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Practice Management

5 trends financial professionals can't ignore

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In a fast-changing market, it's time for financial professionals to reassess financial trends and see how they can best serve their clients as conditions evolve. Here are five trends to be aware of this year, plus what they mean for your practice.

1. The coming recession?

One of the biggest trends facing financial professionals and clients in 2023 is the coming recession. The World Bank has predicted a slowdown from 5.5% growth in 2021 to 3.2% next year as economic demand falls. Chief financial officers surveyed by CNBC all predicted a recession in the first half of next year.

Financial representatives must prepare to nurse clients through a bear market that is likely to get worse after a bull run lasting a decade. Now is your opportunity to help investors avoid emotional investment decisions and create financial resolutions to get them through difficult times.

2. Managing retirement

This recession, along with high inflation, is also likely to affect older Americans reaching retirement age. A mid-pandemic bump in retirement was always likely to be temporary, and recent studies estimate a retirement savings gap approaching $4 trillion. As Americans consider their options, financial professionals must help clients create realistic retirement plans.

3. Student loan relief

In August 2022, the White House announced that it would cancel up to $10,000 in student debt for borrowers with annual incomes under $125,000. Students with Pell Grants get another $10,000 relief. This, along with a new income-driven approach to repayments, could unlock substantial capital among working-age Americans. You should be ready to help clients consider the best way to save this money or put it to good use in other ways that fit their financial goals.

4. More tech-savvy investors

The United States faces a period of unprecedented generational wealth transfer totaling $72.7 trillion directly to heirs by 2045. Those heirs expect different things from their financial representatives. Expect a more tech-savvy investment clientele that wants flexible communication options and the ability to check and handle investments online.

5. Women-owned wealth

Asset distribution is becoming more equitable, with women accounting for more wealth holders. In 2020, women controlled just a third of U.S. household financial assets (roughly $10 trillion). By 2030, women will control much of the $30 trillion in boomers' financial assets after their partners pass away. Financial representatives can prepare for this by taking a holistic view that encompasses all household members, helping clients plan for major life events and taking the needs of female clients into consideration.

These changes call for financial professionals to be more flexible, more technologically astute and more inclusive. With many of these trends expected to occur over multiple years, there's everything to play for. Start the skills acquisition you need now to ensure that your practice stays relevant to a changing client base with rapidly evolving needs.



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