As the independent advice industry evolves, advisors are spending less time coming into an office to manage portfolios and allocate assets, and much more time working on delivering comprehensive wealth management.
Charles Schwab released its annual “Independent Advisor Outlook Study” on Tuesday at the Schwab IMPACT conference in San Diego. Now in its 20th year, the study asks advisors to reflect on the past 10 years and to think ahead to the next 10.
Sixty-one percent of advisors said that over the next decade, the most critical issue they face is changing their service models to meet changing evolving needs.
“The role of the advisor is shifting, and today it can include estate planning, tax prep and legal work, even other value-added services like career and estate planning or life coaching,” said Bernie Clark, the executive vice president and head of Schwab Advisor Services. “Nothing is off the table anymore.”
More than three-quarters said technology would have an impact, and 94 percent said it will help them be more efficient. Tech is also helping aid the shift away from spending time in a physical office.
Attracting and retaining talent is another concern advisors have for the next 10 years, and the evolution of the industry is influencing how advisors hire younger employees. Most (81 percent) of advisors name “willingness to embrace change” as a characteristic they’re looking for. Advisors are also doing more today than 10 years ago to ensure their firms more closely resemble the demographics of their clients.
But some things never change. Most new clients still come through referrals, and the report found no evidence that this will change. Advisors still see their role as a fiduciary being at the center of their value proposition.
“We believe that collectively, we can continue to leave a mark on the world by improving the lives of the people we serve,” Clark said.
Overall, the industry continued its rapid growth. Average assets managed by independent firms increased to $339 million, up from $270 million in 2011, and the average number of clients increased from 338 to 425 in that same time period.