88). Looking at the future, the five years counting to 2018 is very promising for the industry. Revenue is also expected to rise in 2014, as capital markets begin to pick up. Researchers forecast that the industry will grow in the next five years, increasing total AUM and increase revenue generated from cover fees, which are mainly consisted of annual fees charged on assets under management. In the meantime, the recessions bad effects on consumer confidence will force more individuals to seek financial advice, as a result there will be an increased industry revenue over the five years to year 2018. 7.0 Industry Trends There are emerging trends that are reshaping the financial advisory industry and which definitely impact the usual way of carrying out business.
The following are the trends redefining this industry; 7.1 Technology As consumerization of technology expands, more investors have several tools at their disposal to analyze and deal with their own personal finances. This forces financial planners to ensure they are not pressed to “falling behind the curve” of these high-tech advances in technology. In recent times, consumers are more empowered to dig information on their own about financial planning and investment decisions.
The proliferation of various readily-available online information that give information regarding financial instruments, reviews of financial and advisory firms and market trends. Total account summaries are also available online and in mobile apps that provide an analysis of a client’s financial situation and overview of the market information. Financial advisors and planners must therefore remain technologically relevant and up-to-date to meet client expectations. 7.2 Commoditization As technology marks its position the field of financial advice by offering online tools and smartphone apps for barely everything starting from budgeting to investing, commoditization of the financial advisory industry rings an alarm.
Many angles of the financial advisory industry services have already been commoditized. Even stock trades that used to cost about a hundred dollars, are now sold at a slice of that cost, or even for free. Meanwhile, Index investing is quickly becoming more popular, plus free software can now carry out complex financial planning projections. To evade similar pressure in pricing, financial planners must be steps ahead to find ways to add value to their services. 7.3 Changing Business Model The business model of financial advisory is also changing rapidly.
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