Planner of the future?
The successful financial planner of the future will have more in common with a medical specialist than what we now know as a financial planner.
This is one of the startling predictions made by US-based Undiscovered Managers in a recent report on the future of the financial planning business.
The report, The Future of the Financial Advisory Business Part II: Strategies for Small Business, predicts that financial planners will need to become specialists in a niche in order to stave off an inevitable squeeze in margins. This does not mean targeting a group based on age or net worth, but selecting "a segment of the population that share similar, complex problems", and then providing a solution to their problems.
Undiscovered Managers argues that only niche financial planning businesses will survive the upcoming revenue drought and cost hike. Those who fail to make the transition to a niche business will face revenue of 0.5 per cent of funds under administration, less than half of what most successful planners are charging today.
A niche business will be able to charge a premium for its services in much the same way as a medical specialist charges for their talents. Medical specialists such as surgeons, chiropractors, dentists and podiatrists are able to charge a premium for their services because they provide solutions for the complex problems suffered by a relatively small segment of the population. Undiscovered Managers reckons the successful financial planner of the future will
Recommended for you
A quarter of advisers who commenced on the FAR within the last two years have already switched licensees or practices, adding validity to practice owners’ professional year (PY) concerns.
Integrated wealth and financial services group Rethink has launched a financial planning arm called Rethink Wealth to expand beyond property investing and into holistic wealth management.
While adviser numbers continue to slowly creep back up, the latest Wealth Data analysis reveals they would actually be in the green for the calendar year if it weren’t for so many losses in the limited advice space.
Iress has appointed a chief AI officer to spearhead the fintech’s strategic focus on AI, with chief executive Marcus Price describing how the technology opens the doors to a “new frontier for wealth advice”.
