The evolution and expansion of the financial advisor role

By Jennifer Valdez, president of Americas, intelliflo

As the economic outlook continues to remain uncertain, people are growing more anxious about their financial health. In fact, 69% of Americans are concerned about their current financial situation, according to a recent intelliflo survey conducted by Harris Poll. This unease isn’t unique to a single age group; 64% of Gen Z (ages 18-25), 81% of Millennials (ages 26-41) and 75% of Gen X (ages 42-57) all reported concern with the current state of their finances.

This widespread economic uncertainty is accelerating the already evolving role of financial advisors. What was once often closer to a transactional relationship is quickly becoming more intimate. Advisors are being challenged to lead with deeper empathy, show up with a wider skill set and be able to advise on more aspects of life.

When clients inevitably come to advisors to discuss their concerns around their finances and the current economic climate, successful advisors are showing up with greater compassion. A deeper, two-way dialogue is especially important as volatile markets increase the risk of people making foolish financial mistakes. There is now a need and expectation for advisors to provide advice; requiring that they more deeply discuss clients’ long term plans, 10 to even 30 years out. Explaining to clients why they should stay the course requires more time and trust. These empathetic conversations can create a better client experience, while also deepening loyalty and retention.

Advisors are also increasingly expected to have a wider skill set, including the ability to provide sound guidance around life events and situations that fall outside of the traditional financial advisory relationship. For example, clients are more frequently seeking out advice on which insurance plans and options make the most sense for their unique scenarios. And as their parents age, Millennials are turning to their advisors for help on long term care and arrangements. These conversations can be emotionally charged, another example of why greater empathy is a needed trait of the modern advisor.

The problem is that advisors are already stretched thin, trying to serve their existing client base and grow their business without additional resources. To effectively meet these expanded needs and have the time to devote to deeper conversations on a wider variety of topics and situations, advisors will have to rely more heavily on technology to create efficiencies and a more robust client experience.

To accomplish more with less resources, advisors will start to move away from leveraging point solutions, which often don’t integrate or communicate well with one another, in favor of a platform approach to create more efficiencies and provide a more unified client experience. Such modern, digitally optimized technology enables firms to employ a hybrid advice model: a strategic, harmonious mix of digital and human advice. A hybrid approach automates simple tasks and lower-value exchanges, freeing up significant advisor time to focus on those deeper, high value client conversations.

Firms will increasingly rely on partnership models with third party vendors, looking to outsource key functions and support such as compliance, marketing, trading, reporting, etc. The previous desire to be fiercely independent is giving way as advisors realize the power of partnerships, especially during uncertain economic times. However, advisors must be sure their partners are thoroughly vetted and monitored on an ongoing basis; not all partners are created equal.

As the need for more widespread advice grows and the advisor role expands and evolves, financial advisory firms are being challenged with how to best prepare for the coming years and future proof their business models. By reevaluating what skills and areas advisors will need to cover and reprioritizing technology and outsourcing strategies, firms can be better positioned to grow client relationships and efficiencies while solidifying a competitive advantage – during any type of economic cycle.

About Author:

Jennifer Valdez is president of the Americas for intelliflo, a leading cloud-based technology platform for financial advisors.