While the general function of financial advisors is not projected to experience significant change, the role itself is currently experiencing shifts in the way it is organized and managed. From adopting new technologies to adjusting to larger business trends, financial advisors will likely be subjected to new expectations, limitations, and standards in the coming years.
Technology & Demographics
Two of the biggest driving factors of change involve the rapid development of new technologies and the changing attitudes of target demographics. From robo-advisors to investment apps, financial advisors must be willing to change their tactics to avoid becoming obsolete. Individuals of younger generations are also moving into phases of life where they are able and eager to begin managing their finances to the best of their abilities, but they come from very different economic conditions than their predecessors. In order to best serve this demographic, financial advisors need to be diligent in adequately considering their clients’ needs and desires.
A more recent shift is happening in regards to how easy it is for financial advisors to move between firms or companies. Major financial players are prioritizing employee retention, which means that, while the benefits are slated to improve, that also means that advisors will have limited mobility and freedom when it comes to their careers. When this happens, advisors will experience a shift of power from themselves to their firms, limiting the sense of entrepreneurship that has, to this point, characterized many advisors’ experiences. Some advisors are content to remain with the same firm, especially if they are receiving proper benefits and are granted certain freedoms, but for those who are comfortable acting as free agents, these changes may be inhibiting.
Recruitment and Compensation
For those considering a new career as a financial advisor, it is important to note that the recruitment process (especially among larger firms) has changed. Most new advisors are chosen with great care, and instead of being paid commission, many of them are instead being offered a salary. This changing payment and recruitment structure could alter the financial advisor industry in regards to the way in which advisors service their clients and operate as individuals in their field.