In a digitally driven world, clients are no longer limited to doing business with a local advisor. Consumers can now choose from a wide array of services delivered by advisors thousands of miles away.
While this trend started a few years before COVID-19 came on the scene, the pandemic has accelerated the push to automate and digitize many tasks currently performed by advisors.
The 21st century may be unkind to financial professionals who are unaware and unprepared.
Financial Professionals Face Tough Challenges
1. Smaller firms will find it harder to compete. While we are just beginning to see the aftermath of the economic downturn, it’s easy to predict that small businesses will continue to face an uphill climb. Smaller businesses affected also include insurance and advisory firms with fewer than ten employees. With the money and workforce to take advantage of digital trends, established corporations have a definite edge going into the 21st Century.
2. Practice growth could be painstakingly slow. In addition to pressure from corporations, a weakened economy means independent agents and advisors will find growing their practices to be slower, more costly, and time-consuming. Effective marketing and advertising must become more than an afterthought or a “necessary evil.”
3. Fee-based and fee-only advisors may find it more difficult to justify their fees. While large corporate practices have the means to create full suites of valuable client services, smaller advisory firms will have a tougher time proving they bring more value to the table. High-net-worth clients know they have choices and want to ensure they are getting the attention and services for which they are willing to pay.