Professionalism a challenge for financial planners
The need to project the image of professionalism in the industry will present a continuing challenge for financial planners in the future, according to a white paper released by CoreData.
CoreData's Planning for Success noted that financial planners will need to develop a service that fulfils two requirements.
"[They will] need to provide a client value proposition that increases the emotional switching costs for clients and secondly, they will need to offer sophisticated services which clients would not be able to replicate, to play into the hands of the growing cohort of sophisticated investors," the report stated.
The increased focus on professionalism was driven by both the industry and legislative changes, and the introduction of the fiduciary duty is forcing financial advisers to get on board, according to the paper.
"Evolution may be hard for some financial advisers who may choose to 'ship out' rather than 'shape up', but those that go the distance will surely benefit from more engaged and loyal clients."
The future may also see more horizontal - rather than vertical - acquisitions, with the increasing number of mergers between financial planning and non-planning practices on the horizon.
"Financial planners are no longer just facing competition from other planners; competitive pressures are emerging from accountants, business lawyers and stockbrokers as well," the paper said.
"From a collaborative point of view, the accounting and financial planning professions are highly complementary, and such tie-ups may be beneficial to planners as trust is generally high between clients and accountants."
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