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To grow an advisory practice, identifying advisory megatrends lets you understand where practices, the industry and your clients are headed.

Surfing these waves will position your firm for growth.

Ignoring them will put both firm’s growth and foundation in peril.

Here are five advisory megatrends you must pay attention to build a thriving, sustainable firm and keep pace with the industry currents.

1. Movement from investment management- to planning-led practices

Practices have largely kept existing clients happy by beefing up on credentials like the CFP® and adding basic planning services and wealth dashboards. At the same time, they have tried to maintain margins in AUM-based fees.

The transition from investing to planning has challenged advisors, diverted focus and lowered profits.

Existing clients – those with minimal planning needs – may even reject paying ongoing fees for planning services not used.

New entrants such as the planning-centric advisors found in the XYPN network are calling on financial planning as a reason to engage an advisor. These millennial planners, however, struggle with a different problem:

How can we offer ongoing value and create $2,000 to $5,000 of annual fees per client when a one-time $2,500 financial plan might organize the average younger client for the foreseeable future?

And there are only so many unattached $2+ million households who may have ongoing and complex financial planning needs.