Is Financial Advising a Dying Industry? A Future-Forward Look
Financial professionals are increasingly asking themselves, “Is financial advising a dying industry?” With technological advancements such as the advent of robo-advisors and an increased reliance on digital tools and artificial intelligence, Certified Financial Planners (CFPs) worldwide share concerns about the industry.
With resilience, evolution, and technological integration, the financial services industry will continue progressing as a vital and growing field. According to the BLS, financial advisor jobs are growing at a much faster rate (13%) than the national average for all jobs (3%).
Asset-Map is a tool many financial advisors use to enhance their practices and create positive client experiences. By embracing new technologies, financial planners can remain valuable to clients needing their services.
In this article, we’ll discuss how the advisory industry can adapt to changing financial practices and remain relevant for years. Read on to learn why financial advising is not a dying industry.
The Reality of Financial Advising Today
In reality, financial advising has remained a valuable industry and continues to grow over time. According to Google Trends, the search team “financial advisor” has maintained steady interest over the past five years. As mentioned above, financial planners' employment opportunities are also rising dramatically.
Additionally, the number of people in the United States approaching retirement age is at an all-time high. More Americans than ever are expected to turn 65 between now and 2027 due to the high number of “baby boomers.” This has resulted in many people turning to financial advisors to help them prepare for retirement.
Other factors driving demand for personalized financial advice include:
Educational debt. In 2024, over 50% of students from public four-year universities have student loan debt, and the average debt per borrower is $28,950 per borrower.
Retirement planning. With Social Security costs becoming too high to cover with taxes by 2035, retirement planning for young professionals is more important than ever.
Rise of niche markets. Niche markets such as impact investing or social responsibility-focused portfolios are gaining popularity among investors and require personalized financial guidance.
Americans are wealthier than ever. As more people acquire wealth, wealth management services have become highly sought after. These high-net-worth individuals seek guidance in diversifying their investments and asset management.
The Evolving Role of Financial Advisors
The role of financial advisors is changing rather than disappearing. In the past decade or so, the role of financial advisors has shifted. Long gone are the days when financial advisors were only sought after for investment advice and to sell financial products like mutual funds and life insurance. Now, modern clients are looking for comprehensive financial planning services that span from teaching them how to pay down credit card debt to retirement planning and estate planning to investment management and more.
Advisors are increasingly needed for complex financial planning, such as enterprise planning, behavioral coaching, and specialized financial strategies. Although the evolution of the financial advising landscape has been gradual, successful advisors must adapt to remain valuable in the industry.
For instance, 64% percent of millennials have investments, many of which are in cryptocurrency. Crypto is relatively new, and many investors seek guidance from financial advisors for this specialized form of investing. This was not part of a financial advisor’s role in years past, but advisors have had to learn and adapt to new market conditions and the next generation’s investment models.
Technology as an Enabler, Not a Replacement
Technological advancements have changed the way the financial advisory industry operates. With robo-advisors becoming a popular tool for affordable investment portfolio management, many financial advisors worry that such innovations may cost them their clients. However, technologies such as robo-advisors should be viewed as enablers rather than replacements for human advisors. Financial advisors are still highly relevant in today’s market despite technological advancements.
Technology complements the work of human financial advisors and can help them better serve clients. Free or low-cost financial planning tools don’t provide the level of guidance and assistance a skilled financial advisor can. These tools can, however, raise financial literacy and kickstart prospective clients’ interest in working with a financial professional to meet their financial goals. With more people becoming financially literate, terms like “asset allocation” and “tax-loss harvesting” are more common in conversations today.
Additionally, technologies such as Asset-Map are designed specifically for financial advisors and their clients. Asset-Map is a premier financial planning software that provides a visual experience to help advisors and clients get on the same page. This tool and others can streamline client consultations and uncover gaps in financial plans to help you better address client needs.
Building a Sustainable Practice in the Modern Era
As a financial advisor in the modern era, you must work to stay relevant and competitive. Growing your client base is key to building a sustainable financial advising practice. Whether you work for an advisory firm or are an entrepreneur, there are several ways to grow your client base and scale your practice.
Embracing Digital Tools
Digital tools are designed to enhance your practice and create more streamlined client interactions. With Customer Relationship Management (CRM) systems and tools like Asset-Map, you can bring your financial practice to the next level. Embrace how technology can elevate your services and help you stay ahead of the curve.
Continuing Education
Continuously educating yourself on the latest financial industry news and earning CE credits as a CFP is essential for running a successful practice. Stay up-to-date with financial planning topics, business models, and investments to best serve your clients.
Expanding Service Offerings
Expanding your service offerings can help you gain access to new market sectors. By providing new and unique services, you can add new clients and AUM, get more referrals, and expand your book of business.
Investing in Digital Marketing
Digital marketing is essential for new advisors because it is one of the best ways to gain attention from prospective clients. Using social media platforms like LinkedIn and Facebook to promote your personal finance services extends your reach beyond word-of-mouth alone. Additionally, digital marketing is an affordable means of getting your name out there online.
Overall, scaling your financial advising practice takes hard work and dedication but is well worth the investment.
Enhancing Client Engagement in the Digital Age
Maintaining high levels of client engagement and trust is critical as the financial advising industry continues to evolve. After all, you are helping your clients make crucial financial decisions that affect their well-being.
Using digital tools that enhance transparency, personalize communication, and deliver tailored financial solutions is an excellent strategy for keeping clients engaged.
Asset-Map’s features can help financial advisors strengthen client relationships and build trust through enhanced visualization of financial plans and goals.
Join the Future of Financial Advising with Asset-Map
Although the financial advising industry has transformed in recent years, the future of the financial advising industry remains bright. The financial advisory industry is not dying — in fact, it’s becoming more important than ever. With the rising aging population and the advancement of technology, financial advisors are playing significant roles in Americans’ financial futures.
The bottom line: Be bold and adapt to the ever-changing landscape of financial advising. Embrace the challenge and secure the right tools to stay on top. Explore how Asset-Map’s features can enhance your financial advisory practice and help you step into the future with confidence.