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A Brave New World for Financial Advisors

Apr 25, 2018

I had recently come to believe that we, as financial advisors, are practicing in unprecedented times. This notion was only reinforced during an April 2018 Bloomberg breakfast where the media giant announced the findings from its recent survey.

This event was actually to discuss the findings from just the second phase of the study—one that will ultimately contain four parts where approximately 289,000 financial advisors were surveyed.   

So what did Bloomberg learn about from this vast sample size of financial advisors? Quite a bit, actually.

There were several attributes that should give our industry both hope and pause. A few of the more noteworthy ones on the plus side, financial advisors:

  • Place a high priority on understanding clients’ needs and returns expectations.
  • Focus on innovation to service clients.
  • Are bullish on the new tax law, and the U.S. and global economies.
  • Spend more time reading about tax matters, hedge funds and private equity, and politics.
  • View technology very positively.

Conversely, these respondent attributes are a cause for concern and should be addressed by the financial advisor industry:

  • The number of financial advisors is decreasing—either by leaving the industry or retiring.
  • Those managing $250 million and above are more likely to leave their present firm.
  • There is reduced financial advisors attendance at industry events.
  • There is a notable lack of social media use to acquire and inform clients (which also poses a significant opportunity).
  • Government regulation and compliance requirements are becoming more of a challenging hurdle for current and future financial advisors.

Is the damage to the financial advisor universe irreversible? Of course not. Along with the valuable, detailed information mentioned above, the survey came away with a wealth of actionable remedies, such as:

  • Promoting technology success stories and provide leading-edge training.
  • Offering additional, unbiased information and making it more easily consumed.
  • Placing a renewed emphasis on client service.
  • Focusing on better communicating the investment premise.
  • Understanding that most clients will change financial advisors; however, the wealth transfer pie is more than $58 trillion.
  • Not shying away from suggesting fixed-income in client asset allocations.

Every industry has its economic, demographic, regulatory, and other challenges. As global economies trend toward service-oriented businesses, financial advisors are in an enviable position. With a little foresight and action, they can become even more indispensable to clients. 

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Timothy Speiss

Timothy Speiss is a Tax Partner in the Private Client Services Group and Vice President of EisnerAmper Wealth Planning LLC. He chairs our Asia Practice and is a member of the firm’s community service group, EisnerAmper Cares.

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