Opportunities Include Offering Holistic Advice, A Fee-Based Future, All-In-One WealthTech, And Tackling The Organic Growth Imperative
Envestnet, a leading provider of integrated technology, data intelligence, and wealth solutions, has released its 2024 Advisor Perspectives Survey, examining the current state of financial advisory practices and anticipated industry trends. Envestnet leverages its unique vantage point to conduct the annual survey, gathering responses from 290 financial advisors. The survey explores how advisors are planning to grow, scale, and protect their businesses for the future.
Financial advisors interested in learning more about these trends and insights are encouraged to download the report here: go.envestnet.com/Advisor-Perspectives-2024, or to contact Envestnet’s Market Intelligence team to learn how Envestnet can help them capitalize on these opportunities.
“Despite the industry service model expansion we’ve seen to date, advisors surveyed identify holistic advice as the single largest untapped opportunity in wealth management today,” said Rich Aneser, Chief Strategy Officer for Envestnet. “The Envestnet strategy is aligned to this opportunity, driving the growth and productivity of advisors by providing a comprehensive and capable wealth management platform– connecting the technology, data, and a broad set of wealth solutions to serve client workflows and business models.”
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5 key findings from this year’s report include:
#1 Untapped Opportunity? Holistic Advice. Advisors view the expansion of service models (e.g., tax, estate, 401(k) planning) as the most underappreciated opportunity in the industry. And clients agree: McKinsey found that nearly half of all wealth clients prefer to work with an investment professional that can holistically address financial needs across investments, taxes, banking, and life insurance1.
Fee-Based Advice on the Rise. Advisors affiliated with brokerage firms anticipate increasing their fee-based asset mix by 11 percentage points over the next five years. This shift underscores a growing preference for more transparent compensation models.
Preference for All-in-One Technology Stacks. Nearly three times as many advisors favor an all-in-one technology solution over a DIY approach using point solutions. This preference highlights the importance of integrated systems in enhancing operational efficiency and delivering a seamless client experience.
The Organic Growth Imperative. Time and prospecting are cited as the primary obstacles to organic growth. Despite 71% of advisors considering organic growth “very important,” the median advisory firm saw only 2-3% growth in assets excluding market appreciation. This finding suggests a need for advisors to rethink strategies around outsourced business functions, digital lead prospecting and referrals, brand marketing, and automation.
From Talking Point to Focal Point: Next-Gen Investors. Serving younger investors is moving from a talking point to a focal point, with 36% of advisors planning to add tools and advice for this segment within the next two years. Adoption of modern client portals and mobile apps will be necessary to engage these young, digitally native clients.
“The survey results indicate a growing recognition amongst advisors of the importance of attracting and retaining next-gen investors. We believe serving this cohort is paramount and should be viewed through the lens of customer lifetime value,” said Chris Shutler, Head of Strategic Development & Market Intelligence for Envestnet. “Surprisingly, only a fraction of advisors’ open-ended responses mentioned the untapped potential of data and AI. In our view, this reflects both an underappreciated opportunity for leveraging insights as well as the early stage of development for gen-AI use cases.”
The complete 2024 Advisor Perspectives Survey explores additional areas including:
- Investment Alpha: Still a Focus?
- Maximizing Firm Valuation
- HNW Services Opportunities Abound
- Financial Planning Utilization
- Client Portals, A Growing Emphasis … and more.
“Advisors look to an integrated technology stack to help simplify workflows and deliver a seamless client experience,” said William Trout, Director, Securities & Investments at Datos Insights. “At the same time, rising client expectations and the need to capture next-generation wealth means advisors are now providing tax, estate, and other planning support that they would have previously referred to third parties. Extending the value proposition to these areas via digital tools empowers advisors and should help alleviate fee pressure.”
Survey Methodology
The survey, conducted in early 2024 by Envestnet’s Market Intelligence team, included 290 financial advisors. Compared to the overall financial advisor population, respondents had a similar median age, above-average team AUM, and were weighted more heavily (62%) toward fee-only RIAs.
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