By Cyril Tuohy
Market declines, a shaky economy and regulatory issues are the top three worries keeping financial advisors up at night, according to a recent survey. Advisors are also concerned about misinformation, client fears and emotions, and not having enough time to get work done.
Those findings are contained in the Principal Financial Well-Being Index, released this month, which surveyed 614 advisors in May. The Harris Poll conducted the online survey on behalf of Principal Financial.
The survey found that 57 percent of advisors fear market declines will have a negative impact on their business, 51 percent fear those negative impacts will come from a worsening economy, and 46 percent consider regulatory issues their greatest “pain point.”
The survey, which polled advisors with a minimum of two years’ experience and personal incomes of $75,000 or more, found that 61 percent of advisors considered their clients to be in good shape in the area of financial planning, but only 21 percent were confident their clients could deal with a disability or an event that would prevent the clients from going to work.
A majority of the advisors said their stiffest competition isn’t always from other advisors poaching clients or providing better service.
“One of the biggest challenges advisors face is helping clients try to catch up when they didn’t start saving for retirement in the early years of their careers,” said Tim Minard, senior vice president of distribution for The Principal.
In the survey, 34 percent of advisors said clients' fear-induced lack of financial action was their biggest competition; while 37 percent of their new clients, on average, come to them because of dissatisfaction with their previous financial professional.
The advisors also listed their clients’ top blunders as living beyond their means, not saving enough, or not starting early enough to save for retirement.
For all the talk about robo-advisors and the competition from online advisory sources, the advisors didn’t seem the least bit perturbed. The survey revealed that only 4 percent of advisors felt threatened by online advisors.
Fifty percent of the advisors in the survey said they use social media in one way or another. Of those, 25 percent said they use social media to communicate with clients, 25 percent use it to deepen existing relationships and 23 percent use it to help find new clients.
While surveys routinely find that members of Generation X and Generation Y are lacking in their retirement preparedness, the advisors themselves think they are doing very well by comparison.
Eight out of 10 advisors rated themselves as healthy or very healthy in matters of their overall financial health; 77 percent rated themselves as healthy or very healthy in terms of their physical health, and 83 percent rated their business as healthy or very healthy.
Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].
© Entire contents copyright 2014 by InsuranceNewsNet.com Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com.