The wealth management industry is at an inflection point. Shifting demographics, evolving client expectations and transformative innovations are creating challenges for financial advisors and their firms. However, as with most challenges, those facing the wealth management industry also bring tremendous opportunities for advisors and firms willing and able to adapt and position their businesses for strategic growth. For most, this means jettisoning legacy systems, manual processes and outdated notions of client service and embracing innovative technology.
Let's take a look at three areas that have been top of mind for advisors I’ve spoken with recently. If you haven’t asked yourself these questions, now might be a good time.
Changing Demographics
Demographics are changing the wealth management industry. How will you scale your practice to take advantage of the coming opportunities?
The aging population is having an impact on our industry in several ways. With older clients transferring their wealth, advisors must find their most loyal and profitable relationships among members of the next generation. This is a challenge and an opportunity.
The “Great Wealth Transfer” is already in full swing, meaning trillions of dollars are changing hands each year. Cerulli Associates projects that wealth transferred between generations through 2048 will total $124 trillion.
With assets in motion, advisors must focus on both retention strategies and attracting next-generation clients to counter potential attrition. Developing strong relationships with clients’ spouses and children is a good place to start.
There may be notable differences in service and product preferences among spouses and younger clients compared to current client demographics, and they will gravitate to advisors best prepared to meet their needs.
There may be notable differences in service and product preferences among spouses and younger clients.
Advisors can leverage technology to create a more personalized client experience. Next Gen “digital natives” especially expect their interactions with advisors to be as effortless as it is with any of their other service providers. Financial planning software, investment management platforms and other tools need to be modern and intuitive. An advisor's use of technology should be in service of making clients feel seen through consistent and personalized touchpoints.
Client Expectations
Today’s clients are looking for more from their advisors. Are you ready to answer the call?
It’s not just the Next Gen clients who are looking for more from their financial advisors. Recent research shows that 74% of clients expect their financial advisors to provide personalized, seamless and comprehensive advice across all financial matters. And they are willing to change advisors and firms to find the services they desire.
While seeking better investment performance remains the top reason clients switch or move money away from their primary financial advisors, service issues are high on the list. The 2025 EY Global Wealth Research Report details how clients want better access to investment products, an enhanced digital tools and technology experience, increased access to specialists and a greater focus on family wealth advice.
The EY report shows that wealthy clients consider the breadth and depth of services as a driving factor when selecting a wealth management provider. The proportion of affluent clients citing service as critical to their choice has grown from 36% to 50% over the past two years.
Many smaller firms and sole practitioners are unable to provide clients with the personalized services they are increasingly demanding. This is where the promise of technology can offer scalability to streamline processes, create customized strategies, automate touchpoints and free up advisors’ time to strengthen existing relationships while prospecting for new ones.
Automation And AI
Automation and artificial intelligence are the future. Can you embrace innovation while fostering deeper personal relationships with clients?
The innovations that have been transforming the wealth management industry over the past 20 years are only accelerating. AI is a game-changer, especially when it comes to automating time-consuming administrative tasks and analyzing client data to develop sophisticated growth strategies. The firms and advisors who can simultaneously leverage the benefits of technology while effectively fostering the human relationships at the core of their businesses are the ones best positioned for success in the coming years.
Few affluent people will be quick to trust their financial security to a chatbot.
As revolutionary as technology is, it will not replace advisors and client-facing support staff. Just like the promised robo-advisor takeover never materialized, few affluent people will be quick to trust their financial security to a chatbot.
However, AI and automation will be crucial for staying competitive and growing market share in both the near- and long-term. The benefits can’t be ignored, including streamlined interfaces to complete tasks without jumping between systems, AI assistants to reduce frustration by offering fast answers and proactive support, automated lead prioritization and real-time visibility into prospect progress to jumpstart client acquisition and the support of a cloud-based, unified, AI-powered platform to facilitate personalized, data-driven wealth, insurance, tax and estate planning.
Clients are looking to their advisors for more than just core investment advice. To maintain their value, advisors and firms need to elevate their role beyond financial planning and portfolio management by positioning themselves as holistic financial and non-financial professional service providers. The only way to do this at scale is to partner with a firm that embraces technology, encourages the adoption of new tools and supports organic growth initiatives.
Pat Hynes is the President of Prudential Advisors, with a network of over 2,800 financial professionals.
