Our Top 10 Questions Designed To Help Advisors Navigate The Decade Ahead

The past decade has been one for the record books. There has been unprecedented change in almost every aspect of life, including technology, transportation, politics, etc. For me personally, I used to view going to the movies and dining at a local restaurant from time to time as a highlight, but now, streaming any movie I wish at any time on demand and ordering dinner via Uber Eats (UBER) is equally as attractive. The decade ahead (I refer to it optimistically as the soaring ’20s, given the advancements technology alone is expected to help us achieve) is anticipated to be equally unparalleled.

However, the potential impact many of these changes could have on financial advisors may not be as rosy. Over the last 15 years in the industry, I’ve conducted several thousand meetings with advisors. That experience has given me the ability to discern whether the advisor is prepared to handle their clients’ needs – and whether they can do it while adapting to the constantly evolving world.

To help advisors understand just how much and how fast the world is changing, I’ve created the following list.

Top 10 questions every financial advisor should consider in preparation for the decade ahead

Do you think that the following factors will increase or decrease?

  1. Compliance requirements/regulatory pressures
    Increase / Decrease
  2. Advisory fees (on average)
    Increase / Decrease
  3. Challenges to accurately asset allocate
    Increase / Decrease
  4. The number of available investment solutions
    Increase / Decrease
  5. Client expectations, and the complexity of their needs
    Increase / Decrease
  6. The number of competitors to advisory business
    Increase / Decrease

    From a market and economics perspective:

  7. Growth stocks finished 2019 with their best year since the Global Financial Crisis ended in 2009 (according to the Russell 1000 Growth Index versus the Russell 1000 Value Index).
    • Do you expect this trend to continue?
      Yes / No
  8. The U.S. is experiencing the longest bull market in history (based on the S&P 500, this is the longest ever we’ve gone without a recession).
    • Do you expect this trend to continue?
      Yes / No
  9. The Fed raised interest rates nine times leading up to January 2019 (until quickly deciding to begin reducing rates, with three cuts in place by the end of 2019).1
    • Do you expect this trend to continue?
      Yes / No
  10. The U.S. experienced a 2.1% increase in gross domestic product (GDP) in the fourth quarter of 2019, according to the Bureau of Economic Analysis.2
    • Do you expect this trend to continue?
      Yes / No

3 strategies for business planning and client reviews

If you’re like the countless number of advisors I’ve shared this with, I’m assuming most of your answers are biased toward an increase in change. If that’s the case, I encourage you to consider three strategies to help you conduct your business planning and client reviews over the coming weeks:

  1. Be willing to have courageous, forward-looking, expectation-setting conversations with your clients about asset allocation and how investment returns may not come from the same sources in the future that we’ve seen over the last decade. By way of example, the image below shows that asset class returns in the 10 years ending in December 2019 were almost a complete reversal from asset class returns achieved in the prior decade ending in December 2009.

    *Annualized return. Non-U.S. Equity – MSCI EAFE Index; Global Equity – MSCI World Index; Emerging Markets – MSCI Emerging Markets Index; Global Real Estate – FTSE NAREIT All Equity Index (1/1/1995-2/18/2005) & FTSE EPRA/ Developed Index (2/18/2005-12/31/2019); Cash – Bloomberg Barclays US Treasury Bill 1-3 Month Index; Global High Yield – Bloomberg Barclays Global High Yield Index (1/1/1990-12/31/1997) & BofAML Global High Yield TR Hdg Index(12/31/1997-12/31/2019); Infrastructure – S&P Global Infrastructure Index; U.S. Bonds – Bloomberg Barclays U.S. Aggregate Bond Index; U.S. Equity Large Cap – Russell 1000® Index. Balanced: 30% Russell 3000® Index; 35% Bloomberg Barclays U.S. Aggregate Bond Index; 20% MSCI EAFE Index; 5% MSCI Emerging Markets Index; 5% FTSE EPRA/NAREIT Developed Index; 5% Bloomberg Commodity Index. Please note that this chart is based on past index performance and is not indicative of future results. Indexes are unmanaged and cannot be invested in directly. Index performance does not include fees and expenses an investor would normally incur when investing in a mutual fund. Diversification and strategic asset allocation do not assure profit or protect against loss in declining markets.

  2. Ask your investment partners – like us – how they can help you solve to each of the specific questions posed above. Press them on the answers.
  3. Consider the opportunity and competition ahead of you as you adapt to the new landscape in the next decade:
  • 312,300 financial advisors are estimated by 2026, as the number of advisors is expected to grow.3
  • 37% of financial advisors are expected to retire over the next decade.4
  • $17.7 trillion invested in open-ended mutual funds,5 while at the same time, many assets are in transition. Dalbar reports that the average mutual fund equity investor holds a fund for an average of 3.3 years.6

Delivering the outcomes your clients are seeking

Change is hard. But change can also be the basis for a tremendous range of positive results, including the potential for growth, new opportunities, efficiency and value – not to mention potentially even better outcomes in client relationships for those open to looking at the world differently. We believe the best advisors focus on helping their clients stick to their long-term financial plans – their outcomes. And we believe this focus on outcomes is where advisors deliver the most value.

Reaching your full potential as an advisor

With 2020 still in its early days, have you taken the time to set outcomes for yourself? We believe an outcome-oriented approach is not just for investing. We recommend the same approach for yourself and your practice. If even the most highly trained athlete in the world seeks coaching on a regular basis to adapt to new training methods and refine the very thing they love doing, perhaps advisors should consider doing the same.


