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Planning for Your Success in the Next Decade and Beyond

NAIFA has sponsored a research study, Advisor 2020, to help advisors position themselves for the opportunities that lie ahead. Developed by the GAMA Foundation, Advisor 2020 features two studies.

“Study One: The Market of the Future,” presents four future business scenarios for advisors to determine where they see opportunity and potential. The scenarios are increased competition for the affluent market, lifestyle management for the retiree market, financial planning for the middle market, and portable benefits for the professional market.

After reviewing these scenarios, advisors are encouraged to “drill into the major trends” (or market drivers) that will help them anticipate evolving client markets, the products and services that will provide value, and the types of partners who can increase their professional success.

Study One
The three primary market drivers that will shape advisors’ practices in 2020 are:

1) Baby boomers. Baby boomers control more than half of the nation’s wealth; advisors who choose to ignore this generation will do so at their own peril.

Among the opportunities for advisors focusing on this group is lifestyle management. To take advantage of this opportunity, however, advisors must understand their clients’ behaviors and manage their living environments (in addition to managing their financial assets). The barriers that separate financial management from health and property management are beginning to blur, the book points out. Advisors would be compensated by the value-added services they provide.

2) New generations and the underserved middle market. The wealth of the middle market is not as substantial as that of baby boomers, but growth in this sector makes them a force too large to ignore, according to the study. However, as middle-market households partake in pre-tax savings incentives such as 401(k) plans, they will have less disposable income, posing challenges for agents and financial advisors.

As a result, advisors will need to play a more significant role in educating middle-market consumers about the value they bring to the savings process, as opposed to explaining the features of investment products and other tools. Advisors also will need to work collaboratively with a team of professionals.

3) Changing business environment. Smaller businesses will drive the economy in 2020, Advisor 2020 predicts. Emerging businesses are less likely to offer defined-benefit plans and other financial benefits, and this business shift will create a growing underserved market for people who need insurance and financial products.

The need to provide more customized and comprehensive services to meet individual and small-group needs – including retirees, mobile professionals and the middle market – and the need to spend more time educating the middle market are among the reasons advisors may need to switch to a fee-based method of compensation.

Study Two
“Study Two: The Advisor of the Future,” the authors present the six change drivers for 2020:

1) Practice development in a diverse economy. Advisors will need to develop skills to serve growing diverse and niche markets.

2) The shifting needs of consumers and advisors. Advisors will need to find solutions that address the new risks to modern families, including single-parent families, unmarried couples, same-sex couples, and families formed by divorce and remarriage.

3) Technology for powerful sales and service. Advisors will have powerful customer relationship management systems that integrate social media and other data to provide sales and service insights anytime and anywhere.

4) Managing privacy and security.  Advisors will be increasingly networked and will have access to a wide variety of personal data about their customers. They will be expected to ensure that client and corporate data are used appropriately and are protected from increasing threats such as cybercrime.

5) Advanced tools and insights for advisors and consumers. Successful advisors will be more skilled in working with big data and translating it into practical information that they can use for their practices. They also will have better tools for gathering market intelligence and analyzing data.

6) Shifting business models. Market, technology and regulatory changes will force greater competition and consolidation in the industry. The middle market will grow based on new products, and many smaller firms will thrive by embracing a culture of shared values.

You can obtain a copy of Advisor 2020 from The insights you will gain from reading this resource will help you plan for your future and meet it on your own terms.


Ayo Mseka is editor-in-chief of Advisor Today, the official publication of the National Association of Insurance and Financial Advisors. Contact her at [email protected] .

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