The Financial Advisor Channel - US - March 2012
The strengthening of the economy has been a boon for the advisor market. Assets under management have rebounded to levels not seen since before the 2008 crisis and most advisors expect to keep growing their businesses. Baby Boomers are beginning to retire and will require financial assistance to help manage their assets. In addition, the recession has left a mark on the younger generations who are now more cognizant of the dangers inherent in not planning for the future, and many are more amenable to the idea of financial advice than ever before. Social media, the advertising darling of the moment, is being embraced by many advisors, although compliance concerns keep usage lower than it might otherwise be. As firms figure out how to address those concerns with standardized procedures or new technology (or both) many advisors will become more active in the media and learn how to use it to their best advantage.
While there are several positive trends within the advisor industry, there are challenges as well. The internet is a primary source of information for investors of all ages, and many people are looking at it as an alternative to an advisor. The industry is also aging, with the great majority of advisors over the age of 30, and the average age of the Financial Planning Association membership at 53. Advisors need to be thinking about succession plans and figuring out ways to bring younger people into the industry— and then keep them. With the retention rate of young advisors at approximately 20%, the future may see too few advisors for too many clients.
What you need to know
- Now that having a secure retirement has replaced buying a home as the American dream, what adjustments should advisors make to their planning strategies?
- How does the increasing number of college-bound Americans offer opportunity to advisors? What demographic should be of most interest to advisors?
- How is the internet changing the nature of the advisory business? Will clients expect more or less from advisors due to online information that is available to everyone?
- How is the rise of the hybrid RIA model affecting wirehouses?
- How has the financial crisis and ensuing difficult economy affected investors’ perceptions of advisors?
- How are firms overcoming the compliance issues related to social media?
- What are the challenges advisors are facing in trying to grow their business?
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