New generations of clients are becoming increasingly self-reliant in managing their investments. With the ease of opening online brokerage accounts, such as Robinhood, Charles Schwab, and Fidelity, clients are now empowered to take a more hands-on approach to their financial portfolios. Deloitte predicts that a substantial portion of individual investors’ assets will be directly managed by these investors, bypassing the need for financial advisors.
Furthermore, the growth of robo-advisors like SoFi and Wealthfront is poised to reach a significant milestone, with an expected $16 trillion in assets under management by 2025. Robo-advisors offer advantages such as low fees, well-diversified portfolios, automated rebalancing, and the removal of human biases and emotions, resulting in potentially higher returns.
In this evolving landscape, financial advisors face competition not only from their industry peers but also from robo-advisors and online brokers, all vying for their leadership position. The future holds promise for financial advisors, but to stay ahead, they must innovate and demonstrate added value to their clients.
Today’s clients are not just looking for well-informed market discussions; they seek comprehensive financial planning, tailor-made asset allocation strategies to meet their financial objectives, and effective tax minimization strategies. They are increasingly tax-conscious, aware of the significant impact taxes can have on long-term performance. Financial advisors who can systematically manage tax implications by, for instance, harvesting losses, are highly sought after.
Additionally, the demand for customization is on the rise. Clients want portfolios that align with their unique needs and values. With a growing focus on environmental, social, and governance (ESG) factors, investors value financial advisors’ ability to create portfolios tailored to their diversification requirements and ESG concerns. As new generations of investors take center stage in the wealth management landscape, the shift toward disintermediation is expected to continue.
Adapting to these changing dynamics requires innovative solutions. Citec’s cutting-edge AI solutions for financial advisors empower professionals to meet the evolving needs of their clients, delivering tailored financial strategies, efficient tax management, and customized portfolios that align with both financial objectives and ESG considerations. Stay ahead of the curve with Citec and provide your clients with the value they demand in today’s financial landscape.