91% Of Clients Likely To Keep Advisor, But Want Changes, Survey Finds

Overall, clients are satisfied with their advisory relationships, and the most significant client concerns have less to do with the level of service being provided and more to do with their own level of self-confidence about their financial future.

These are among the highlights of a research study conducted by Absolute Engagement and Investments & Wealth Institute to understand the needs and concerns of high-net-worth (HNW) investors and support financial advisors in defining and evolving an exceptional client experience.

Although in general, clients are satisfied with their advisory relationships, their loyalty is being tested. In addition, clients are concerned about personal or family health, market uncertainty, helping their children make good financial decisions, job security for their children, and caring for elderly parents.

Also, the pandemic is changing how they think about the future. A minority of respondents indicated that they had been negatively impacted financially by the pandemic, but two-thirds of respondents indicated that they have changed about how they think about the future.

The client experience needs to evolve, the survey pointed out. Advisors will need to invest more time in client reviews, with a quarter of clients looking for more contact going forward.

In addition, almost as many respondents prefer in-person reviews as prefer virtual reviews or have no preference, respondents are clear that the quality of a virtual review can be as high as in-person (and sometimes higher), and personalization will become more important in the future to respond to the wide range of client needs and interests.

The foundation of the exceptional experience has not changed, the survey pointed out. Respondents continue to rate trust, expertise, and ethics among the most important attributes of the advisory relationship, and multiple, voluntary designations continue to be important to demonstrate expertise and stand out in a crowded marketplace.

Although overall loyalty is high, with 91 percent of clients saying they are somewhat or very likely to continue working with their advisor, about one-third of clients say they have considered making a change. This is a one percent increase over 2020 and an 11 percent increase over 2019, the survey pointed out.

The Impact Of The Pandemic

For 45% of the respondents, the pandemic has had little financial impact. Respondents were more likely to report that the pandemic had impacted their financial futures in ways that are not purely financial. Two-thirds of respondents indicated that they have changed how they think about the future.

The survey includes a broad-based sample of high net worth investors, many of whom are retired, said Julie Littlechild, founder and CEO of Absolute Engagement, as she offered some reasons for this low level of financial impact on survey respondents.

“If you segment by age it’s a different story. 20% of respondents under age 45 say there was no impact and 63% of those between 65-74 say there was no impact,” she said. “Because this is a high-net-worth sample and crosses different industries, we find that some were negatively impacted and some positively impacted.”

Client Preferences And Interests

Going forward, the respondents said they would like to meet with their advisor, on average, 2.5 times per year. Expectations were strongly influenced by both age and wealth, with younger clients and wealthier clients looking for more frequent reviews.

For one-quarter of respondents, the number of reviews they expect in the future is higher than they would have wanted in the past. This means, of course, that advisors will need to increase the amount of time they invest in client reviews, the survey pointed out.

Respondents were most likely to say that their level of interest in the following issues had increased since the start of the pandemic: changes to tax legislation as a result of a new administration, and health and wellness.

And although the topics of interest for respondents had changed, so too had their preferences about how educational content is delivered. Respondents were most likely to choose formats that could best be described as “accessible on-demand,” such as access to articles or other resources, the survey noted.

Exceptional Client Experience

As advisors build and evolve exceptional client experiences, Littlechild’s advice to them is pretty straightforward: When clients are asked what is most important, they tend to focus on things like trust, knowledge and ethics, she said. “We consider these foundational,” she added.

“An exceptional experience, however, goes beyond the foundational and demands that advisors demonstrate strong leadership. The extent to which advisors can focus on key client concerns and have the difficult conversations are key. We know that 82% of clients say the pandemic has had some impact on how they think about their future. The best advisors will lean into that and focus on how those needs are evolving.”

In conducting the survey, Investments & Wealth Institute and Absolute Engagement gathered input from 750 high-net-worth investors. Data was gathered via online surveys during April and May of 2021.

Ayo Mseka has more than 30 years of experience reporting on the financial-services industry. She formerly served as Editor-In-Chief of NAIFA’s Advisor Today magazine. Contact her at [email protected].