The trends financial advisors should adapt to build business this year


The past year proved to be a time of evolution for the financial planning industry, with advisors increasingly seeking AI-aided autonomy. Such advances have the potential to appeal to a new generation of tech-savvy Gen Z and millennial clients, who in turn expect heightened transparency

I see 2024 as continuing and intensifying those trends — trends that advisors must heed and commit to or risk falling behind. 

Greg Freeman of Wellington Wealth Strategies

Greg Freeman, founder and partner of Wellington Wealth Strategies

We’ll keep going independent
The number of advisors going independent will ramp up aggressively — and not just in 2024 but throughout the next decade. A new report from Fidelity shows that approximately one in six advisors has switched from a corporate firm to go independent over the past five years. 

Firms that want to keep advisors from going independent to avoid major recruiting headaches must make monumental changes, such as reworking fee structures, emphasizing the client-advisor relationship and integrating more flexibility and autonomy into the workplace. Offering an independent channel option is another way for firms to retain advisors and expand recruiting — a path we may see major wirehouses take this year.

We’ll embrace AI — so it won’t replace us
This will be a landmark year for technology in financial planning and wealth management, with AI adoption leading the charge. AI can be advisors’ most transformative technological advancement in the workplace, helping to make informed and personalized decisions for clients’ financial planning while streamlining tasks to help them work more efficiently.

READ MORE: Independent and hybrid RIA channels are adding advisors the fastest, Cerulli report says

Yet not all advisors are convinced. Thirty-one percent of respondents to an 2023 Advisor360° Connected Wealth Report survey believe AI will be a threat to the industry. On the flip side, the study revealed that younger advisors believe generative AI tools are poised to do more good than harm when fully unleashed upon wealth management, signaling a significant intergenerational difference of opinions on the impact of AI. 

AI will not replace us if we embrace it. Those resistant to AI must learn to adapt to the technology to remain competitive in the new year and beyond.

We’ll give Gen Z the advice they need and want
In the next 20 years, more than $72 trillion of wealth will transfer from high net worth and ultrahigh net worth individuals to their heirs. Generational changes drastically impact families’ and individuals’ finances, so this is the year to invest in clients regardless of their youth or asset level. 

The challenge — and the opportunity — is that young clients approach money differently than their elders. While 66% of Americans overall say their financial planning needs improvement, according to a Northwestern Mutual study, that percentage rises to 79% when it comes to the Gen Z and millennial cohorts. Their concerns span one end of the wealth spectrum to the other, but student loan debt stands out, accounting for 17% and 10% of Gen Z and millennials’ top sources of personal debt, respectively. 

Generational changes drastically impact families’ and individuals’ finances, so advisors need to prepare to support clients regardless of their age and financial status. However, advisors are not ready for this transition, with studies showing that the majority of heirs do not expect to stick with the parent’s financial advisor. Advisors ignoring potential Gen X, millennial and Gen Z clients will be disadvantaged and, therefore, must start engaging in conversations with clients’ kids early on in the relationship to understand their financial priorities better.

Finally, let’s be clear
Wealth management faces a huge trust gap with U.S. consumers. According to one study (albeit performed in 2018), only 35% of investors believe their advisor always acts in their best interest. The pressure, therefore, is on us to secure the future of the profession by building trust, a goal that can be accomplished through increased transparency — especially given today’s increasingly tech-savvy client.

Demonstrate transparency by giving clients access to tools, dashboards or portals so that they see the same information you see about their assets. Providing such access allows them to learn more about the mechanics and the philosophy behind specific economic trends and understand the logic, pricing and potential outcomes of investment and portfolio recommendations.



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