Younger planners more willing to adapt to client needs

The future of financial planning is diverse and increasingly personal – and early career professionals are more likely to adapt their businesses, data from FPA show.

As automated planning tools and advice become more widespread, knowing the client will be more important than ever, and the relationship aspect of the business is where many financial planners will be dedicating their time. Overall, 74 percent told the Financial Planning Association that they will invest more time on customer relations, and 67 percent said they adapt their business models “to accommodate more clients who view planners as collaborative partners.”

Those figures are based on results of a June survey of 387 financial planners by FPA.

“Financial planning is a young but rapidly evolving profession due to the growth of awareness about the importance of planning for long-term financial objectives and various external factors, including advancements in financial technology and the increased diversity of clients,” 2024 FPA President Claudia Kane said in an announcement of the results.

Nearly nine in 10 said they plan to learn more about customers’ values and beliefs, using that information to help inform their financial plans, according to the report. Professionals with under five years in the industry were more likely (74 percent) to say they expect to change their businesses “to cater to more clients who see financial planners as collaborative partners.” By comparison, people with at least 15 years’ experience were less likely to say so, at 63 percent.

“My role as the financial advisor is human-centric and this ethos squarely plays a role in every interaction, whether it be with a prospective client or a current client. Financial planning is no longer ‘just’ about the dollars and cents,” Silicon Beach Financial president Christopher Stroup said in an email. “It has slowly evolved into less tangible aspects like understanding our clients values, their passions, and money scripts to help inform how to best navigate their financial journey today and in the future.”

Most planners told FPA they will work to accommodate a wider range of client needs, and more than 90 percent said they are improving their technical skills to better help customers.

Further, 71 percent said recruiting planners with diversity in mind was a priority, while 65 percent said the same about working for a diverse client base.

However, millennial planners were more likely to say they would change their businesses to accomplish that than baby boomers, at 83 percent versus 61 percent.

Separately, FPA compared some of its data to results of a recent survey by Allianz, finding that clients and advisors may have trouble remembering what financial topics they’ve covered in meetings.

“For instance, 91% of planners say they are likely to discuss concerns about running out of money before they die, while only 28% of investors indicate that they have talked to their financial advisor about it,” the FPA announcement noted. “Relatedly, 94% of planners say they are likely to discuss how best to take distributions from their savings for retirement income, and only 32% of investors say they have had this discussion.”