As I contemplated my final column in light of my retirement, Janet Levaux, IA editor-in-chief, asked me to make some predictions about the next decade. I begged off predictions, per se, because circumstances are changing so fast.
I especially do not fully comprehend how the coronavirus pandemic, economic disaster it spawned, government response and insecurity of clients will influence how advisors function going forward.
The best I can do is to share some observations about our industry and to encourage members of this profession to organize around some common problems and common opportunities in order to fulfill their vision of what this business and their role in it will be.
Consider these four main areas to make an impact:
1. Needs of the Individual
The vast majority of lower- and middle-class people are not exposed to education, guidance or advice on navigating financial choices.
The absence of financial literacy education is shameful considering how much pride Americans take in our so-called culture of independence, entrepreneurship, accountability and personal responsibility.
It is hardly reasonable for us to expect parents who lack this knowledge to impart key lessons to their children.
Nor is it reasonable to expect woefully-funded public schools to make this information a priority when their communities do not even see it as an issue. How can we help?
2. Needs of Clients
While investment advice has been the foundation of client engagement, financial planning has risen to be a key component of many relationships. The profession has an opportunity to demonstrate the value of guiding clients through complex financial choices beyond asset allocation and ROI.
At some point, the reporting will need to become more standardized around decision-making and impacts, complete with ratios and common-sizing data and benchmarks. Clients want to see how their choices affect their lives, families, work and communities.
