The Financial Advisor Practice of the Future

Robert A. Dougan, M.A.
11 hours ago
7 min read

When information is no longer the differentiator

Market volatility, greater cost transparency and artificial intelligence are reshaping financial advice. The practices best positioned for the future will combine technology with something much harder to automate: trust, judgment, relationships and a deep understanding of people.

Three forces are converging

The financial advice business is changing, not because of one technology, one regulatory change or one market cycle, but because several forces are converging at the same time. For Canadian financial advisors and the organizations that support them, three deserve particular attention: market volatility, greater transparency around costs and artificial intelligence.

Together, they raise a larger question: What will clients truly value from their financial advisor in the future? Increasingly, the answer will extend well beyond investment information or portfolio construction. It will be about trust, relationships, judgment, communication and the ability to guide human behaviour.

Markets will eventually test the relationship

Nobody knows when the next significant market correction will occur. What we do know is that corrections and periods of volatility are normal features of investing, and those are often the moments when an advisor’s value becomes most apparent.

When markets are rising, staying invested can seem relatively easy. When portfolios decline and uncertainty increases, clients may question decisions, reconsider their risk tolerance or want to abandon a long-term strategy at exactly the wrong time. At those moments, the advisor is not simply managing investments. The advisor is managing behaviour.

The ability to understand the client, communicate effectively, establish confidence and prevent emotion from driving poor financial decisions becomes critically important. That is where the human relationship between advisor and client can become exceptionally valuable.

Total Cost Reporting will make value more visible

A second major change is unfolding in Canada. Enhanced Total Cost Reporting requirements took effect on January 1, 2026. Investors will begin receiving the first enhanced annual reports for the 2026 calendar year in 2027. These reports will add investment-fund expenses and other costs to information investors already receive, showing costs in both dollars and percentages.^[1]

These are not new costs; they are existing costs becoming more transparent. That is positive for investors, but it creates an important question for every advisor: When clients can see more clearly what they are paying, can they see just as clearly what they are receiving in return?

Portfolio construction, financial planning and investment performance matter. So do the elements that are harder to place on a statement: confidence, guidance, accessibility, understanding, behavioural coaching and, ultimately, trust.

Vanguard’s research tells us something important about trust

This is not simply an intuitive argument. Vanguard’s 2025 study surveyed 12,443 investors, including 7,746 advised clients. It found that 86% of advised clients reported greater peace of mind compared with managing their finances on their own; among clients working with a human advisor, the figure rose to 88%.^[2]

Vanguard also found that advised investors were roughly half as likely to report high financial stress as self-directed investors—14% compared with 27%. In addition, 76% of advised clients said advice saved them time, with a median saving of about two hours per week, or more than 100 hours per year.^[2]

Earlier Vanguard research estimated that emotional attributes account for approximately 40% of an investor’s perceived value of financial advice. Those attributes include trust, personal connection and confidence that the advisor will put the client’s needs first.^[3]

That finding matters. A substantial share of the perceived value of advice is not attributed solely to functional elements such as portfolio management or financial planning. It is emotional—and that becomes especially important when we consider the next major force affecting financial advice.

AI is rapidly changing the value of information

Artificial intelligence is making sophisticated information increasingly accessible. Clients can already use AI to ask questions about investments, retirement, asset allocation, financial concepts and portfolio construction. Information that once required considerable expertise to find, interpret and explain can increasingly be accessed in seconds.

The industry expects significant change. Accenture’s North American wealth-management research reported that 96% of surveyed financial advisors believed generative AI could revolutionize client servicing and investment management, while 97% expected its most significant impact within three years.^[4]

At the same time, EY’s 2025 global wealth research found that investors increasingly expect wealth providers to incorporate AI, yet trust in AI remains well below trust in human advisors. This suggests that clients may want both advanced technology and meaningful human connection.^[5]

Canadian regulators also emphasize that AI in financial services creates both opportunity and risk, including concerns involving privacy, misinformation, security and consumer outcomes. Financial institutions remain accountable for responsible use.^[6]

AI does not mean clients should replace professional financial advice. It does mean that access to information itself becomes a weaker source of differentiation. The enduring opportunity is to become exceptional at providing the things technology has much greater difficulty replicating.

