Five Shifts Transforming Advisor Growth

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The financial planning landscape is undergoing a great transformation, driven by emerging trends that have accelerated in recent years. This transformation is reshaping the profession. Influenced by changing consumer demographics, the dawning of the digital age, advancing advisor demographics, the pandemic, and the rise of holistic advice, it is driving opportunities for growth and evolution within the profession, creating new opportunities for advisor growth and success.

Changing consumers

The pandemic was a catalyst, igniting a worldwide "money-in-motion” event that prompted individuals from all walks of life to reassess their relationship with work and money.

Gone are the days when financial planning was exclusively for the wealthy and older generations. With shifting consumer demographics and financial literacy and digital offerings on the rise, the democratization of financial planning has begun.

The demand for financial advice has grown exponentially across all market segments, pushing advisors to update their pricing, fees, and service models to cater to clients from diverse backgrounds. For instance, advisors have introduced alternative pricing models, such as retainers and subscription services, to grow thriving practices serving clients without substantial asset bases.

Preferences are also changing, with consumers wanting deeper, holistic, and integrated services. They’re also seeking more specialized services, personalized advice and help with non-financial matters. To meet these needs, firms have specialized, expanding their capabilities and deepening their offerings to drive growth.

Dawning digital age

Advances in technology have revolutionized the advisory space, enabling firms of all sizes to leverage digital tools and expand their capabilities. The internet and social media have transformed the way consumers access financial information. A significant and growing percentage of consumers now rely on social media platforms for financial advice and guidance.

With this shift, advisors can specialize their offerings and serve markets that were previously inaccessible. Go onto Twitter, YouTube and Instagram and you’ll find advisors with thriving practices born solely from those audiences.

Digital strategies like online blogs, podcasts, webinars and social media enable advisors to reach targeted segments of the market, seeing 2-3x growth with a specialized niche or specialty.

Technology isn’t just driving growth; it’s deepening services and expanding capacity. Leveraging technology like CRM, automated workflows, Zapier and Airtable can build and delivery hyper-specialized service models that deliver greater value to clients while freeing up valuable time for personal engagement and advice. Such service models systematize the core services, such as beneficiary check-in and ROTH reviews, and provide a quick, personalized check-in on those topics. Technology allows firms to scale and identify the clients who need attention. I call this “scaling your special,” and it’s allowing firms to deliver far deeper, more specialized advice.

With technology, scaling up doesn’t mean watering down.

By embracing digitalization, advisors can specialize and deepen their service models and profitably attract and retain a range of clients anywhere in the world. The expanded reach of digital platforms allows advisors to market their services more effectively, deliver deeper value to clients hyper-efficiently, and support rapid growth of their firms while maintaining profit margins.

The pandemic’s impact

The COVID-19 pandemic forced a rapid shift toward virtual interactions, accelerating what was already a growing trend in the profession. Financial advisors, who traditionally served local clients, found themselves working with clients remotely without issue. Consumers have grown comfortable with virtual meetings, providing a substantial opportunity for advisors to broaden their geographic reach and drive growth.

The ability to work remotely has allowed advisory firms to market themselves more broadly and provide specialized services. The pandemic has removed geographical barriers and increased consumer preferences for virtual interactions. By leveraging digital tools and platforms, advisors can attract and retain clients from anywhere in the world.

Rise of advice

These trends have intersected to spark a “great awakening” among consumers, who now seek financial advice in growing numbers regardless of assets or life stage. Young professionals, families burdened by debt, and retirees alike are recognizing the importance of financial planning. Consequently, there has never been a better time to be a financial planner.

Thriving advisory practices have capitalized on these trends by embracing intentional growth strategies and expanding the channels they use to include digital marketing like online blogs, social media, webinars, and podcasts. A growing segment of advisors has shifted to develop lighter service models and modernized fee models to cater to mid-market consumers. The idea of having a financial planner has become normalized, and the demand for advice will continue to grow.

Advisor demographics

While demand for financial advice continues to rise, the demographics of advisors presents a succession challenge. The profession is facing an aging workforce, with more advisors over 80 than there are under 30. This shortage of younger advisors entering the profession poses a capacity constraint, leaving growing firms struggling to keep up with consumer demand.

But the aging population among our profession also presents opportunities for younger advisors and firms. As a great wealth transfer occurs, younger advisors can tap into new client bases and leverage transitions from retiring advisors. As these new entrants bring fresh perspectives and digital fluency, these younger firms continue to innovate and drive growth in more modern ways.

Conclusion

The wealth advisory profession is undergoing a growth revolution, spurred by shifting times and trends. The face of the consumer has evolved and so have their preferences. The dawning digital age has empowered advisors to leverage technology, expand their capabilities, and reach a broader audience, profitably. The COVID-19 pandemic accelerated the adoption of virtual interactions, enabling advisors to connect with clients in new ways. And, as demand for advice rises, it is crucial for firms to address aging advisor demographics and embrace the opportunities they present.

Firms that recognize and ride the wave of these shifting tides are rapidly accelerating their growth, with advisors driving 2x, 3x, 4x, and even 5x growth in as many years leveraging these trends in their practices.

Stephanie Bogan is the CEO and chief possibility officer of Limitless Advisor Coaching. Join her and a group of advisors experiencing rapid growth for a free webcast on October 18: A Better Way to Build Your $1M Firm: 9 Shifts to Accelerate your Growth, Income and Freedom. Register here.

Visit www.LimitlessFA.life to learn more and sign up for Mojo Mail for ongoing insights.

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