Growing demand, innovation, policy support, Growing penetration of Startups (FinTech), Investment, and Volatility in the market are factors that are expected to shape the financial advising landscape in 2022. New trends would determine the growth of the industry and its prominence in the following normal situation arising due to the ongoing COVID-19 Crisis.
Startups and Investors need to closely watch out for six dominant trends in 2022 to do robust financial planning for themselves:
Small Business Funding
Learning from the Crisis In the new normal, people have realized that life will not be the same again. Hence, from professionals to small businesses/startups, they need safer and more gainful financial planning. A casual or easy approach towards wealth management has become a thing of the past. Venture capital firms or startup investors are expected to redesign their strategies. They would be leveraging the growing demand for robust financial planning by startups. As technology has shown its metal during the pandemic, innovations would be vital in grabbing the opportunities. Financial advisers can assist clients in identifying and applying lessons acquired during the pandemic to their financial planning.
Relocation of Funds by Startup Investors
Startup investors are expected to reallocate funds to investments that can do well during pandemic times. Technology, e-Commerce, Financial Services (FinTech), Healthcare (Health-Tech), and Consumer products would continue to dominate in 2022 in terms of attracting seed funding. The volatility in the market is likely to increase the popularity of momentum and trending strategies throughout 2022. Investors are expected to use economic and market data to determine if the future trend is a good or bad time in the market. Angel investors would always use data to determine where the momentum is in the market sectors at any given time. It makes sense for angel investors to reallocate funds to high-growth sectors.
Communication: Hybrid to Dominate
Many financial advisers were forced to adopt a virtual meeting style with clients due to the pandemic, but advisors will not be too hasty to forsake the practice. In 2022 Financial professionals would employ a hybrid strategy that blends in-person client contacts with continuous virtual involvement after things settle in 2022. Virtual meetings allow advisers and clients to make better use of their time while also communicating more frequently. Advisors can also engage with stakeholders more efficiently using virtual meetings. In 2022, the most effective tool for the financial advising community is predicted to be a hybrid communication strategy.
Investors and Risk Management
The financial advising sector has had a paradigm change in the last few years, driven by changing demographics, more and more startups joining the industry, and rapid digitalization. Big data and advanced analytics are transforming the financial advising sector with new ways to engage with new clients, manage client relationships and manage risks. Investors for startups of today have access to vast information, knowledge, and tools for strategic investment planning.
Growing Demand for Seed Funding
In 2022, innovation-driven startups are expected to ask for more funds from angel investors and venture capitalist funds. Higher demand would come from several high-growth sectors. Startup investors would continue investing in sectors such as FinTech, EduTech, AgriTech, FMCG, E-commerce, logistics and supply chain management.
D2C to Dominate
Direct-to-customers (D2C) and Deep Tech are expected to dominate in 2022. Investors would be eying these two segments with deep interest. Many startups in Financial, Agriculture, FMCG and other sectors would emerge from small towns offering tremendous opportunities to startups and investors.
Startups are expected to fill up several gaps in service delivery created by the pandemic. In countries like India and Canada, a new startup ecosystem has arisen. Investors see a tremendous upside in supporting small enterprises in their early stages of development. All stakeholders can expect a win-win outcome in 2022.
JC Team Capital 