(Image: ThinkStock)

Here’s how the financial advisory business is likely to change in the next 10 to 15 years, according to a new survey from consulting firm Practical Perspectives.

More than half of the financial advisors working today won’t be working full time 10 years from now, and more full-service broker-dealers will have retreated than independent BDs or RIAs. But after 15 years RIAs will be leading the departures, followed by IBDs.

Practical Perspectives surveyed more than 350 advisors across the country online, almost half managing $50 million to just under $250 million in assets. Most work as solo practitioners or as members of a small team. The purpose of the survey was to learn how advisors themselves view their future and the challenges ahead.

Much has been reported about the changing role of financial advisors, moving from a focus on investment management, which has become commoditized, to financial planning with technology providing more efficiencies.

“What’s new here is that advisors are now believing it,” says Howard Schneider, president of Practical Perspectives.

Among the survey’s key findings:

  • Most advisors expect that planning and education will be the key drivers of the value they deliver to clients going forward — a focus that many RIAs and IBDs have already adopted.
  • More than half of the BDs surveyed, however, view investment advisor as their primary role serving current and prospective clients.
  • Roughly 60% of advisors across all three channels identify attracting new clients as their leading challenge.
  • Nearly two-thirds of advisors expect that the use of digital or technology platforms will represent the most significant shift in serving clients, followed by an increased focus on holistic services (51%). Robo-advisors are not seen as a threat because, says Schneider, “Robos are not serving the clients they focus on.”
  • Compliance, however, is seen as a key risk impacting advisors’ ability to meet client needs, highlighted by more than 50% of BDs and roughly 40% of IBDs and RIAs.
  • About half of IBDs and RIAs view streamlining and scaling their practice as a major challenge for the future compared to about 30% of BDs.
  • More advisors are confident they are very well prepared to serve current clients (66%) than prospective ones (53%).
  • More than half of advisors (55%) expect baby boomers will be their primary client segment five years from now, while about one-third expect their primary client then will be Gen Xers.
  • Close to 90% of advisors expect their practices will continue to grow.