OAKS, Pa., Dec. 17, 2019 /PRNewswire/ -- A new study
conducted by Independent Advisor Solutions by SEI (NASDAQ: SEIC)
highlights changing demographics and investor demands as top
factors shaping the financial advice industry in 2020. The research
explores advisors' outlook on various market, client and business
factors heading into the new year.
"While advisors have acknowledged the need to adapt the client
experience in order to survive in the future and meet evolving
investor demands, our research shows the strategy to do so remains
an elusive target today for most advisors," said John Anderson, Head of Practice Management
Solutions at Independent Advisor Solutions. "Despite this, advisors
seem optimistic, yet somewhat cautious about the future and the
prospects it may bring."
Market Outlook
- Advisors expect a downturn within the next one to two
years. When asked when they expect the next market downturn,
the majority of advisors (42%) said in 2021, while 27% percent
believe the downturn will occur sooner in 2020.
- Geopolitical uncertainty remains top of mind for advisors
and clients. Despite the downturn sentiment, only 21% of
advisors said a big market correction was the top worrisome factor
for themselves and their clients heading into 2020. More than half
(64%) cited geopolitical uncertainty, including the presidential
election, impeachment, trade war and Brexit, as the top
concern.
- Client focus on short-term performance is still a
challenge. When asked to consider broader industry trends,
advisors ranked client focus on short-term performance as one of
their top concerns (32%) for their practice moving forward.
Client Experience
- Customization remains king. When asked how they see the
client experience/process evolving over the next five to 10 years,
most advisors (32%) said they will customize every client
experience based upon specific client needs, while 26% of advisors
expect to segment clients by size/need and tailor the experience
and services by segment.
- Advisor goals are not aligned with investor demands.
While advisors recognize the evolving investor and need to adapt
their client experience accordingly, only 14% of advisors cited
improving the investor experience as their top goal for 2020.
Similarly, just 11% of advisors chose refining their client niche
to help grow their businesses, and only 1% said changing the way
they charge fees as a top goal, highlighting the disconnect of
advisors' expectations and their immediate goals for 2020.
Business Outlook and Competitive Landscape
- Advisors are optimistic about business opportunities.
More than half of advisors (62%) cited the ability to articulate
their value-add and create new offerings for clients through
segmentation and niche identification as a business opportunity
they would like to take advantage of over the next one to two
years. A similar amount of advisors (56%) said technology to
enhance the client experience is the greatest opportunity, with
millennial investors looking for advice as the third highest
selected opportunity (40%).
- The future is bright. Almost half of responding advisors
(45%) believe it will be easier to grow their businesses over the
next five to 10 years, despite their geopolitical and market
concerns. Eighteen percent think younger investors' use of robo or
hybrid advice platforms will be a business growth challenge.
Meanwhile, just 7% of advisors said the lack of time and budgets
for adopting the necessary technology is a hurdle for future
business growth.
Methodology
SEI conducted the financial advisor survey online from
Dec. 2, 2019 to Dec. 13, 2019. The survey generated responses
from 400 independent financial advisors, representing clients and
non-clients of SEI.
About Independent Advisor Solutions by SEI
Independent Advisor Solutions by SEI provides independent
financial advisors with wealth management services through
outsourced investment strategies, administration and technology
services, and practice management programs. It is through these
services that SEI helps advisors save time, grow revenues, and
differentiate themselves in the market. With a history of financial
strength, stability, and transparency, Independent Advisor
Solutions has been serving the independent financial advisor market
for more than 25 years, has 7,400 advisors who work with SEI, and
$67.7 billion in advisors' assets
under management (as of Sept. 30,
2019). Independent Advisor Solutions is a strategic business
unit of SEI. For more information, visit
seic.com/advisors.
About SEI
After 50 years in business, SEI (NASDAQ:SEIC) remains a leading
global provider of investment processing, investment management,
and investment operations solutions that help corporations,
financial institutions, financial advisors, and
ultra-high-net-worth families create and manage wealth. As of
Sept. 30, 2019, through its
subsidiaries and partnerships in which the company has a
significant interest, SEI manages, advises or administers
$1 trillion in hedge, private equity,
mutual fund and pooled or separately managed assets, including
$335 billion in assets under
management and $662 billion in client
assets under administration. For more information, visit
seic.com.
Company Contact
Leslie Wojcik
SEI
lwojcik@seic.com
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SOURCE SEI Investments Company