This is a good news/bad news story. First, the bad news: The chances of the traditional wealth-management business model working in the future are slim to none.

Here’s the good news: This change is not going to happen overnight, and you can do something to prevent it from hurting your business, starting today. The first step is to recognize the five key trends that are changing the face of the financial advisory industry.

Trend 1: Millennial investors are a force.

Millennials now are between about 25 and 40 years old. Historically, that’s the period when prior generations were well into their careers, had started families and had come to accept that they need to take their financial lives seriously.

Millennials are no exception, but what they are looking for financially is a bit different than from what their baby boomer parents have looked for. Studies of millennial investors show that less than 15% are using digital technology to invest by themselves.

The bad news is that roughly 20-25% of them work exclusively with an advisor already. However, the remaining millennial investors are either searching or learning — as they want to get up to speed on financial basics. This spells “opportunity” for advisors who offer the education millennials are looking for.

Today, through 24/7 digital-based educational technology platforms, millennials are seeking to learn the intricacies of the financial markets, cash flow, investments, education planning, etc. They want to learn.

The “Google it” generation is seeking the finance education they didn’t receive in high school and college en masse. If you provide them with online education, where do you think they will turn when they don’t want to do it on their own anymore?

Trend 2: Transparency is expanding to the operational experience.

There are two key “experiences” in an advisory firm: the client experience (CX) and the operational experience (OX). As the name implies, CX is what a client experiences, feels and sees throughout their journey with your organization; it includes things like how many meetings they attend throughout a given year.

But OX is behind the scenes — what’s under the surface that gets completed each day in carrying out the services you offer. Some examples are how trades get placed, how investment reporting is done, how financial plans get produced, how advice gets determined, etc.

The introduction of new technology and digital solutions is beginning to change OX. In particular, clients want to be involved in and understand what’s happening under the surface and have the “choice” to do it themselves if they want to.

Previously, many advisory firms have prided themselves on what they “do for the client.” In today’s world, it’s much more about what you and the client can do together — interdependently — than all the services you offer to the clients independently.

Trend 3: Holistic advice has finally caught on and is sweeping through advisory firms.

While it’s true that 85% of the wealth in the United States is controlled by baby boomers, all demographic client segments are changing their wealth-management expectations, as millennials provide them with a different perspective on their own finances.

For instance, “holistic” advice is rapidly gaining market share. While holistic advice — that is, financial advisory services that consider all aspects of clients’ lives beyond just their finances — never reached critical acceptance with boomers and Generation X, it appears to resonate with millennials.

In 2018, for example, just 9% of millennial investors opted for holistic advice from their advisors. But at the current growth rate, 30% of all advisory clients will be using it by 2025. This is big news for financial advisory firms already offering holistic advice within their wealth- management and investment-management models.

The bad news? “How” holistic advice is being delivered is changing, as well. Often, it is being delivered more in a “coaching” and “counseling” type of relationship in a separate department within the financial advisory firm.

In the past, holistic advice in a “traditional” advisory firm mainly was offered by the financial advisor also reviewing the investment allocation and the detailed financial plan. Now, we are seeing more specialization happening among advisors.

In some firms, a client may have an investment advisor, a financial advisor and a financial coach/counselor — three people, not one. The days of financial advisors doing it all themselves are disappearing; instead, specialization means the client has a relationship with three or four people within one firm, depending on his or her situation.

Trend 4. Hybrid pricing structures are in demand.

On Twitter recently, I read about fee compression. There are two sides to this debate: those who believe it’s happening and those who don’t. To be clear, I am in the camp of those who don’t believe it’s happening; that’s because basic economics would tell you that if the price of something falls, the price of something else is rising.

We’ve seen the price of investment management fees fall, but the price of financial planning and holistic financial advice is on the rise. This means, we don’t have total AUM fee compression; it simply means we have fee diversification.

In other words, hybrid fee models are taking hold — giving investors more choices in how they can work with advisors. In doing so, we are seeing more people interested in financial advice than ever before.

This is good news because it means there’s room for everyone. Of course, it assumes you can clearly articulate and explain what you are able to do for a client and that you aren’t trying to do it all.

This trend also makes it possible for firms to work with client accounts of $400,000 or less and to do so profitability. While many traditional advisory firms generally don’t work with clients in this asset range, more advisory firms likely will work together to do so in the future — by referring clients to each other based upon their speciality, like having lawyers.

Trend 5. Solo advisors are increasing in value.

Due to technological advances, solo advisors can work with larger numbers of clients than before, while generating little overhead and making inordinately high profit margins.

With so many advisory firms and venture capital investors looking to grow firms through acquisitions rather than via organic growth, firms adopting solo models now find their valuations at surprisingly high levels.

For the past 20 years, many advisory firm consultants believed that solo firms were going to be eaten up by the consolidation of larger firms. It’s time to stop believing that, as it’s not actually happening.

What is happening is as the large firms get larger, they are validating the solo models — lifting their values, too. If you were 25 years old again with a $1 million-plus firm valuation, would you cash in now? Or wait to see what happens in the future?

The solos are the ones dominating right now. They are getting rich through their profit margins and getting rich as they watch their firm value rise at the level of the large firms. As the large firms continue to consolidate — paying high valuation prices in the process — they are further validating the value of smaller firms.

As has often been the case in its 50-year history, the independent advisory industry is evolving through pricing changes, new technologies and the impact of the next generation of clients — all of which have created new challenges and opportunities for firm owners and their teams.