Information can be commoditized. Trust is harder to replicate.

Knowing the client. Understanding when they are anxious. Recognizing when fear may cause a poor decision. Having enough credibility that they will listen during a difficult market. Understanding family dynamics. Communicating complex decisions in a way that resonates with a particular individual. Holding someone accountable to a long-term plan. Providing judgment when there is no single perfect answer.

Those are fundamentally human capabilities, and the research suggests clients place substantial value on them. This creates an important paradox: the more capable technology becomes, the more important the human side of advice may become. AI may not make the advisor irrelevant; it may raise the standard for what constitutes a valuable advisor.

What if behavioural science were applied to the entire practice?

If trust, relationships, communication, judgment and behavioural coaching become increasingly important, advisors and the organizations supporting them should ask: Are we systematically developing these capabilities? And is the practice itself capable of delivering this kind of value?

Assessments such as the POP™ assessment have traditionally been associated heavily with selection: Can this person succeed as an advisor? That remains important, but it is not the only question behavioural science can help answer.

For a successful advisor building a growing practice, understanding the advisor’s behavioural characteristics is only the beginning. Behavioural science can also inform questions such as:

What are the advisor’s natural strengths, and where could their tendencies constrain growth?
What responsibilities should the advisor continue to own, and what should be delegated?
Who should the practice bring onto the team next, and which characteristics would complement the advisor?

How will the personalities already on the team work together, and where could friction emerge?
How should responsibilities and communication be structured?
How should the advisor coach and develop each team member based on who they are?

At that point, the conversation is no longer about an assessment report. It is about building a stronger practice.

From advisor assessment to Advisor Practice Blueprint

The next evolution is to use behavioural assessment as the foundation for an Advisor Practice Blueprint. The advisor’s profile provides one layer of intelligence. The profiles of the people around them provide another. Practice structure, goals and growth needs provide additional context.

Technology can then translate that science into practical recommendations for advisor development, practice structure, hiring priorities, complementary characteristics, team composition, team dynamics, communication, leadership, coaching and growth.

The objective is not to suggest that there is one perfect personality or one perfect way to build an advisory practice. There is not. The objective is to help advisors make more informed decisions about themselves, their people and the practices they are building.

AI can make behavioural science more actionable

Ironically, the same technology disrupting financial advice can help advisors build stronger practices. There is an enormous difference between asking a generic AI system, “How should I grow my advisory practice?” and using technology grounded in validated behavioural information to ask, “Given who I am, who is around me and where I am trying to take this practice, how should I build, lead and develop my team?”

In this application, AI is not a replacement for behavioural science. It is an application layer that can make the science easier to understand and act upon—through more relevant coaching conversations, development plans, selection considerations, team insights and practical actions.

This could help an advisor identify who to bring onto the team next; help a manager prepare for a difficult conversation using behaviourally informed coaching guidance; explain why two capable people repeatedly experience friction; or reveal that the advisor has become the constraint preventing the practice from scaling.

The advisor practice of the future may need to become more human

Market volatility will continue. Cost transparency is increasing. AI capabilities will keep advancing. None of those trends mean the financial advisor disappears, but they may change what separates an average advisor from an exceptional one.

The strongest practices of the future may combine extraordinary technology with extraordinary human capability: advisors who establish trust when clients are uncertain, teams built around complementary people, leaders who understand how to coach different personalities and organizations that deliberately develop those capabilities rather than hoping they emerge.

Technology will continue making information easier to access. Trust will not become easier to manufacture.

If trust, peace of mind and the emotional side of advice already represent a substantial part of the value clients perceive, perhaps the greatest opportunity is not simply giving advisors more technology. It is using technology and behavioural science to help them build better practices around people.