We asked several industry leaders to speculate on what the wealth management industry will look like in the year 2037. This one is from Kendrick Wakeman, CEO and founder of FinMason.
While the future is always difficult to predict, there are two trends we can extrapolate with confidence: Technology will advance, and millennials will run the country. The net effect: Life will be more flexible and more portable, producing some profound side effects for the wealth management industry.
As the tendrils of the Internet expand and virtual reality becomes commonplace, more people will work remotely and operate as consultants or contractors. Job-hopping will increase and the portability of retirement savings will become a priority. Combined with the continuation of withering litigation, this will all but wipe out employer-sponsored savings plans. Instead, Americans will primarily save for their retirement via government-sponsored defined contribution plans or personal, IRA-type accounts.
The vision of a one-stop financial supermarket that started in the 80s will finally be achieved, except it will be an independent technology platform that effectively serves as a person’s complete financial dashboard. These will be much more robust than what is available currently and will provide people with unprecedented flexibility in choosing financial service providers. Banks, insurance companies, accountants and advisors will “plug in” to a person’s financial dashboard much the same way apps are installed or deleted from a phone. Switching from one financial services provider to another will be a simple and seamless matter, allowing consumers to select best-of-breed providers for all aspects of their financial lives.
In the wealth management space, these personal dashboards will allow consumers to decouple asset custody from financial planning, further accelerating the migration of advisors from large wirehouses to independent practices. But also with the prevalence of personal financial dashboards, financial planners will be able to develop a richer financial picture of their clients, which in turn will allow them to provide better, more holistic advice. Most advisors will be millennials, as comfortable with using advanced technology as they are with a knife and fork. They will leverage technology to offer more advice to more people at a lower cost.
There will be adjustments, most for the better. Retirement savings will enter a golden age. Between robo advisors, digitally-assisted advisors and human advisors, everyone will have real access to some form of professional financial advice—not just the wealthy. With some good innovation and a dollop of disruption, we will defeat the retirement crisis once and for all.