Daily Archives: November 25, 2013

Financial planning: any new trend in sight?

Financial planning: Two hands squeeze a dollar. by T-Advisor

The immediate answer to the question at the top is clear: of course, a wide range of changes are taking places and creating next trends in the advisors industry. Beyond the crisis and the economic transformation that we all are living on, financial planning is moving through a wave of social and technological changes, apart from the effects on the current advisors’ tasks. We would like to underline the main ones:

  • The generation gap in the financial planning behaviour. People focus this behaviour linked not only with personal experiences, but mainly with social ones, conditioned by the economic and political environment (think about social security, health insurance or retirement). Older generations tend more to save money and healthy organize their accounts. Younger ones do not plan, design a budget or think so much about their future finances. Also, young people have less financial literacy and less knowledge about investment and financial products.
  • The influence of technology to plan our investments. Interactive experience, so experts, is going to be a very important trend in the next years. Tablets, mobile phones and apps are creating a self-sufficient little investor, who takes care for his money by himself from his device. Advisers will no longer control the planning experience and this trend will deeply change the industry. Moreover, sector companies will have to develop flexible tools for all devices and all kinds of browsers or operative systems, if they want to have a chance in the billion-app-world. By the way, they also will have to look heavily to the cloud.
  • The advisory industry will be conditioned by new ingredients. Technology will reduce costs to advisers, but also will pressure their customer fees. With the availability of new tools, private investors will access to markets at a very low price. But advisers should take the trend as a chance, because more people connected and interested in investments will be target for them if they are well-positioned. How? Taking into account social shifts in demography and longevity, which will create new priorities in investments. Apart of that, advisors will have to evolve into an all-in-one provider: tech tools, legal planning, career planning or even coaching.

To sum up, the advisory industry is facing a deep change in a changing world. Possibly, next three years are going to be critical and we are surely going to be witness of this transformation. Technology, effects of the social shifts linked to the end of the crisis and new players and models in financial planning are the main cards in this game.