What is Keeping Financial Advisors Up at Night? A 2018 Outlook

Last month, I recapped our growth in 2017, which we followed with a press release detailing what topics and trends our readers were interested in throughout the year. In the release, we noted that financial advisors are the fastest growing audience on Harvest. This group now accounts for nearly 70,000 monthly active users, over 300% more than a year prior.

According to our data, two trending topics that stood out to advisors on our platform were “robo” platforms and practice management. To me, this suggests that advisors have been reconciling not only with how best to manage client portfolios, but also simultaneously trying to justify their existence.

One month into the new year, here is how I see these trends playing out for the remainder of 2018:


Robo-advisors are projected to manage $385 billion of client assets by 2021, according to Cerulli Associates. Betterment, Personal Capital, and Wealthfront were the pioneers of this tech-enabled niche within wealth management, but industry titans Vanguard and Schwab have responded in kind and are the current market leaders by AUM.

One early criticism of robo-advisors was that such platforms were more suitable for younger clients with lower levels of accumulated savings, but not for those with more complex life circumstances. With millennials finally coming of age, they will need to create financial plans beyond an app, and it’s evident that they may not be ready for days of extreme volatility.

In the end, human investors are not robots, even if one is in part managing our money. Morgan Stanley CEO James Gorman, whose organization employs over 15,000 financial advisors, agrees. He recently told Bloomberg:

You could have a machine tell a client who’s panicking in a market down cycle, “Do not sell,” and show them a thousand risk-return models mapped out beautifully on the screen. And then that person gets a phone call from a friend saying, “Hey, I just sold my stock. What are you doing?” And they immediately jump on the phone and sell. But when an adviser says, “No, you really shouldn’t sell. You can look at the models, but I’m telling you from experience,” that has value. That’s not going away.

Practice Management

With the technology and asset allocation enhancements that robos have brought to the industry, advisors can now spend more time on client development than administrative tasks.

Advisors have plenty of options to choose from in terms of investment products and related educational content. But quality information on how to grow one’s practice remains at a premium. Expect asset managers to devote more resources to this area in 2018 to deepen their relationships with their advisor clients.

Blockchain will also be further incorporated into an advisor’s daily life, especially when it comes to the Fiduciary Rule and compliance.


* © 2018 RSW Publishing. All rights reserved. Distributed by Financial Media Exchange. Article written by Peter Hans, Harvest Data Trends. RSW Publishing has an agreement to republish this author’s content.  


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