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Report: Planners Fall Short of Making Plans Of Their Own

Financial planners are more caught up in the day-to-day activities of running a business, rather than what’s ahead, according to a new survey by SEI and the Financial Planning Association.

Most financial planners are failing to plan for their own futures, according to a new report by SEI and the Financial Planning Association. The report indicates that more than half of financial planners surveyed do not have a business plan in place yet.

SEI and the FPA surveyed 436 financial planners in August about their own goals and ambitions, but also asked about the future of wealth management. (The survey also included the perspective of 686 investors with assets of more than $100,000.) While 18% of financial planners didn’t believe a business plan of their own was necessary, more than four in 10 planners wanted to create one but haven't been able to do so.

“Our research concludes that financial planners aren’t thinking much about how things will change in the future. They’re just not thinking that far ahead. In some ways they’re caught up in the day-to-day minutiae of putting out fires and running successful businesses,” the report read. “Digging a little deeper, we found it interesting that both younger/smaller firms, and the largest/most established firms, are the ones that just haven’t gotten around to it yet.”

When asked about business goals they’d like to achieve in the next five to 10 years, 66% of respondents reported that they wanted to significantly boost their assets under management. Slightly less than half of respondents wanted to adopt new workflows that would streamline their work, and 35% reported they’d want to prepare for succession or sell their business.

The survey results also indicated some potentially disquieting signs of how advisors may react to a transitioning industry, with only 22% of advisors expecting they’d have to adopt their approach to clients and their business in the future.

“We view this as a very troubling figure – one that’s out of touch with both changing consumer trends and technological innovation,” the report read.

About 42% of respondents did believe they’d have to customize client experiences due to their needs. And one in five expected they’d have to segment their clients by size or need and adjust their processes accordingly, though the authors of the report questioned how financial planners would scale businesses to accommodate such customization. In the coming years, nearly half of planners expected they’d be offering more health insurance planning (including Medicare counseling), and slightly fewer advisors thought they’d need to incorporate digital asset management and financial cybersecurity training into plans with clients (at 37% and 36%, respectively).

John Anderson, managing director of practice management solutions at Independent Advisor Solutions by SEI, said he was worried that planners “caught up in day-to-day tasks or facing a digital inertia” may not be devoting the time they need to developing plans that would sustain their businesses.

“Emboldened investors are impacting every aspect of the industry. Many advisers and planners are at an inflection point,” he said. “Today’s pace of change is likely as slow as it will ever be, and advisers and planners cannot afford to take a wait-and-see approach to the future.”

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