The financial advisory industry is changing. Before this time, financial advisors were expected to have a physical office, go to networking conferences, and drive countless hours to meet clients or prospective customers. Nonetheless, all these are changing as digital disruption is sweeping through many industries, the financial advisory sector included.
A Paradigm Shift
Since the beginning of the 21st century, the human race has witnessed massive changes in the environment and the way we live our lives. These changes are perpetuated by the exponential advancement of technology, which in turn, impacts human behavior worldwide.
In the last 20 years, consumer behavior, expectations, and preferences have changed drastically. Going by the diverse range of digital solutions available to us, consumers naturally expect financial institutions to take advantage of digital platforms in delivering products, financial advice, investment, and insurance.
A 2019 report by McKinsey and Company clearly showed that more customers prefer virtual advice over the obsolete advising methods deployed in the 90s’.
COVID-19 & Digitalization of Financial Advice
The COVID 19 pandemic, without doubt, disrupted a lot in our world. While we still expect some things to return to normal, other things are here to stay with us as the new normal – for instance, the disruption to the financial advice sector.
Many people were forced to work from home due to the 2020 lockdown. Given the circumstances of the restriction, there were a lot of financial decisions to make amidst the scarcity of resources. While many were able to receive the services of financial advisors, the way and manner it got delivered to them changed.
One takeaway from our 2020 reality is that virtual advice powered by digital platforms can work. With the right infrastructure and tools, both consumers and advisors stand to gain. Virtual advice not only saves clients time but also reduces advisors’ operational expenses. For instance, advisors can spend the funds used in renting and maintaining expensive offices on investment in digital infrastructure to reach more people globally.
The Count Down Has Begun
Digitalization has changed the way we do business in today’s world. Millions of people around the globe are quickly embracing virtual work mediums, and it is crystal clear that the future of financial advisory is virtual. A countdown has begun – financial advisors of tomorrow will need to go digital or risk becoming obsolete.
