Fears of continued market volatility are increasing client demand for financial planning services, according to a recent report by Cerulli Associates. Meanwhile, some firms are staffing up and boosting marketing to meet the expected demand.

Although 75% of financial advisors' clients currently receive some form of financial planning, Cerulli expects the percentage to increase to 82% in 2023. Of the clients who aren't receiving planning services, 18% consider those services important, Cerulli also found.

Cerulli's director of advice relationships, Scott Smith, says the current mix of inflation and volatility most affects two client subsets: those at the lower end of the wealth spectrum and those nearing retirement.

"Among less wealthy investors, inflation can quickly create the need for trade-offs between current expenses and saving for retirement," Smith says. "For those approaching retirement, high inflation can lead to them questioning their planned retirement timeline altogether. However, they may not understand how their retirement preparedness overall has changed," Smith adds.

For the less wealthy, Smith says providers, such as those in the 401(k) market, can explain the long-term effects of reducing savings and can help address immediate financial goals while protecting the future plan. As for clients nearing retirement, providers "with robust retirement income modeling tools can keep these investors from panicking and hopefully find solutions that minimize changes to the clients' preferred timelines," Smith adds.

Kurt Ringenbach, a founding partner of Stratos Wealth Partners, agrees that the near-retirement group is increasingly hungry for planning services but identifies another group driving the planning demand. "I'm also seeing more people in their early 30s, who you would think they'd be robo advisor–type clients, but they actually just want someone to point them in the right direction," he said.

Joseph Zarlinga, another founding partner at Stratos, said clients who are settling down and starting a family are driving a large chunk of the surge in demand for financial planning.

"Some of the younger people that want to hire an advisor are just limited on time nowadays. They're working, chasing their kids, going to sporting events or after-school activities and just really don't have the time to sit and do a good enough job," he said. "So I think the younger clientele that we're seeing have just come to the realization that there is all this information out there — they just don't have the time to do it and research it and they don't build the plan. So working with us gives them the ability to kind of focus on what it is that they need to focus on."

Each of these groups will benefit from a planner's reassurance and asset-protection skills, says Micah Wei, senior vice president of wealth management sales at Advisor Group.

"Especially in volatile times like this, planners tend to retain assets more," Wei says "They have a smoother ride, and better conversations with their clients as a result. And we've seen advisors getting into that and doing more planning," Wei adds.

Wei's firm and others are taking steps to accommodate the increasing demand for planning services. Wei said Advisor Group has ramped up its marketing efforts in anticipation of that interest.

"It's something that permeates everything that we do from a messaging perspective," he said. "We are building out our resources here internally in preparation for an increase of [demand] and building out our financial planning capabilities to help support and grow our advisors' businesses on that front."

Justin Horton, also a founding partner at Stratos, said the firm has increased communications with clients to explain the services it offers.

"We've certainly touched base with our clients a lot more this year because of the market volatility to remind them that there's a plan in place for periods like this where things may not or the market may not be going straight up," he said.

Meanwhile, Edelman Financial Engines has gone the more direct route of expanding advisor head count to stay ahead of planning demand.

"One way that we're preparing for market trends and increased demand is by drawing in top industry talent and expanding our financial planning team," TJ Dunker, senior vice president at Edelman, said in an emailed response to a request for comment. "Since the beginning of 2021, we've hired nearly 70 new planners and we'll continue to add more," Dunker added.

And though Stratos is a relatively smaller firm, Zarlinga says its client perceptions must be priced into hiring and resource allocation.

"I think equating it to kind of the market in general is kind of how we like to equate our business. We want to have our game plan before the game. So hiring people before we need people I think is what we really try to do," he said, adding that new hires bring the added bonus of bracing against industrywide aging of the advisor force.

"Along with the volatility of the market and inflation, there's many people in the business that are retiring advisors. We feel like there's going to be a need for advisors for years to come on top of the inflation in market volatility," Zarlinga says.