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Top 5 Financial Planning Trends for the Next 5 Years

young professionals financial planning meeting
"At Akkish Inc, we help you achieve your financial dreams"

Financial planning is the process of setting and achieving financial goals, such as saving for retirement, buying a home, or paying off debt. Financial planning can help you optimize your income, expenses, investments, and taxes, and prepare for unexpected events or risks.

But financial planning is not a one-time activity. It requires constant monitoring and adjustment as your life circumstances and the economic environment change. That's why it's important to stay updated on the latest trends and best practices in financial planning, and to seek professional guidance from experts who can help you achieve your financial objectives.

In this article, we will explore the top five financial planning trends for the next five years, and how they can affect your financial situation and decisions. We will also show you how Akkish Inc, a leading financial consulting company, can help you create and implement a personalized financial plan that suits your needs and goals.

Trend #1: Increasing Demand for Sustainable Investing

Sustainable investing is the practice of investing in companies or funds that have positive environmental, social, and governance (ESG) impacts, or that align with your personal values and beliefs. Sustainable investing can help you support causes that matter to you, such as climate change, human rights, diversity, or animal welfare, while also generating competitive returns.

According to a report by Morningstar, sustainable funds attracted a record $51.1 billion of net inflows in 2020, a 300% increase from 2019. The report also found that sustainable funds outperformed their conventional peers in terms of performance and risk-adjusted returns.

The demand for sustainable investing is expected to grow further in the next five years, as more investors become aware of the benefits and opportunities of ESG investing, and as more companies adopt ESG practices and disclose their ESG performance. Moreover, the regulatory environment and consumer preferences are also shifting towards more sustainability and transparency.

If you are interested in sustainable investing, you should consider the following steps:

- Define your sustainability goals and preferences. What are the issues or causes that you care about? What are the ESG criteria that you want to apply to your investments?

- Assess your current portfolio. How sustainable are your current investments? Do they align with your sustainability goals and preferences? Are there any gaps or risks that you need to address?

- Seek professional advice. Sustainable investing can be complex and challenging, as there are many factors and trade-offs to consider. You may need expert guidance from a financial planner who can help you select the best sustainable investment options for your situation and goals.

- Monitor and review your portfolio. Sustainable investing is not a set-and-forget strategy. You need to regularly evaluate your portfolio's performance and impact, and make adjustments as needed.

Trend #2: Rising Popularity of Robo-Advisors

Robo-advisors are online platforms that use algorithms and artificial intelligence to provide automated financial advice and investment management. Robo-advisors can help you create a diversified portfolio based on your risk tolerance, time horizon, and goals, and automatically rebalance it according to market conditions. Robo-advisors can also offer other features such as tax optimization, retirement planning, or goal tracking.

Robo-advisors have become increasingly popular in recent years, especially among younger and tech-savvy investors who value convenience, low fees, and digital experience. According to a report by Statista, the global robo-advisor market size is expected to grow from $1.3 trillion in 2020 to $2.5 trillion in 2023.

However, robo-advisors are not without limitations. Robo-advisors may not be able to account for your unique circumstances, preferences, or emotions. Robo-advisors may also lack human interaction, customization, or flexibility. Moreover, robo-advisors may not be able to handle complex or specialized financial situations or goals.

If you are considering using a robo-advisor, you should weigh the pros and cons carefully:

- Pros: Robo-advisors can offer low-cost, convenient, and accessible financial advice and investment management. Robo-advisors can also help you avoid behavioral biases or emotional mistakes that can affect your investment decisions.

- Cons: Robo-advisors may not be able to provide comprehensive or personalized financial planning or advice. Robo-advisors may also have limited human support or interaction. Moreover, robo-advisors may not be suitable for complex or specialized financial situations or goals.

Trend #3: Growing Importance of Financial Literacy

Financial literacy is the ability to understand and apply financial concepts and skills in everyday life. Financial literacy can help you make informed and effective financial decisions that enhance your well-being and security.

Financial literacy is becoming more important than ever in today's complex and dynamic financial landscape. With more choices and opportunities available than ever before, you need to have the knowledge and confidence to navigate the financial markets and products, and to manage your financial resources and risks.

