Most advisers don’t have a business plan in place

By Ravi Samalad |  24-12-19 | 
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Ravi Samalad is Assistant Manager - Editoral for

Many financial planners are not anticipating evolving client needs or adequately planning for the future, despite the technology-fueled, rapid reshaping of the financial industry, reveals a recent study conducted by Financial Planning Association (FPA) and SEI among 436 U.S. financial planners. Interestingly, the results are reflective of the trends among financial advisers in India.

Here are some interesting findings from the study.

Where does the advice profession stand today?

Planners are too caught up with today to plan for tomorrow. More than half of respondents (55%) cited they have no business plans currently in place. Of those respondents, 42% keep meaning to but haven't gotten around to it, while 18% believe a plan is unnecessary.

Advisers haven't truly differentiated themselves or their businesses in any meaningful way. Respondents were asked to select a descriptor that best described their primary differentiator, and more than half of all respondents selected a descriptor that will likely be difficult for consumers to translate into value. Nearly a third (28%) selected "offers life planning and financial planning," followed by "fosters personal connections" (24%).

Planners aren't focused on adapting their services to meet changing client trends and preferences. Two-thirds of respondents meet with clients in their offices, compared to only 17% who report meeting at a client's residence, and only 9% percent report meeting with clients virtually.

What does tomorrow look like?

Planners are split about ease of growth in the future. When asked whether they believe future growth will be easier or harder, responses were split nearly even, with a slightly higher number (56%) expecting it will be harder. About half (48%) of respondents who think it will be easier said they will be better equipped. Those who believe it will be harder cited younger clients using hybrid advice platforms as the main reason (40%).

They are not anticipating the need to adapt, despite changing investor sentiment about technology. When asked how they expect the client experience and process will evolve over the next five to 10 years, less than a quarter (22%) of respondents anticipate they will have to adapt their processes in the future. However, most investor participants (80%) said they are "very comfortable" or "somewhat comfortable" with digital tools. Thirty-one percent say they currently use online portals and 15% use a mobile app for smartphones; however, these digital tools are at the bottom of the list of functionalities investors would like to use if offered by their planner. Augmented or virtual reality (17%) and virtual assistance/chat bots (15%) ranked highest among the top digital tools investors would like their planners to offer in the future.

Planners believe technology will be a key to success and goes hand-in-hand with innovation. One-quarter of respondents cited adoption of the best new financial technology on the market as one of their top three business goals over the next five to 10 years, and they believe that technology is the key to freeing up time to concentrate on the personal connection with clients. More than half (54%) describe innovation in the advice industry as the technology that enables them to focus on human connections. When asked about their preferred technology platform in the future, 50% of respondents said they prefer a single, integrated platform with minimal integration with outside systems.

Download the full study here.

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