US Financial Planning Industry: Trends

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US Financial Planning Industry: Trends

Five trends being seen specific to investment managers and/or financial planners in the U.S. are (1) offering impact/sustainable investment opportunities, (2) more firms and jobs, (3) changing fee models, (4) cryptocurrency allocation and interest, and (5) increasing demand for women as financial advisors.

1. Offering Impact/Sustainable Investment Opportunities

2. More Firms, Jobs, & Clients

  • More clients are seeking the services of RIAs. As one source put it, "[m]ore RIAs are providing financial advice to more clients than ever."
  • In 2019, the number of RIA clients increased by nine million. That rise in the number of clients was at least partially attributed to robo advisors becoming increasingly popular.
  • This trend was noted by CityWire and Brandon Gaille.

3. Changing Fee Models

4. Cryptocurrency Allocation & Interest

  • Allocation to and interest in cryptocurrency are on the rise among financial planners.
  • The Bitwise/ETF Trends 2020 Benchmark Survey polled over "400 financial advisors" in December 2019 about how they are using cryptoassets in their clients' portfolios.
  • The survey found that in 2020, there will be an increase to 13% "of advisors allocating to crypto in client portfolios" up from the previous level of 6%.
  • Among the financial advisors surveyed, 76% had clients ask them questions in 2019 about cryptocurrency.
  • Financial advisors are becoming more-and-more optimistic about the price of bitcoin. The December 2019 survey found that 64% of them anticipate that bitcoin prices will increase "over the next five years." That marked a 9% year-over-year increase on that same question.
  • More specifically, by 2024, 35% of the financial advisors anticipate that bitcoin prices will "double or more."
  • Five percent of the financial advisors anticipate bitcoin prices increasing by at least ten-times their value by 2024.
  • The ETF Trends CEO/Founder stated the following: "Crypto continues to be top-of-mind for advisors searching out new and uncorrelated sources of return. The survey results clearly indicate growing interest in crypto from advisors and their clients alike."
  • This trend was noted by Forbes, EFT Trends, and Bitwise.

5. Increasing Demand for Women as Financial Advisors

  • An August 2019 article in the Wall Street Journal explained how the demand for financial advisors who are women is increasing among clients and thus firms in turn.
  • UBS's Head of Strategic Client Segments has seen a notice rise in prospective clients' requests "to work with female financial advisers."
  • The desire for diversity is a key factor driving this trend, as clients want a mix of the people giving them advice. Another key factor driving this trend is the widespread discussion of gender issues in society.
  • These client demands have resulted in more women being hired as financial advisors. For example, the training program for financial advisors at Merrill Lynch Wealth Management achieved its highest number of women ever, as it rose to about 3,500 female employees in 2019 and that number "is increasingly yearly."
  • UBS and Morgan Stanley are other companies hiring more female financial advisers in response to the demands from clients to work with female financial advisors.
  • This trend was noted by the Wall Street Journal and Fortune Magazine.
Sources
Sources