Financial advising may be a lucrative career now, but advisors better adapt to emerging trends in demographics and technology if they are to remain relevant far into the future.
Insular Life executive chairman Ms. Nina D. Aguas outlined some of the impending threats to the financial advising industry when she gave an address to the Wealth Management Center for Communications and Research (WMCCR) graduation and homecoming event at the Shangri-La BGC, in Taguig, recently.
The WMCCR is the country’s leading center for skills development of wealth professionals such as life insurance financial advisors (FAs)whose graduates are some of the country’s top premium producers.
She said competent financial advisors continue to be critical in the industry especially for high net worth clients, who prefer to talk to humans when dealing with life insurance or investment options. However, there are trends now that could severely affect this dynamics.
“The rise of millennial investors is changing the dynamics of consumer-portfolio. With information easily accessible, the millennial investor’s attitude and expectations to wealth management are very different. Millennials may opt to buy on-line given they are more tech savvy,” said Ms. Aguas.
Aguas challenged WMCCR’s alumni and new graduates to shift their ways and competencies from merely giving information, to that of an adviser who offers deep insights and value-based investments to these new breed of clients.
“Millennials demand active involvement, and prefer companies or funds that target specific or environmental outcomes,” said Ms. Aguas, citing a recent study on the subject.
Further, Ms. Aguas observed that there is an ongoing rise in science and human-based advisory models called “Robo” advisors in the insurance industry.
“The robo-advisors’ main selling point and advantage over traditional financial advisors, is their comparatively lower fees. By providing most of the interaction online, the use of robo-advisors can save time and costs for the company. Robo advisors reduce personnel and asset costs while a higher number of customers can be served. At the same time, the low complexity of products sold online makes them easier to explain to a wide range of customers,” she said.
Aguas urged other life insurance organizations present at the event to recognize these changing trends and to adopt measures to ensure that the industry, and its financial advisors, remain relevant.
“At Insular Life, we understand the changes involved and have identified proper strategic response that will set our organization in control and at par in the industry. This program is based on US and Singapore models that can best support our agency force to critically adapt to new competencies required to become successful,” she said.