As we approach the end of the year, it’s a good time to look back and reflect on what’s shaping the RIA market. We’ve experienced some unusual hurdles in the past two years that have had a huge impact on financial advisory trends.
Here’s how we see these changes affecting your RIA business for the foreseeable future.
Over the past year, many factors contributed to changing the current RIA landscape. Looking back, we see five major contributors that precipitated the undeniably and irrevocably altered RIA industry in 2022.
COVID threw a wrench in the normal business process for almost every industry back in 2020. In 2022, we saw the continued trickle-down impact of the pandemic keeping us from business as usual. Suffice it to say, the norms have changed.
Now, firms of all sizes have to be nimble and flexible. Advisors must offer continuity across multiple platforms, scale with increased virtual business, organize omnichannel communications, manage their teams virtually, and more.
The past few years have given advisors a great opportunity to step back and really consider their goals and services. Here is how we’ve seen COVID impact advisors across the board.
Over the past year, there has been a lot of speculation over whether a recession would occur and how bad it might get. Due to those concerns, we need to adapt to clients preparing for a recession, rising inflation costs which influence spending, and impacted investments due to the market downturn.
With so many unknowns ahead and stressors throughout the past two years, clients are understandably concerned about their financial futures. It’s important to help clients focus on their goals and ensure they feel comfortable staying invested in a downturned market. Risk-averse clients are causing advisors to adjust their services.
The entire industry essentially went virtual overnight due to COVID restrictions and lockdowns. In 2022, we did not see a return to business as usual. Instead, advisors are onboarding and converting prospects that they’ve never met in person, changing them into loyal clients.
Advisors use online advertising and a virtual presence to help draw in new leads. While clients were once nervous about using online portals and virtual conferencing tools, it’s now become the norm. As many areas opened back up for in-person, the RIA industry has taken on a more hybrid approach, with many virtual meetings and emailed communications.
We’ve seen more investors interested in a digital portal for 24/7 account access. Advisors have turned to digital tools and platforms to help them keep up with larger firms. The changeover to digital has been fast and revolutionary for the industry.
Finally, another change that impacted RIAs in 2022 stems from major changes in compliance.
Based on what advisors experienced in 2022, the major trends of this past year largely involved transformative technology solutions, relationship building, and succession preparation. Here are some of the specific trends we saw over the past year:
There are several 2022 RIA challenges and solutions that we expect to continue into 2023. Here are some of the top things we believe will remain a key part of the financial advisor’s role.
So, how can advisors get ready for the upcoming year? Here are four ways you can set yourself up for success.
Get your strategies for growth down on paper — don’t keep them in your head. This should include addressing questions like:
How are you bringing in clients to keep your business growing sustainably? The modern client strategy eliminates geographic constraints because of the tools available to support virtual connections. You are no longer limited to the community around you — the world is your oyster.
Advisors should also eliminate outdated approaches that exclude household members in the relevant discussion of family wealth management. Modern advisors are including the wife and adult children of the primary account holder in the discussion about investments and financial decisions. It’s crucial to listen to the next generation’s goals and concerns if you plan to continue with the account after the transfer of wealth.
Finally, it’s crucial that you understand the fears of your clients for a truly modern strategy. During uncertain times, advisors must be supportive and steadfast for their clients. Don’t avoid hard conversations because your clients might act on impulse instead of sound investing logic. AssetMark even offers a Market Volatility Guide and webinars to help you navigate these difficult conversations.
Business owners are better when they aren’t stretched between every task. AssetMark helps you reduce your workload so you can focus on the most pressing concerns facing your business.
Tools like AssetMark Marketing Advantage and AssetMark WealthBuilder℠ can help you build trust and broaden your client base. With so many available tools, sorting through the possibilities to build a cohesive tech stack can be an overwhelming task.
Get an AssetMark tech assessment to see what tools could help you streamline your services or offer more robust solutions. We do our due diligence to suggest the best tools from cutting-edge providers, helping you access the right technology to support your business.
Read more in The Simple Guide to the Financial Advisor Tech Stack
Finally, get ongoing professional support to help you stay on top of industry changes. Work with an AssetMark business consultant to examine your fee structure, operational efficiencies, outsourcing opportunities, expansion, and more. Our Advisor Acceleration Academy and Leadership Advantage programs are examples of how we help advisors grow their businesses.
You can provide high net-worth solutions and navigate market volatility with our team backing your every move. We help simplify the buyout or succession process — no matter how far out that is for you. With our help, you can focus on your future and the needs of your clients.
Ready to get started? Reach out to our team today to take the first step.
AssetMark is a leading provider of extensive wealth management and technology solutions that help financial advisors meet the ever-changing needs of their clients and businesses.
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