A new report by Envestnet looks at the trends currently shaping the financial advisory industry, including new growth with retirement guidance, artificial intelligence (AI), technology, and more.
According to the report published by Envestnet’s Market Intelligence team, “Trends to Watch in 2024”, financial advisors have several opportunities in the retirement market, thanks to many small-to-medium-sized businesses looking to introduce workplace retirement plans, along with expansions offered with SECURE 2.0 and technological innovations.
“To not only improve service delivery but also stay competitive, it’s crucial for firms and advisors to keep pace with these developments, addressing challenges through a holistic, integrated platform,” said Chris Shutler, head of Strategic Development and Market Intelligence for Envestnet, in a statement.
The firm, who recently partnered with retirement service provider Empower on a full-service 401(k) plan, believes continued development to holistic advice and financial wellness tools proves that advisors can see growth in workplace benefits.
“Retirement investors who are better informed about their complete financial picture are in a strong position to make better decisions,” said Joe Smolen, senior vice president of Core and Institutional Markets at Empower.
AI evolution
Another popular trend anticipated to continue into 2024 are AI tools and services, as research indicates a growing demand for personalized services achievable through data aggregation and next-best-action insights. According to Envestnet’s reports, 60% of advisors say they see potential for AI tools to improve their businesses or advice to clients but have yet to implement them.
Of the firms utilizing AI-powered services, many say they are seeing improved client interactions and enhanced efficiency, among other benefits, according to Envestnet.
“AI-powered next best actions will disrupt the standard advisor workflow,” said Craig Iskowitz of the Ezra Group, who is quoted in Envestnet’s report. “These systems will drive efficiency, productivity and sales results to unheard of levels.”
Three-in-one solutions
Envestnet’s report highlights a demand among advisors for end-to-end technology platforms and improved integrations, beyond the single sign-on capabilities. Additionally, firms want to improve adoption and utilization rates to make the most of their investments, and specifically look for client engagement tools and custody workflow improvements.
According to the report, 61% of advisors want a three-in-one bundled feature that includes a financial technology software, platform, and solution.
“Increasingly, we’ve seen more of our clients looking to consolidate and streamline the technology and solutions their advisors utilize, to provide a more unified experience for customers and make it easier for them to do business,” added Shutler.
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