4 Ways Advisory Firms Must Adjust as Advisors Retire - PreciseFP

4 Ways Advisory Firms Must Adjust as Advisors Retire

From new investors and products to changing regulations and economic uncertainty, the financial services industry is always changing. But one of the biggest changes firms face now and in the future is the wave of advisors retiring.

Over the next 10 years, 37% of financial advisors, who control 40% of total industry assets, are expected to retire — signaling a major shift for firms and their clients. The ripple effect of these retirements will be felt throughout the industry. But instead of seeing these changes as challenges, firms can view them as an opportunity to adapt and adjust to provide relevant, high-quality services to clients.

Here are four ways firms can evolve as advisors retire:

Prepare Now for a Smooth Transition Tomorrow 

Many clients build strong relationships with their advisors, especially if they have worked with them for a long time. When their advisor retires, it can cause uncertainty for clients. To retain their business and ensure a smooth transition, firms must have processes to shift the retiring advisor’s client load to someone else. One in four advisors nearing retirement lacks a succession plan, meaning firms must prioritize preparing for a smooth transition.

When a firm learns that an advisor is planning to retire, they need to notify clients and reassure them that although their contact is changing, the service the firm provides will remain unchanged. Introduce clients to new advisors before their current advisor retires so they can pass on any information and get on the same page.

Document management is also crucial for a smooth transition. When client files and information are organized and stored securely in a platform like Docupace, the new advisor can easily access the information they need to build relationships with their newly inherited clients.

Embrace Technology…and a New Approach

Technology is the catalyst for almost every change in wealth management. Investors increasingly want to use technology to stay on top of their finances and communicate with advisors. As advisors retire, consider how your firm uses technology — is there an opportunity to adopt new technology or change your approach to prepare your firm for the future and attract new clients?

The right technology helps all aspects of the client/advisor relationship, from streamlining data storage and back-office work for smoother processes to improving communication and empowering clients to understand their finances. Adopting automation and AI can also attract new advisors and clients and prepare your firm for future advancements.

Expand Beyond Your Safe Zone 

While financial advisors used to focus solely on helping clients reach their financial goals, many clients want holistic advice to get their retirement, legal, and tax services from a single advisor or firm. One survey found that 71% of millennials prefer to do most of their financial business at one institution that can bring together the specialists and services they need.

Advisors retiring is a natural time to re-think your current offerings and look for potential gaps that can be filled with new advisors or by re-skilling current advisors. Firms can look for advisors with diverse backgrounds and qualifications, such as certifications or degrees in multiple areas. You can also partner with other professionals to provide one-stop advice for clients.

Recruit Long-Term Talent

As advisors retire, firms are likely left with gaps and may need to hire or recruit new advisors. With a new generation of investors entering the market, consider this a time to re-evaluate the traditional advisor skillset and recruit with an eye for the future. With the right approach, you can recruit young talent that can grow and evolve with your firm.

Opportunities for growth and development are a huge draw for advisors of all experience levels. Consider ways the firm can promote development opportunities and support an advisor’s career. But with an industry changing so rapidly, it can be challenging to keep up with new trends and changes while serving clients. Access to the latest training, mentoring, industry experts, and other resources helps advisors stay connected. Offering chances for advisors to grow into leadership roles can also help bring in top talent.

You can also consider your benefits and pay packages, especially during economic uncertainty. To entice younger and experienced advisors, many firms are offering creative compensation packages.

Now is the perfect moment to consider assembling a multi-generational office. Embracing innovative solutions like PreciseFP’s data gathering software, which eliminates data entry hassles, aligns perfectly with the aspirations of young professionals looking to enhance client service. Click here to explore further and sign up for a free trial of PreciseFP’s data gathering software today.

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