I believe there are a number of signs that indicate a coming renaissance in personal financial advice. These signs started to show oddly enough, right after the market crisis of 2008.
After 2008, clients of financial advisors were leaving their advisors, which one would think is a normal occurrence after such a dramatic market downturn. However, for the first time, numbers of fee-only advisors were also getting blamed for not predicting the market meltdown. Prior to 2008, fee-only advisors usually lost a client only through death or divorce. Getting blamed for the market was entirely new and shocking in many ways.Because of 2008 and irrational reasons for being fired by their clients, advisors began to awaken that they needed to be more proactive in marketing their practices than they did prior. Their near-exclusive reliance on automatic referrals and a bull market was being realized as a mistake in retrospect. This awakening began slowly, but has been gathering momentum ever since. Proof of this awakening is evident in the number of marketing-oriented technology companies that now exist to serve advisors. Further proof is the astounding number of Fin-Tech solutions that address an incredible spectrum of financial-oriented need from saving to investing to debt reduction to affordable housing. Every week another announcement is made of a fin-tech firm getting funded. To be fair, however, advisors are no where near they need to be in terms of marketing competency and allocated budget relative to their peers in all other industries, but the trend and markers that advisors finally realize they need to market are clear and unmistakable.The adoption of new technology by advisors coupled with the creation of new solutions by the supply side means that advisors will be able to better serve clients, and more profoundly, be able to serve more net new clients at all types of income and asset levels. The efficiency rate of the advisors and the utility rate of the investor are going to increase in lockstep.Related:
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Suze Orman: Another Personality Bashing AdvisorsHuman resource departments have realized that financial wellness is equally important as physical well-being. This has been reported via various studies, but not yet widely reported in mainstream media, but it soon will be. Corporate America recognizing that all things financial being important to their employees is yet another marker in the coming renaissance.I recently read that a popular actress and writer, Robin Thede is writing a comedy series for ABC where the central character is a financial advisor. The news is a clear marker that there is a move afoot from hollywood that financial advice is getting closer to be in the mainstream consciousness, and given it’s a comedy, and this advisor is being portrayed as successful, a positive model, unlike almost all advisors on the small and large screens prior. If this show actually makes it to network TV and is successful, this will be a meaningful step toward financial advice being recognized as the profession it should be. Of course the devil is in the details, if the writing only provides for a momentary glimpse into personal financial advice, the impact will be less than it otherwise could be.All these markers are obviously good for advisors, but more importantly it is very good for consumers and investors who desperately need for this renaissance to happen sooner than later. Waving a magic wand, if the renaissance can start before the next prolonged major market correction, that would be ideal. But as long as it happens, as I think it will and soon, that’s what is important.
