Within the past few years, there has been a considerable shift in the general public’s attitudes toward work and employment. In 2021 alone, 40 million Americans voluntarily left their jobs, which left countless employers in need of staff. This mass exodus — often referred to in media outlets as the “Great Resignation” — has had a considerable impact on the wealth management industry.
Investment and wealth management advisors are now dealing with a record number of clients seeking financial guidance when leaving their jobs. At the same time, some wealth management firms are experiencing employee shortages of their own, with individual advisors exploring other career options.
While the jury remains out on how long these trends will ultimately last, staying aware of how the Great Resignation is affecting the wealth management industry can help firms stay vigilant and proactive in meeting client and advisor expectations. Here are three patterns to watch.
Employment Stability is Not a Given
A large part of financial planning depends on a client’s existing job situation and potential career trajectory. Although job shifts are inevitable, the large number of people making the sudden decision to leave their current positions has caused an unprecedented shift in advisor strategy.
In a typical financial planning session, wealth management experts create a financial plan for clients based on their current salary and career path. However, when a client decides to quit their job, all of that goes out the window. This essentially forces both client and advisor to go back to square one with a reevaluation of investment opportunities and realistic savings goals.
The impact of clients’ resignations on their long-term financial plans ultimately depends on their future income. Do they have a new job lined up? Do they plan on staying unemployed for an extended period? The answer to both questions is not necessarily a given, and advisors should pay special attention to asking new and existing clients their plans. Having frequent, honest discussions with clients about their employment status should now be a critical component of an advisor’s role.
Being Cutthroat Won’t Cut It
In addition to the high volume of clients leaving jobs in pursuit of better opportunities, financial advisors themselves are also moving on in historic numbers. This has made it increasingly difficult for financial advisory firms to recruit top industry talent and retain it.
For every available advisor, there may be 20 other firms competing for their attention. Earning new clients and keeping the trust of existing ones is increasingly difficult in such an unstable environment.
Firms should market themselves as places where advisors can thrive. Having a team mentality where referrals can be shared and competitive, cutthroat behaviors are mitigated can help attract individuals who want to pool their resources for more clients. Team model approaches benefit from new technologies that allow advisors to share insights and work collaboratively. Greater transparency means more dedicated employees, and this partnership mentality can lead to greater workplace satisfaction rates and better earnings for everyone.
Leaning Further into Digital Transformation
In a constantly changing environment, wealth management firms need to have tools that stay on top of client financial situations and shifting economic patterns. Relying on a cloud-based platform allows advisors to have complex client information at their fingertips, as well as a wealth of consumer behavior insights. Since customers might be actively looking for new jobs and leaving old ones, it’s important to provide efficient and accessible communication channels with advisors. Scrapping in-person meetings for remote ones can help strengthen client-advisor bonds and speed up the time it takes planners to offer valuable advice.
Similarly, digital cloud platforms also make document collection and storage a more seamless and consistent process. Client information can be shared within multiple systems while remaining secure, an important component to building trust with customers wary of data breaches and hackers. Solutions like Docupace offer document storage with fast-paced, intelligent automation that can save advisors time and improve the client experience.
Overall, wealth management firms need to make customers feel understood and secure when life-changing career decisions are being made more frequently. Similarly, advisors need the assurance of a workplace that offers the right tools and support for earning new business and strengthening existing relationships. The Great Resignation may seem like a frightening unknown, but with the right strategies, firms can implement plans that help businesses thrive.
After all, another component of this historical event is how it empowers workers to take control of their careers and financial lives. When it comes down to it, isn’t that really what wealth management is all about?
For more information on how to adapt to trends impacting the wealth management industry, contact Docupace for a free consultation today.
