A ‘New Wave’ for Investor Strategy

Convergence of Technology and Client Engagement

OAKS, PA–(Marketwired – Feb 10, 2015) – Demographic, technological, and market changes are dramatically impacting the way financial advisors interact with clients and define successful client relationships according to "The Next Wave of Financial Planning," released today by SEI (NASDAQ: SEIC).

The rapidly changing landscape is affecting every aspect of the industry and is forcing advisors to change the way they deliver advice. The paper reveals a number of key strategies that advisors will need to ensure long-term success. Co-authored by SEI and Michael Kitces, CFP publisher of "Nerds Eye View," the paper includes firsthand insights from industry influencers and original research from SEI.

"For any advisor that hopes to sustain and grow their practice, the future is now," said John Anderson, Managing Director and Head of Practice Management Services for the SEI Advisor Network. "The successful financial advisors of tomorrow will look very different from those of yesterday in the way they interact with clients and how they leverage technology. In order to be among the most successful there are a number of steps that financial advisors should be taking now."

"Financial planning is in the midst of a generational shift, amongst both financial planners themselves and the clients they serve," said Kitces. "Coupled with the accelerating pace of technology change, this transition period provides advisors the opportunity to take their practice to the next level, but also presents the risk of falling dangerously behind the curve.

Our paper on 'The Next Wave of Financial Planning' was created to help advisors understand where they need to focus now, to position themselves to excel in this new reality." "Technology has already had a transformative effect on financial advisors over the last decade," said Raef Lee, Managing Director and Head of New Services and Strategic Partnerships for the SEI Advisor Network. "In the years ahead, the impact of more recent developments like robo-advisors will continue to push traditional advisors to find new ways to leverage technology leading to a whole new breed of what we like to call techno-advisors."

The eight specific strategies outlined in the paper provide advisors with a way to structure their firm's operations to enable sustainability and growth. These actionable steps can be incorporated by firms of all sizes and do not require capital expenses to deliver results.

In addition to these strategies, the paper also notes some of the key drivers of change within the financial advisory industry. Each points to the continued convergence of technology and client engagement, and include:

  • The Evolution of Advisors and Planners
    Nearly two-thirds of financial advisors classify themselves as financial planners or wealth managers, yet only 26 percent actually offer services that meet the definition of being a financial planner or wealth manager, according to the paper. True wealth managers need to clearly communicate the higher level of service they offer to clients, and what makes them more than just a traditional investment manager.
  • Multifaceted Market Segments
    According to the paper, nearly two-thirds of the U.S. population was born after 1964, the year that is considered the cut-off for baby boomers. These shifting demographics mean advisors will need to adjust service strategies to account for generational differences.
  • Innovative Financial Planning Tools
    Technology has changed the way that advisors share information with their clients. What used to be done by pen and paper can now be done with financial planning software. According to the paper, a surprising 29 percent of financial advisors still do not use financial planning software.
  • The Effect of Robo-Advisors
    Seen by some as a potential low-cost alternative to a true financial advisor, the paper suggests it's more likely that the future investor will require a mix of robo-advisor strategies with more personalized human service.
Financial planning is in the midst of a generational shift, amongst both financial planners themselves and the clients they serve

To view the full whitepaper, please go here

To view an infographic highlighting key research results, please go here.


About The SEI Advisor Network
The SEI Advisor Network provides financial advisors with turnkey wealth management services through outsourced investment strategies, administration and technology platforms, and practice management programs. It is through these services that SEI helps advisors save time, grow revenues, and differentiate themselves in the market.
With a history of financial strength, stability, and transparency, the SEI Advisor Network has been serving the independent financial advisor market for more than 20 years, has over 6,100 advisors who work with SEI, and $47 billion in advisors' assets under management (as of December 31, 2014). The SEI Advisor Network is a strategic business unit of SEI. For more information, visit seic.com/advisors.

About SEI
SEI (NASDAQ: SEIC) is a leading global provider of investment processing, investment management, and investment operations solutions that help corporations, financial institutions, financial advisors, and ultra-high-net-worth families create and manage wealth. As of December 31, 2014, through its subsidiaries and partnerships in which the company has a significant interest, SEI manages or administers $625 billion in mutual fund and pooled or separately managed assets, including $253 billion in assets under management and $372 billion in client assets under administration. For more information, visit seic.com.

About Michael Kitces
Michael Kitces is a Partner and the Director of Research for Pinnacle Advisory Group, a private wealth management firm located in Columbia, Maryland, that oversees approximately $1.4 billion of client assets. In addition, he is the co-founder of the XY Planning Network, the practitioner editor of the Journal of Financial Planning, and the publisher of the e-newsletter The Kitces Report and the popular financial planning industry blog Nerd's Eye View through his website Kitces.com, dedicated to advancing knowledge in financial planning.