The future of running a financial advisory practice

Top practice management experts discuss how advisers need to get ready for the changes the next 10 years will bring

Jul 13, 2014 @ 12:01 am

For the second of a series of special reports on the Crossroads the financial advice business is facing, we asked the industry's top practice management experts one question: How will running a financial advisory practice be different in five to 10 years? Here is what they said:

“The independent channel will be strong but with fewer, larger, CEO-led firms that have multiple generations of advisers. Comprehensive wealth management will be the core service, while commoditized investment management will be delivered predominately via firm-sponsored technology. Technology will also impact the delivery of services, with in-person client meetings decreasing among all age groups.”

Joni Youngwirth
managing principal, practice management
Commonwealth Financial Network

“The trend in managing an advisory practice is all about collaboration … with peers, home office associates, [centers of influence] and, most importantly, clients. Younger advisers will be driving their senior partners to adopt new technologies, particularly at the 'point of sale' and in reviews. There will be greater use of virtual interaction, but, if done right, with no degradation of the client relationship.”

David Patchen
SVP Private Client Group Education & Practice Management
Raymond James Financial Inc.

“We'll see substantial separation between advisers who embrace technology in all facets of their practice and those who do not. Consumers are increasingly leveraging technology to manage all facets of their finances — including finding the right adviser — and advisers who rely on old-line marketing and practice management techniques will be challenged to attract and connect with clients who view them as behind the times.”

Kristin C. Harad
president and co-founder
The Mercato Advisor Marketplace

“Baby-boomer advisers will be scrambling to identify the best succession path and finding, because of procrastination, there are few optimal choices left.”

Kirk J. Hulett
executive vice president, strategy and practice management
Securities America Inc.

“Running an advisory firm in the future will require a greater dependency on technology. Successful advisers will build stronger relationships that are no longer exclusively face-to-face, but cultivated and maintained using social media and other virtual channels. Firms that leverage the latest technology will also attract and retain the best people, and fuel loyalty by creating a company culture that appeals to tech-savvy Gen X and Gen Y associates. [And] the most successful firms will be those that use technology in as many areas as possible to create a highly efficient business that is profitable, can scale for growth and has the capacity to handle the rising demand for professional advice.”

Jim Dario
managing director for product management
TD Ameritrade Institutional

“We have seen the advice profession, and the broader industry, undergo incredible change, expanding advisers' choices for how they run their practices — from the advent of strategic acquirers and functional outsourcers to serving the emerging affluent and digitizing advice. The next five years will bring more change and likely present even more solutions and at an increasingly rapid pace, bringing greater efficiencies and higher margins to many advisers' practices.”

David Canter
executive vice president, practice management and consulting
Fidelity Institutional Wealth Services

“The up-and-coming generation of investors (today's 35 year olds) has a different mindset, and their social club is the web. To keep clients engaged and to attract prospects you'll need great, dynamic content and digital marketing with the right marketing automation.”

Gail Graham
chief marketing officer
United Capital

“The complex needs for financial advice will be met and served by the most sophisticated financial advisers/firms supported by cutting edge technology. A financial advisory practice must prepare today for the challenges that lie ahead five to 10 years from now: competing with an increase in access to quality information, advice as well as analysis — and the perceived ease with which intelligent, financial decisions can be made without a financial adviser.”

Michael Parker
national director, enterprise development
HighTower Advisors

“Advisers increasingly will be serving the Generation Now client — investors between the ages of 30 and 45. Their distinct mindset will drive the need for more collaborative planning relationships that are rooted in empathy and understanding of the whole person, not just their financial goals. Technology will also continue to grow in importance to the client experience, as Generation Now clients intuitively turn to mobile and cloud applications to meet their needs for greater accessibility and on-demand, 24/7 access to information. However … Generation Now [still] will seek out advisers who can provide custom relationships built on transparency and trust.”

Bernie Clark
executive vice president and head
Schwab Advisor Services

“The greatest changes we'll see in advisory practices over the next decade will be how we engage younger clients. From how we communicate with them, to structuring services and fees aligned with their needs and expectations — which are quite different from the baby boomers many of us work with now — is likely to cause an evolution in practices that want to position themselves for future growth.”

Valerie L. Porter
director, Research & Practice Institute
Financial Planning Association

“The shift toward independence is redefining the job description — and broadening the career opportunity — for today's financial advisers. In addition, the combination of powerful technology, social media integration and broad platforms means tomorrow's independent practices can be structured to fit not only the financial advisers' needs, but the clients' needs as well.”

Brad Hearn
EVP of Independent Advisor Business Consulting
LPL Financial

“In the future, financial advisory practices will be powered in large part by artificial intelligence, but in a positive way. This intelligence will process massive amounts of input data to be able to generate recommendations that are optimized to the specific characteristics and goals of clients.”

Bill Winterberg

“The way advisers communicate with clients will completely change. Gone will be the days of quarterly in person meetings. Advisers will need to have a diverse mix of communication channels including texting, instant messaging, video chat, apps, social media and whatever new technology comes along in order to meet the demands of their clients.”

Kristen Luke
Wealth Management Marketing Inc.

“Running a successful financial advisory practice in the next five to 10 years is going to come down to how well an adviser can manage and scale client acquisition and client retention in a wired world. Advisers will need to be nimble and proficient in the areas of high trust, high tech and high touch by leveraging digital business strategies and smart tools. Outsourcing the tasks of asset management and even financial planning will be critical so that the adviser can focus primarily on the big picture strategy as well as creating a meaningful experience for clients and prospects alike.”

Stephanie Sammons
founder and CEO
Wired Advisor

“Firms will have more established 'apprenticeships' that will give new people to our industry a better way to find their career. People recruited will (as they are now) fit niche needs or specializations. There will be more diversity in the practice and employees will live in different locations — working remotely.”

Mary Dunlap
Mary Dunlap Consulting


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