Financial advisors and others who are used to working in offices will find value in returning to the office environment, but that will not happen for months, according to Mazi Bahadori, vice president of securities and chief compliance officer at Altruist, a fintech firm and custodial platform based in Venice, Calif., that provides a software engine to financial advisors.
“We are not going to get rid of offices, but it will be the second half of next year at the earliest before things will return to somewhat normal,” Bahadori said in an interview. “At the same time, to a certain degree, remote is here to stay.”
Remote working is only one of several trends of note for advisors that will continue into the future, Bahadori said.
“The current situation creates a massive opportunity for advisors,” he noted. “Advisors used to spend a fair amount of time in their cars. Now they are doing prospecting over Zoom, and opening accounts and managing investments remotely. This provides a lot more time in an advisor’s day. If a firm is not rapidly adopting technology to do this, it is going to stagnate and miss a growth opportunity.”
The shift to remote work has also helped many wirehouse advisors re-think their value proposition, as the glamour of working for a large firm in a high-rise with a fancy office is far less compelling today.
“More advisors will want to pursue independence,” Bahadori said. “The cost and complexity of going independent are much less today than they were three or five years ago. A lot of software is available that makes it easier to manage clients’ business, while the risks of making mistakes have dropped."
Meanwhile, the pandemic has pushed trends that were already in play and will continue for years to come such as holistic financial planning. “Firms are becoming more holistic. You can’t just manage accounts anymore," Bahadori said.
Another ongoing trend centers on mergers and acquisitions involving registered investment advisors. “Advisor demographics, an industry flush with private equity capital, and the challenges of offering a full suite of products and services when you're not at scale will keep driving deals,” Bahadori said.
Another big trend to watch in 2021 is a changing regulatory environment in the new Biden administration. “Regulations will get more challenging and probably more costly to comply with,” Bahadori warned.