A Charles Schwab study of wealth firms looks through the data to big themes it sees as important to the industry now and in the years ahead.

The US wealth advisor sector expects double-digit growth next year, as a recent Charles Schwab survey showed. Another study by the same firm, meanwhile, delves into less easily measurable drivers of success, arguing that “emotional intelligence” (EQ) will be as important in future as more traditional brainpower (IQ).

The latest report, issued by Schwab and based on conversations with those passing through its executive leadership programs, said that advisors are trying to get a closer handle on the “emotional aspects of their clients’ financial lives”. For example, the report found that businesses are boosting talent development efforts in the field of emotional intelligence. For example, they are using organizational coaches and psychologists to train staff on how clients behave, improve how they communicate with clients and handle sometimes tough conversations with spouses and children.

In some ways this theme overlaps with interest in what is termed behavioral finance, the study of how people can reduce chances of making grave mistakes over money and investment decisions if they understand their own biases and cognitive habits. 

Wealth management firms quoted in the Schwab study, Owning The Future Of Intelligent Advice, included Westmount; Wacker Wealth Partners, abacus; SignatureFD; JMG Financial Group; Henssler Financial; Beacon Pointe; Homrich Berg; Private Ocean; Versant Capital Management, and Altfest.

The report also commented on how advisors have shifted from more transactional services to building “deeper relationships”, attempting to make their workforce more diverse to meet client dynamics.

“The path to building wealth and securing retirement is no longer a straight line. Course changes are more common, and clients are turning to advisors during an increasing number of these life decisions. The puzzle is expanding to include saving for education, navigating career shifts, managing divorce, planning for healthcare costs, and creating business exit strategies,” the report said. 

The industry is wrestling with a challenge of recruiting fresh blood at a time when the average age of advisors is more than 50, according to research firm Cerulli Associates, with a significant chunk predicted to retire over the next 10 years.

Even so, the general mood from advisors appears to be cautiously optimistic. As reported last week, Charles Schwab said in its survey of 942 wealth advisors that 31 per cent of advisors expect growth in net new assets to be 16 per cent or more; 18 per cent see it coming in at a range of 11-15 per cent and 27 per cent see the range at 6-10 per cent. The study showed that 18 per cent of respondents see a modest growth rate between 1-5 per cent in net new assets; 6 per cent said they expect no net new assets in the next year.