Advisors must offer collaboration, convenience: IIAC

The financial services industry is at a critical juncture, as clients’ needs change and technology expands.

For example, clients — especially younger ones — are more sophisticated, tech savvy and expect deeper relationships with advisors. And firms increasingly compete to deliver services and online tools demanded by clients.

Read: Discount broker tools in ‘best interest’ of clients: Questrade

Sure, you’ve heard this all before. But these changes bear repeating if the industry is to embrace them and move ahead.

In his latest letter from the president, Ian Russell, IIAC president and CEO, shares what he learned from the annual SIFMA private client conference in Phoenix.

Russell highlights industry changes and says investing trends have “thrown the U.S. wealth management industry into the cauldron of structural change and shakeout, not dissimilar to the structural adjustments that flowed from the institutional collapse in the 2008–09 financial crash.”

To move forward, he says advisors must:

• articulate their value to clients, such as being collaborators to meet life objectives; and
• meet client demands for value and convenience, such as offering passively managed beta, smart beta and alternative investments.

Read: ETFs the investment of choice for younger clients

Further, firms must find ways to attract a new generation of advisors, he says, noting the average age of advisors is 56.

Russell concludes that successful firms will be those that adapt “to the evolving demands of the still-dominant and wealthy baby boomers and growing market influence of the millennials.”

Read: 37% of boomers question if they have enough savings

Indeed, meeting the demands of different demographics is sure to prove challenging. While the focus is often on millennials as business disrupters, boomers remain front and centre in the shorter term. Data from StatsCan’s 2016 census show that the number of Canadians who are 65 or older grew 20% between 2011 and 2016. That’s the largest increase for the age group in 70 years, and the highest increase in the proportion of seniors since Confederation.

Read Russell’s full letter.

Staff, with files from The Canadian Press

The Canadian Press is a national news agency headquartered in Toronto and founded in 1917.