According to a survey by the Financial Industry Regulatory Authority (FINRA), only 34% of Americans can answer four or more questions correctly on a basic five-question financial literacy quiz. The survey also found that financial literacy varies by age, education, income, and gender, and that financial literacy is positively correlated with financial outcomes such as saving, investing, budgeting, and avoiding debt.

If you want to improve your financial literacy, you should take the following steps:

- Assess your current level of financial literacy. You can take online quizzes or tests to measure your financial knowledge and skills, and identify your strengths and weaknesses.

- Educate yourself on financial topics and concepts. You can use various sources and methods to learn about financial topics and concepts, such as books, podcasts, blogs, videos, courses, or workshops. You can also seek advice from experts or mentors who can help you understand and apply financial concepts and skills.

- Practice your financial skills and habits. You can use tools and apps to help you practice your financial skills and habits, such as budgeting, saving, investing, or debt management. You can also set realistic and specific financial goals, and track your progress and performance.

Trend #4: Increasing Need for Retirement Planning

Retirement planning is the process of preparing for your financial future after you stop working. Retirement planning can help you achieve your desired lifestyle and income in retirement, and cope with the challenges and uncertainties that retirement may bring.

Retirement planning is becoming more essential and urgent in today's aging society. According to a report by the United Nations, the global population aged 65 years or over is expected to increase from 703 million in 2019 to 1.5 billion in 2050. The report also found that the global old-age dependency ratio (the number of people aged 65 years or over per 100 people aged 20 to 64 years) is expected to rise from 14 in 2019 to 25 in 2050.

Moreover, retirement planning is becoming more complex and challenging in today's volatile and uncertain economic environment. With low interest rates, high inflation, rising health care costs, and longer life expectancies, you may need to save more, invest smarter, and plan better for your retirement.

If you want to start or improve your retirement planning, you should consider the following steps:

- Estimate your retirement income and expenses. You need to have a realistic idea of how much income you will need and receive in retirement, and how much expenses you will incur. You can use online calculators or tools to help you estimate your retirement income and expenses based on various factors such as your age, life expectancy, retirement age, savings, investments, pensions, social security benefits, taxes, inflation, health care costs, lifestyle preferences, etc.

- Assess your retirement readiness. You need to evaluate how prepared you are for retirement based on your current financial situation and goals. You can use online assessments or tools to help you measure your retirement readiness based on various indicators such as your savings rate, asset allocation, withdrawal rate, income replacement ratio, etc.

- Seek professional advice. Retirement planning can be complicated and daunting, as there are many variables and uncertainties involved. You may need expert guidance from a financial planner who can help you create and implement a comprehensive and customized retirement plan that suits your needs and goals.

Trend #5: Expanding Role of Financial Technology

Financial technology (FinTech) is the use of technology to provide innovative and efficient financial services and solutions. FinTech can offer various benefits such as convenience, speed, accessibility, affordability, security, transparency, personalization, etc.

FinTech has been transforming the financial industry in recent years by disrupting traditional business models and processes, creating new markets and opportunities, enhancing customer experience and satisfaction, etc.

According to a report by KPMG, the global FinTech market size is expected to grow from $127 billion in 2018 to $309 billion in 2022. The report also identified some of the key FinTech trends for the next five years:

- Digital banking: The rise of digital-only banks that offer online or mobile banking services without physical branches or intermediaries.

- Open banking: The practice of sharing financial data and services among different parties through secure APIs (application programming interfaces), enabling customers to access a wider range of products and providers.

- Blockchain: The technology that enables distributed ledger systems that store and verify transactions without central authority or intermediaries.

- Artificial intelligence: The technology that enables machines or systems to perform tasks that normally require human intelligence or judgment.

- Biometrics: The technology that uses physical or behavioral characteristics such as fingerprints or voice recognition to identify or authenticate users or customers.

- Cloud computing: The technology that enables on-demand access to shared computing resources such as servers or software over the internet.

Why Choose Akkish Inc for Financial Planning?

At Akkish Inc, we believe everyone deserves a financial plan tailored to their unique circumstances and goals. We specialize in demystifying the financial planning process and empowering our clients to take control of their financial future.

Book Your Free Consultation

We invite you to book a free consultation with our financial experts. This is an opportunity to discuss your financial dreams and challenges without any cost or obligation. Plus, when you sign up for a consultation through our website at, we'll thank you with a $5 gift!

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Nov 19, 2023
Rated 5 out of 5 stars.

nice post

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