are fabulous because they can open doors,” Clark said. “They can begin to change the greater dialogue – sometimes a conversation alone can be a complete game-changer, relationships grow and thrive through conversations.”