Advisors increased client engagement as markets got stormy, study says

By Ayo Mseka

As consumers grapple with a wide range of financial challenges – including high inflation, stock market volatility, and recent bank foreclosures – three quarters of financial advisors surveyed said they have increased their level of engagement with clients, according to a recent study.

Most financial advisors are communicating with clients monthly (44%) or even weekly (42%) followed by several times a month (10%) and quarterly (4%), according to new research from the financial-services firm, Edward Jones.

In-person meetings lead client engagement

Also, there has been an increase in the number of in-person meetings. In fact, in-person meetings are back as the most common method through which financial advisors communicate with their clients.

As they prepared to navigate financial hardship, the respondents' clients relied the most on:

Life insurance (64%)
Cash/emergency savings (58%)
Retirement savings (43%)

Consequently, the survey pointed out, 69% of financial advisors are confident that their clients' emergency savings fund will last for three months or longer.

The study really demonstrates the value of working with a financial advisor, said Jesse Abercrombie, an Edward Jones advisor in Plano, Texas. Almost nine in 10 financial advisors (88%) believe that most of their clients feel financially resilient. This means that they can withstand or recover quickly from difficult financial conditions.

“In fact,” Abercrombie noted, “one third (32%) report that all their clients feel financially resilient.”

Groups most vulnerable

Perhaps not surprisingly, the financial advisors who participated in the study reported that millennials (43%) are the generation that is the most vulnerable to financial hardship. They are followed by Gen Z (36%), Gen X (17%) and baby boomers (4%).

Surprisingly, financial advisors reported that individuals who have a household income of $101K-$200K per year are twice as vulnerable to financial hardship as those with household income of under $50K (20%), or those with $51-100K (20%).

Millennials are typically in the peak earning years of their career and tend to experience major life changes, such as pursuing advanced education, getting married, purchasing a home, and having kids, Abercrombie explained. These major life milestones present an opportunity for financial advisors to help individuals create a financial plan that will allow them to achieve these goals.

Increasing client communication

Nothing can replace the value of human interaction, Abercrombie said, as he shared a few methods that financial advisors can use to increase the level of communication and client engagement.

“Having a face-to-face interaction with a client, seeing their body language, and laughing together, build deeper, more personalized relationships and allow advisors to better understand their values,” he said.

The study, Abercrombie said, showed that financial advisors recognize the value of in-person meetings as they are now the most common way for them to communicate with clients (38%), followed by email (24%), phone calls (23%) and virtual meetings (16%).

During times of market volatility, financial advisors can help clients stay accountable and ensure that clients are making decisions that support their long-term goals.
“Technology offers the ability to have these more frequent touchpoints by leveraging virtual meetings, email and text,” he said.

It’s also critical to ask clients in discovery meetings how often they’d like to meet.

“Some want to meet a few times per year, some quarterly, and some more often. If clients have a specific need related to their goals, such as creating an estate plan, it may make sense to meet more frequently,” he added.

The Edward Jones client engagement survey was conducted by global data intelligence company Morning Consult among a national sample of 200 financial advisors from March 24-31, 2023.

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].