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Top Three Trends Affecting Business

Top Three Trends Affecting Business

The pace of change in the financial services industry has never been more rapid.  Here’s our take on the three trends affecting business that may have the biggest impact on a financial advisor’s practice over the next five to 10 years.

  1. The Rise of Millennials

If demography is destiny, then advisors will soon be looking to a different generation for new business development. Millennials have surpassed Baby Boomers as the largest living generation, numbering 75.4 million versus 74.9 million.1  In less than 40 years Baby Boomers will shrink to a population of 16.6 million, while Millennials will peak at 81.1 million in 2036.2

Millennials are very different from previous generations in attitude, personality and perspective. Millennials are not inclined to do business with their “father’s broker.”  They interact, learn and collaborate much differently from previous generations.  Adapting to Millennials may require a greater social media presence, a more robust offering of mobile technology platforms and perhaps even employing a Millennial in your practice.

  1. Women Investors

In an industry historically dominated by men, women are controlling an increasing share of wealth in the U.S. In 2012, women controlled 51 percent of U.S. wealth, and it’s estimated that they will own 67 percent of all wealth by 2020.3

Despite the industry’s focus on “women and investing,” many advisors have failed to adjust their ways of communicating and respond to the distinctive values and objectives of women.

Adapting to women investors is not about the color of folders, or even being a female advisor, but offering an approach that is respectful of their budget-conscious attitude toward fees and reflects the way they want to learn and build their self-confidence.

  1. Robo Advisors

Robo advisors may be the biggest industry disruptor since Charles Schwab opened a discount brokerage firm in response to the deregulation of commissions. According to one study, robo advisor AUM may exceed $2.2 trillion in five years.4

Robo advisors threaten the business status quo by offering lower fees, meeting the preference of a new generation and offering a superior online experience.

Financial advisors who position themselves as active managers, create portfolios of low-cost ETFs, but charge a 1 percent fee or more, and whose client service model runs on paper may be most at risk.

Meeting this challenge may involve evolving your business model, starting with defining, articulating and broadening your value proposition to distinguish yourself from robo advice providers.


3 Wealth Management 2015 and Beyond: Trends and Challenges, CFA Institute, January 2015


See referenced disclosure(s) (1) at

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