Pershing CEO Lisa Dolly Pershing CEO Lisa Dolly.

The financial advisory industry is in the midst of a transformation due to challenges from increasing consolidation, changing client needs, new technologies and a growing shortage of talent, according to the CEO of Pershing, Lisa Dolly.

She expounded on these four trends as one of several keynote speakers at this week’s Insite conference in Orlando, Florida.

Bigger is better. “We should expect there will be much greater concentration of assets in fewer broker/dealers and RIAs,” said Dolly. Consolidation in the industry will continue as firms look to add efficiencies and private equity firms continue to finance acquisitions, especially of RIAs with $1 billion or more in assets under management. They certainly have the money for it —  $1.7 trillion in assets that are uninvested, said Dolly.

Life management trumps investment management. Clients want their financial advisors to provide more than asset management. They want help with their earnings — careers — and spending — “holistic planning,” said Dolly. They essentially want advisors who can successfully address the anxiety they experience over multiple money matters, according to Dolly.

Technology has yet to be exploited. “Our industry is lagging way behind” in the use of automation, robotics, self-service, artificial intelligence and biometrics, said Dolly, noting the benefits of each. AI, for example, can help predict client behavior, and biometrics, by improving personal recognition capabilities of software, can provide more cybersecurity. “Technological advances will happen … disrupting and improving the industry,” said Dolly.

The talent shortage will become much more severe. “We have an aging workforce and firms are struggling to attract talent,” Dolly said. “We should expect labor costs to increase and a significant need for technology to solve that problem,” which will also cost firms. On the labor front, she expects stronger demand not only for advisors but also for data engineers, regulatory experts and financial analysts.

Beyond these growing trends, the industry is at root about the people it serves, according to Dolly. “They will forget what you said, forget what you did but never forget how you made them feel.”

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