Applied Financial Planning
BusinessFIT: Navigating towards the advice practice of tomorrow (Part two)

As the saying goes, change is the only constant in life. Whether it's the level of regulatory scrutiny and reporting requirements, the way in which clients choose to engage with advisers, their changing values and ideas around what constitutes the 'Great Australian Dream', or the influence of automation, digitisation and Artificial Intelligence (AI) and its increasingly powerful ability to transform back office processes and improve efficiency.

These trends will all have a profound impact upon the ways that advisers not just do business, but how they market themselves and their services to clients as we head towards 2020 and 2025.

The current challenge is that financial advice - and the financial services industry at large - has not been able to keep pace with these consumer-driven changes.

Based on the four scenarios developed in Zurich's workshop with Anders Sorman-Nilsson and our industry thought leaders, we have explored four key recommendations, which not only detail the challenges and opportunities that lie in each major trend currently afoot, but also offer practical tips on how advisers can leverage these trends and make manageable changes to their businesses to survive and thrive over the coming decade.

  1. Broadening role of adviser as financial lifestyle coach
With the soaring price of property in major capital cities in Australia, a large proportion of Millennials could be rethinking their financial markers of success, moving away from home ownership and towards other assets such as stocks, and lifestyle options such as travelling or starting their own online business.

Without bricks and mortar and the daily commute to the office tethering future Australians to one place, we could see a considerable change in the way financial advisers interact with their clients, the types of products and services they offer, as well as the method in which they deliver their services. Advisers should be preparing themselves to cater for a new generation of remotely-based, ethically-minded, and tech-savvy individuals.

In this scenario, the biggest impact for an adviser will be navigating the shift in their role from a technical specialist who views their role as helping clients achieve a particular financial goal by selling a product, to a more holistic "financial lifestyle coach", who truly gets to understand their clients' lifestyles, dreams and motivations to help them achieve their goals in a way that suits their individual needs.

In short, it will not be about the money. Cash in short, may no longer be king. At least not in the traditional sense.

"Clients want to be excited about their financial future. The sale of a product is irrelevant to them. Having tools that they can engage with are important, so when they interact with their adviser, they feel as though they are being supported on their journey." - Tim Deamer, Crosbie Wealth.

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