1Federal Open Market Committee

2 Bureau of Economic Analysis, U.S. Department of Commerce, Gross Domestic Product, Fourth Quarter and Year 2019 data released 1/30/2020

3 Source: Forbes, “Here’s How Much Financial Advisors Earn In Every U.S. State

4 Cerulli Report – U.S. Broker/Dealer Marketplace November 2019: “Advisor Retirements Expected to Set More Than One-Third of Industry Assets in Motion

5 2019 ICI Fact Book.

6 DALBAR Quantitative Analysis of Investor Behavior: The Most Common Mistake Investors Make


Bloomberg Barclays U.S. Aggregate Bond Index: An index, with income reinvested, generally representative of intermediate-term government bonds, investment grade corporate debt securities, and mortgage-backed securities. (specifically: Barclays Government/Corporate Bond Index, the Asset-Backed Securities Index, and the Mortgage-Backed Securities Index).

Bloomberg Barclays Global High-Yield Index: An index which provides a broad-based measure of the global high-yield fixed income markets. The Global High-Yield Index represents that union of the U.S. High-Yield, Pan-European High-Yield, U.S. Emerging Markets High-Yield, CMBS High-Yield, and Pan-European Emerging Markets High-Yield Indices.

Bloomberg Barclays Intermediate Treasury Index: Measures the performance of U.S. Dollar denominated U.S. Treasuries, government-related and investment grade U.S. corporate securities that have a remaining maturity of greater than one year and less than ten years.

Bloomberg Barclays Short Treasury Index: Is composed of all treasuries that have a remaining maturity between one and twelve months.

Bloomberg Commodity Index Family: Represents the major commodity sectors within the broad index: Energy (including petroleum and natural gas), Petroleum (including crude oil, heating oil and unleaded gasoline), Precious Metals, Industrial Metals, Grains, Livestock, Softs, Agriculture and ExEnergy. Also available are individual commodity sub-indexes on the 19 components currently included in the DJ-UBSCI℠, plus brent crude, cocoa, feeder cattle, gas oil, lead, orange juice, platinum, soybean meal and tin.

Bloomberg Commodity Index Total Return: Composed of futures contracts on physical commodities. Unlike equities, which typically entitle the holder to a continuing stake in a corporation, commodity futures contracts normally specify a certain date for the delivery of the underlying physical commodity. In order to avoid the delivery process and maintain a long futures position, nearby contracts must be sold and contracts that have not yet reached the delivery period must be purchased. This process is known as “rolling” a futures position.

BofA Merrill Lynch Global High Yield Index: Tracks the performance of USD, CAD, GBP and EUR denominated below investment grade corporate debt publicly issued in the major domestic or Eurobond markets.

FTSE NAREIT: An Index designed to present investors with a comprehensive family of REIT performance indexes that span the commercial real estate space across the U.S. economy, offering exposure to all investment and property sectors. In addition, the more narrowly focused property sector and sub-sector indexes provide the facility to concentrate commercial real estate exposure in more selected markets.

FTSE NAREIT all Equity Index: Measures the performance of the commercial real estate space across the U.S. economy offering exposure to all investment and property sectors.

FTSE EPRA/NAREIT Developed Index: A global market capitalization weighted index composed of listed real estate securities in the North American, European and Asian real estate markets.

MSCI EAFE (Europe, Australasia, Far East) Index: A free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. and Canada.

MSCI World Index: A broad global equity index that represents large and mid-cap equity performance across 23 developed markets countries.

MSCI Emerging Markets Index: A float-adjusted market capitalization index that consists of indices in 24 emerging economies.

Russell 1000® Index: Measures the performance of the large-cap segment of the U.S. equity universe. It is a subset of the Russell 3000® Index and includes approximately 1000 of the largest securities based on a combination of their market cap and current index membership. The Russell 1000 represents approximately 92% of the U.S. market.

Russell 1000 Value Index: Measures the performance of the broad value segment of U.S. equity value universe. It includes those Russell 1000 companies with lower price-to-book ratios and lower forecasted growth values.

Russell 1000® Growth Index: Measures the performance of the broad growth segment of the U.S. equity universe. It includes those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values.

Russell 3000® Index: Index measures the performance of the largest 3000 U.S. companies representing approximately 98% of the investable U.S. equity market.

The S&P 500® Index: A free-float capitalization-weighted index published since 1957 of the prices of 500 large-cap common stocks actively traded in the United States. The stocks included in the S&P 500® are those of large publicly held companies that trade on either of the two largest American stock market exchanges: the New York Stock Exchange and the NASDAQ.

The S&P Global Infrastructure Index: Provides liquid and tradable exposure to 75 companies from around the world that represent the listed infrastructure universe. To create diversified exposure across the global listed infrastructure market, the index has balanced weights across three distinct infrastructure clusters: Utilities, Transportation, and Energy.

Indices and benchmarks are unmanaged and cannot be invested in directly. Returns represent past performance, are not a guarantee of future performance, and are not indicative of any specific investment. Index return information is provided by vendors and although deemed reliable, is not guaranteed by Russell Investments or its affiliates. Due to timing of information, indices may be adjusted after the publication of this report.

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Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors.

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