Advisors Underestimate Clients’ Concerns About Health Care Costs And Taxes

Louisville, KY – June 13, 2016 – Registered Investment Advisors (RIAs), fee-based advisors and individual investors cite managing volatility, protecting assets and saving for retirement among their top concerns over the next 12 months—but advisors may underestimate clients’ concerns about healthcare costs and taxes, according to Jefferson National’s second annual Advisor Authority study, conducted by Harris Poll again this year. New to this year’s survey of 683 RIAs and fee-based advisors nationwide is an expanded survey of 733 individual investors, from mass affluent to ultra-high net worth, to help advisors understand their similarities and differences so they can serve their clients more effectively.

“This year’s Advisor Authority study shows how investors struggle to manage the threats that hit their bottom line today—such as rising healthcare costs and higher taxes—while also trying to protect and grow their assets for the future,” said Mitchell H. Caplan, CEO of Jefferson National. “Increasing political and economic uncertainty, both domestically and globally, creates opportunities for expert advisors to add value and underscores the importance of working with an unbiased fee-based or fee-only advisor to ensure that clients will be better off. New to this year’s study, Advisor Authority shows where investors and advisors see eye to eye—and where they don’t—to help advisors grasp the broader trends, zero in on what matters most, and take a more holistic approach to help investors at every level achieve their long term financial goals.”

The addition of more than 700 investors is just one of the new enhancements to Jefferson National’s second annual Advisor Authority study. To complement its year-over-year benchmarking survey on the top investing, advising and practice management issues, this year’s study includes a special report that takes a 360-degree view on volatility—its causes, its impact, and defensive measures to protect against it. And again this year, Advisor Authority offers in-depth analysis on the most successful advisors and thought leaders, to provide actionable insights that can help RIAs and fee-based advisors build a more enduring practice. Highlights from Jefferson National’s 2016 Advisor Authority include:

 

360° View on Volatility

• Volatility is on the rise over the next twelve months according to the vast majority of advisors (76%) and investors (63%) surveyed.
• Advisors are more likely to revise their investing strategy in response—nearly two-thirds (62%) of advisors versus just 41 percent of investors feel pressure to take action.
• Of those who will revise their strategy, 75 percent of advisors and 72 percent of investors plan to invest more tactically, while 69 percent of advisors and investors plan to invest more conservatively.

 

Bridging the Generational Divide:

• The top three strategies being implemented by advisors to attract the next generation of investors include: working more closely with a client’s family and children (36%), increasing use of innovative techniques such as social media (36%) and mobile technology (26%), and personalized holistic advice (24%).
• Successful advisors—those who earn more and manage more AUM—target younger prospects, and are more likely to invest in strategies to attract and retain the next generation.

 

Advisor and Investor Profiles: Serving the Ultra-High Net Worth

• The ultra-high net worth say taxes are the number-one issue that will adversely impact their portfolio in the next 12 months.
• These affluent investors place greater importance on technology, such as website enhancements, leveraging robo advice, robust cyber security and mobile access.
• This aligns with the 2015 study which showed that the most successful advisors use more technology, are more likely to adopt robo, and more likely to use robo with affluent clients.

 

Transparency and Guided Advice Matter

• More than three-fourths (77%) of RIAs and fee-based advisors will not make an investment unless they can effectively communicate the strategy to clients—or know their clients understand it.
• When choosing an advisor, investors’ top three priorities include: experience (46%), personalized holistic advice (26%), and a fiduciary standard (24%).

 

“This year’s Advisor Authority study shows that RIAs, fee-based advisors and investors share many common goals, and investor optimism increases when working with an advisor. It also reveals a number of key issues that weigh on investors’ minds, providing an opportunity for advisors and their clients to more closely align on what matters most,” said Laurence Greenberg, President of Jefferson National. “As our study reveals, investors care about the issues of transparency and fees, so if an advisor does not put their clients’ best interests first, clients will find someone who does. The future is fee-based and nothing can replace holistic, unbiased and guided advice—a commitment that RIAs have been making from day one.”

To download a copy of Advisor Authority, financial professionals can visit: www.jeffnat.com/advisorauthority.