Wealth Goal Guidance

2. Wealth Goal Guidance • For the year ending September 2015, combined annual revenues for the financial planning/investment advisory industry had increased 16.7% to a total of $35 billion. • According to the Investment Company Institute (ICI), US-registered investment companies managed a total of $18.2 trillion in assets at the end of 2014. • During 2014, these companies managed 24% of households’ financial assets, which is the largest group of funds investors. Households added $416 billion to their funds holdings during 2014.

3. New Opportunities for a New Year • With increases in employment and wages, a significantly better housing market and retail sales increasing 4% or more, the 2016 economic picture should generate more income to invest and more revenues for financial planners. • Although some financial pundits and economists in academia think the stock market will suffer during 2016, major Wall Street companies are forecasting a 7% to 11% increase in the S&P 500. • Another good sign was an 8.6% increase in the number of US HNWIs (High Net Wealth Individuals, at least $1 million in investable assets) during 2014, or 4.4 million total, and a 9.4% increase in investable wealth, both records.

4. Counselors’ Count • During 2014, there were approximately 16,000 to 17,000 financial planning/investment advisory firms, with 9,260 mutual funds firms; 568 close-end funds; 1,451, exchange traded funds; and 5,381, unit investment trusts. • According to a 2015 Cerulli Associates study, the total number of US financial advisors increased 1.1 percent during 2014 to 308,937. This is the first yearly increase since 2004, having decreased 12.7 percent from 2005 through 2013. • According to Wealth Management’s 2015 Broker Report Card, men older than 35 continue to dominate the industry, as just 21 percent of brokers were women and 11 percent were younger than 35.

5. Understanding New Markets • As the majority of the American population shifts to younger than 40, 75% of young adult HNWIs think wealth managers understand their needs, compared to 80% of HNWIs older than 40. • Far fewer young adult HNWIs are working with a single firm than adults 40+, or 31% and 60%, respectively, and 49% of these young adults are working with 5 or more firms, compared to just 9% for adults 40+. • The wealth-management profile of female HNWIs is different than men. For example, women are 12% more concerned about personal finance crime and are 8% more likely to consider brand reputation when choosing an advisor.

6. Wealth Managers’ Marketing Maneuvers • The target market for Wire/Regional (W/R) firms, Independent Broker Dealers (IBDs) and Registered Investment Advisors (RIAs) are NHWIs, followed closely by “mass affluents” with incomes of $500K–$1MM and $100K–$500K. • Client appreciation events is the #1 marketing method all three groups of advisors use: W/R, 59%; IBD, 53%; and RIA, 43%. Seminars are second, followed by social media, email campaigns and digital newsletters. • LinkedIn is their primary social media platform and by more than twice that of Facebook: W/R, 91% and 27%; IBD, 94% and 37%; and RIA, 90% and 44%, respectively.

7.  The Future Is Automated Advisory Services • Although automated advisors only managed $8.2 billion of the total US HNWI assets of $15.2 trillion during September 2015, automated advisors are forecast to managed $1.5 trillion in assets by 2017. • Once again, it is the young adult HNWIs who are driving the demand for automated advisory services, as 87.1% are estimated to prefer a digital wealth management relationship by 2020. • Of all investors 30 years of age and younger, 76.9% were willing to transfer more than 50% of their assets to automated advisory services during Q1 2015, compared to 19.4% of investors 60 years of age and older.

8. Advertising Strategies • Financial planning/investment services firms that want to attract more female clients should use television. Women consider brand reputation as a very important attribute when choosing a firm and a primary strength of TV advertising is building a brand name. • Television is the place for these firms to reach a wider audience to announce their client appreciation events and seminars, with testimonials from previous participants and calls-to-action to visit social media pages for detailed information. • Since having enough money to retire comfortably is American’s #1 financial fear, firms can use television to explain simple and easy-to-understand formulas to alleviate this fear for the average American.

9. Social Media Strategies • Firms that conduct seminars should record these events on video to create a library of materials to attract interest. Articles and/or blog posts can be written about these event topics from a different angle and including live links to the matching video. • A weekly podcast is the perfect social media tactic for any firm, especially if they want to attract younger adults and women. Interviews and discussions with industry experts and leaders can address recent news events that impact the market and other relevant topics. • Since participation in charitable events is an effective marketing tool for financial planning firms, they should develop an annual plan for such participation and aggressively promote the events on their social media pages as a public service.