The spotlight that focuses on the advisor community is shining more brightly than it has for some time. Modern advisors are being forced to adapt to change constantly simply in order to remain relevant and competitive, but what about the future of the industry? What does the future look like for the next generation of advisors?
“We are probably living through the most tumultuous and disruptive age for the financial services industry and more specifically advisor-client relationships,” says Cary List, President & CEO of the Financial Planning Standards Council
(FPSC). “The degree of uncertainty around everything is cause for a lot of apprehension, but there is also tremendous opportunity coming out of it for those who really want to distinguish themselves.”
The FPSC realizes the importance of keeping up with the changes in the industry and is looking at how it can address the fresh challenges that advisors will face going forward. Over the next 18-24 months, the FPSC is rolling out a number of changes to its certifications. “We are very much concerned about making sure that we not only stay relevant as a certification body and that the CFP certification is relevant, but that we remain ahead of the game in leading the profession,” List says. “We need to ensure that our certification continues to lead the way for the next generation of planners and clients.”
List does believe there is a risk of people being discouraged from entering the industry due to the scrutiny that advisors are currently under. However, he also envisages a growing demand for professional financial planners in the future. Although fintech and robo-advisors are disrupting the space and helping with sales functions and product selection, the need for the human touch will become even more crucial. Clients will require even more help to weave through the complexities of the markets and their personal finances.
“I think that what we’re probably going to find, in the short-term, that fewer people enter into the industry until the dust settles,” List says. “But, we will also see a growing emerging demand for professional financial planners, so that may lead to some gaps in service. A lot of people will be retiring from the industry in the next decade and there is going to be greater need than ever before for true professionals to step up. But, I don’t think there are enough new advisors coming through the system.”
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