5 trends transforming financial advice

| 27 Jun 2022

Jack Sharry, co-chair of MMI's Digital Advice Community, a member of the Next Chapter Executive Leadership Advisory Board, sees five trends in the race to improve financial advice.

  1. More people are retiring than ever and want and need advice

As many as 12,000 people turn 65 each day. They have more assets than any previous generation, and their millennial children will have even more. Just as boomers have changed everything, they are redefining retirement, increasingly wanting financial advice to be “hyper-personalised”.


  1. Investors will move beyond the shiny-object syndrome to household-level management

Investors too often do the wrong things, whether with mutual funds, tax shelters, annuities, managed accounts, tech stocks, day trading, exchange-traded funds (ETFs), crypto and direct indexing.Many of these products have their place, but none is a silver bullet. To help clients maximise their retirement incomes, financial advisers will be challenged to coordinate multiple holdings, accounts and products, as well as factor in costs, risks, and taxes. They must lead their clients toward coordinated household management.


  1. Workplace retirement, wealth and asset management, annuities and alternatives are converging

Tomorrow’s clients begin their retirement journey today through workplace plans. As their assets grow, they start understanding the value of advisory services. Increasingly, they seek an all-inclusive approach to financial well-being that financial advisers must be able to provide.


  1. Technology is powering the embrace of comprehensive advice platforms

The human brain is not wired to do algorithms or the necessary math to manage risks, costs, and tax liabilities at the household level. One-size-fits-all rules of the thumb are inadequate. Spreadsheeting takes hours – time financial advisers do not have. Software can and should automate much of it.Increasingly firms are creating comprehensive advice platforms to meet clients’ needs for true portfolio advice and retirement income planning.


  1. Human advice will always matter

Boomers are swarming financial advisers’ offices. Millennials are in their 30s and early 40s. Many financial advisers assumed that people from these generations would shun human advice – but they were wrong.Both generations recognise the value of human advice and software's essential role in delivering hyper-personalised financial plans and executing them for the best results. And financial advisers would do well to optimise technology to become more efficient and provide better advice.