The rapid and profound changes taking place across the economy at large and within the financial services sector is having — and will continue to have — a profound impact on the way financial planners help clients plan for their futures, according to experts who spoke at the Canadian Institute of Financial Planners’ 16th annual national conference in Halifax on Monday.
“Disruption will not be a one-time event, but rather a continuous pressure to innovate that will shape customer behaviours, business models and the long-term structure of the financial services [sector],” said Tony Mahabir, president of the Geneva-based Convention of Independent Financial Advisors .
The aging population, longer lifespans, a greater need for retirement planning options and advice, and the embrace of digital platforms are key drivers leading to change within the financial services sector, Mahabir said. Specifically, replacement of employer-based pension plans will compel individuals to plan for their future — and although robo-advisors will temper that demand partially, complex scenarios will require a human financial advisor or financial planner.
Meeting these changing client demands requires new ways of working and an understanding of emerging consumer trends. These include personalization at each stage of life, new models for younger customers, and a greater reliance on data, Mahabir said. Thus, financial planners need to promote the value of professional, holistic advice from a financial planner actively while simultaneously understanding the appeal of automated advice.
“As financial planners, we have an opportunity to impact the world,” added Frank Paré, president of the Denver-based Financial Planning Association (FPA) and a financial planner in Oakland, Calif. “Picture the impact you have day to day on an individual or family. That’s pretty powerful.”
To that end, the FPA updated its primary aim earlier this year. The focus now is on elevating the profession to one that transforms lives through financial planning. “We have to carry that message forth,” said Paré. “We have to be present without products. That’s what financial planning is. If we are sitting with our clients, we should be on the same side as our clients.”
With each individual accomplishment, comes the growth of the profession, he added: “If we are successful, we will also raise the recognition and respect of financial planners.”