Next-Gen and Established Advisors Report
Key Takeaways
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Methodology
The Firm of the Future: Putting Planning First
Placing a Heavy Emphasis on Technology’s Transformative Effect
The Driving Factor of Change: Modern Investors
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Why Advisors Invest in Technology
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This study uncovers several key differences in both approach and value proposition between Next-Gen Advisors and Established Advisors.
Introduction
Younger Financial Professionals Prioritize Financial Planning in their Practices
Younger Financial Professionals Champion Technology to Support Their Business
Next-Gen & Established Advisors Report
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“We have 52 company restaurants, making us the largest operator of the restaurant brand. So, we are right there next to the franchisee. We know exactly what it takes to run them and what it takes to build them and what the challenges are, be they labor or food or whatever.”
- Scott Deviney, CEO, Chicken Salad Chick
Popular media often pits Next-Gen and Established Advisors against one another in fundamentally different roles. While one built the wealth management industry into what it is today on a foundation of handshakes and trust, the other is positioned as the digital generation, ushering in a new, more efficient industry enabled by technology. However, these generational stereotypes may be overly simplistic. In our latest study on how advisors approach technology and digital transformation, both Next-Gen and Established Advisors portray a surprising number of similarities.
Key Takeaway
While both Next-Gen and Established Advisors invest in technology to improve productivity and provide a better client experience, Next-Gen Advisors are much more likely to invest in technology to differentiate from competitors.
The firm of the future is not only more technologically proficient, it’s also more focused on financial planning as its primary value proposition. The top priorities of Next-Gen and Established Advisors are reversed when it comes to delivering services.
More likely to work at a wirehouse or broker-dealer than Next-Gen Advisors, who prefer the registered investment advisor (RIA) model.
Most frequently delivered services are retirement income planning and investment management followed by financial planning.
Established Advisors
Tend to be life planners, not just retirement planners.
More likely to charge financial planning fees and less likely to rely on commission-based pricing.
View financial planning is critical to their success.
Primary services focus is on investment management, followed by financial planning and retirement income.
Next-Gen Advisors
Top 3 Most Frequently Delivered Services
“It’s a fairly reasonable way to get new guests in your restaurant, partly because third-party delivery is bringing them there.”
Both Next-Gen and Established Advisors have many of the same strategic initiatives for their firms when it comes to implementing and leveraging technology. However, there are some differences:
Use technology primarily to enhance client relationships.
More focused on technology that increased efficiency of the analysis, modelling and trading portion of their job than on client-facing software.
Use technology to enhance client convenience, placing higher emphasis on client portals, deliverables and ease of implementation.
Clearly place a higher emphasis on the role technology can play in improving the client experience.
Among Next-Gen Advisors, 39% believe technology is a differentiating factor for their firm, versus just 25% of Established Advisors.
Implement Digital Capabilities to Improve Client Experience
Implementing digital capabilities to improve the client experience is much more important to Next-Gen Advisors than it is to Established Advisors.
With this increased competition, Next-Gen and Established Advisors are leaning on technology in different ways to build, scale and serve a broader clientele of investors more efficiently and effectively than ever before.
The ability to invest your personal wealth has never been more mainstream and accessible than it is today. With crypto markets that never close, smartphone apps that shower confetti on the screen when a trade is placed, and portfolios built by algorithms, modern investors have a nearly infinite array of tools available to help them with investing, saving, and planning. And more options are coming to market all the time. With this increased competition, Next-Gen and Established Advisors are leaning on technology in different ways to build, scale and serve a broader clientele of investors more efficiently and effectively than ever before.
RBC Clearing & Custody, a division of RBC Capital Markets, LLC, Member NYSE/FINRA/SIPC
Methodology, data collection and analysis by WMIQ a division of WealthManagement.com and Informa Engage on behalf of RBC Clearing & Custody. Data collected March 5 through 21, 2022. Methodology conforms to accepted marketing research methods, practices and procedures.
OVERVIEW
METHODOLOGY
RESPONSE MOTIVATION
WMIQ, a division of WealthManagement.com/Informa Connect, in partnership with RBC Clearing & Custody conducted an online survey, The Next Generation of Financial Advisors, 433 professionals, March 2022.
Beginning on March 5, 2022, WealthManagement.com emailed invitations to participate in an online survey to active users. By March 21, 2022, Informa Engage had received 433 completed surveys.
To encourage prompt response and increase the response rate overall, a live link to the survey was included in the email invitation to route respondents directly to the online survey. The invitations and survey were branded with the WealthManagement.com name and logo in an effort to capitalize on user affinity for this valued brand. Each respondent was able to enter a drawing for a YETI 75 Tundra Cooler, valued at $450. RBC Clearing & Custody, a division of RBC Capital Markets, LLC, Member NYSE/FINRA/SIPC.
March 5 through 21, 2022. Methodology conforms to accepted marketing research methods, practices and procedures.
had received 433 completed surveys.
survey. The invitations and survey were branded with the WealthManagement.com name and logo in an effort to capitalize on user affinity for this valued brand. Each respondent was able to enter a drawing for a YETI 75 Tundra Cooler, valued at $450. RBC Clearing & Custody, a division of RBC Capital Markets, LLC, Member NYSE/FINRA/SIPC.
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Younger financial professionals champion technology to support their business
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Younger financial professionals prioritize financial planning in their practices
