Within five years, advisory firms will be focused more on helping clients with all of life's decisions and will spend little time on investment management or even financial planning.
Advisers will deliver some of this guidance digitally and some via a human team that's always at the ready, according to David Canter, head of the RIA segment for
Fidelity Clearing & Custody Solutions.
Successful advisers will be those who can clearly demonstrate how they are providing more value and the same benefits that make companies like Amazon so loved. That is, helping clients avoid hassles, saving them time, reducing their costs, giving them access to information and just making life easier, he said at an
InvestmentNews event in New York on Wednesday that gathered dozens of young advisers to discuss the future of the advice business.
"Investors increasingly want more and have a demand for being served the way they want," he said. "They don't need a lot — they need a little, a lot."
Practically speaking that means the quarterly meeting to review a 60-page financial plan or investment portfolio will be out. Instead, imagine automated texts to a client reminding them to invest their recent bonus, a Facetime chat from a car lot to discuss the benefits of auto leasing, or a discussion on whether a client should move across the country to take a new job.
This shift in focus is forecast as the advice business faces many pressures.
Financial planners already are being squeezed by clients to provide broader and faster services, while at the same time facing pressure to lower their fees, said Mr. Canter, who helps about 2,800 advisers across the country.
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These advisers particpating in the event, culled from past winners of the
InvestmentNews 40 Under 40 awards, stressed that the business is increasingly about changing client behaviors, rather than understanding money and numbers. Think of advisers as life coaches who don't tell clients what to do, rather they ask them the right questions that lead clients to the right answers.
Among the challenges that advisers need to figure out is how to make advice available to clients at the moment that they need it, so as not to lose the opportunity to engage with them, they said. The answer seems to involve a mix of human and tech-delivered advice.
"It's not computers or people, it's computers and people," Mr. Canter said.
Eric Roberge, founder of
Beyond Your Hammock, agreed that in five years the advice industry will no longer be separated, with some firms providing advice digitally while others offer human advisers.
"It's going to be all one thing," he said. "So there will be a human touch to technology, allowing us to deliver better information and guidance to more and more people."
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Another challenge is fighting through the "noise" from the media, regulators and others to capture the attention of clients and prospects.
Serving a niche and branding one's practice as experts for these clients is an ideal approach, but it's difficult to remain disciplined and turn away potential clients who don't fit such parameters, advisers said.
