Investor Survey Reveals Advisors are Still Battling Loyalty and Client Self-Confidence When It Comes to Their Financial Futures

New Investor Report highlights the value of an advisor's voluntary certification, illuminates clients' changing perceptions of the advisor relationship, and explores the impacts of the COVID-19 pandemic.

Greenwood Village, Colorado, UNITED STATES


DENVER, CO, Sept. 15, 2021 (GLOBE NEWSWIRE) -- The Investments & Wealth Institute released its 2021 Investor Report, conducted by Absolute Engagement, in partnership with Hightower Advisors, LLC., and the Behavioral Investing Institute. This study, conducted annually since 2017, provides a look at how clients' views have changed. This new investor research, fielded during April-May 2021, further illustrates the changing client perceptions regarding their advisory relationships and the impacts that the COVID-19 pandemic has made on clients' lives.

With the world still dealing with the COVID-19 pandemic, the research looked closely at investor behavior, satisfaction, loyalty, and confidence. The omnibus study further examined the behavioral aspects through an additional report released in July, 2021 Investor Behavior in a Market Crisis.

"Last year's results told the story of declining loyalty, reduced self-confidence, and shifting needs and values. This year's results demonstrate which changes were temporary blips and which suggest that the client experience needs to change going forward," observed Julie Littlechild, founder and chief executive officer, Absolute Engagement.

Highlights of the research:

  • Overall, most clients (92%) are satisfied with their advisory relationship; however, loyalty continues to be tested.
  • Notably, the importance of credentials to clients has grown significantly, particularly in the last two years. Compared to 2019, there was a 62% increase in the percentage of clients who listed the value of designations as "very important" if searching for a new advisor today.
  • The top competencies rated by clients continue to be investment management, followed by financial planning, retirement management, and private wealth advice.
  • Unsurprisingly, the pandemic is changing how clients think about the future. While a minority of respondents indicated they had been negatively impacted financially by the pandemic, two-thirds of respondents indicated that they have changed how they think about the future. Interestingly, respondents were more likely to report that the pandemic had impacted their financial futures in ways that are not purely financial.

The most significant finding is how the client experience needs to evolve from pre-pandemic times to meet today's expectations. Not only will advisors need to provide more frequent reviews for some clients, but they will also need to adjust how they meet with clients (in-person versus virtual). Personalization will be critical as advisors look to add value, deepen client relationships, and provide the white-glove service high-net-worth clients are looking for.

"The last two years have provided an evolving backdrop with which to examine the perceptions of clients and their advisory relationships. Interestingly, the foundation of what makes an exceptional advisor in the eyes of the client has not changed," remarked Sean R. Walters, CAE®, chief executive officer, Investments & Wealth Institute. Adding, "the study is a reminder that Exceptional Advisors must respond to the changing needs, priorities, and values of their clients, and that those things can change rapidly, especially during periods of uncertainty. Sometimes those changes are temporary, but the data is clear that many may be more permanent."  

The importance of professional designations increased substantially from 2019. 47% of clients in 2021 stated that if they were looking for a new advisor today, professional designations would be “very important” in making a decision–up from 29% in 2019. In addition, more than half of clients believe it important for their advisor to hold more than one designation, because it speaks to their ability to deliver a broader range of service and deeper technical expertise.

When discussing the credentials held by their advisor, 74% of clients assume that the designation is issued and accredited by an objective, non-profit, third-party certification body. 81% assume their advisor met a rigorous set of standards to be certified. Finally, 82% assume ongoing standards are required to maintain their certification, and that their advisor would lose their designation if they failed to meet ethics standards.

"This research really highlights the value of advanced capabilities when it comes to providing HNW clients the service and support they value, and the rigor and quality approach taken by certification bodies in administering credentials" continued Walters. "Through our CIMA®, CPWA®, and RMA® certifications, the Investments & Wealth Institute provides professionals the ethics and expertise they need to better meet client expectations."

Drawing on the findings of this study since 2017, the Investments & Wealth Institute created an online program, Exceptional Advisor® Communicate Your Value and Build Client Engagement.  Consisting of five modules, the program is designed to provide advisors a better understanding of what clients consider important, provide meaningful guidance, demonstrate advanced knowledge through credentials, and highlight a commitment to ethics. The program teaches advisors how to develop client communication and action plans. In addition, the Institute has developed an Exceptional Advisor® Toolkit, available to Institute members and CIMA®, CPWA®, and RMA® certificants. The toolkit provides an array of client and advisor resources.

To read the full report: https://iwicentral.org/2021InvestorReport

To read additional original research conducted by the Institute, visit:  https://iwicentral.org/ResearchLibrary

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For Information:

For additional information, contact Devon Coquillard, communications manager, dcoquillard@i-w.org, or (303) 850-3202.

About Investments & Wealth Institute

Founded in 1985, the Investments & Wealth Institute is the premier professional association, education provider, and standards body for financial advisors. Through its award-winning events, publications, courses, and acclaimed certifications—Certified Investment Management Analyst® (CIMA®), Certified Private Wealth Advisor® (CPWA®), and Retirement Management Advisor® (RMA®)—the Institute delivers Ivy league-quality, highly-practical education to more than 30,000 practitioners annually in over 40 countries.  Members of the Institute include the industry's most successful investment consultants, advanced financial planners, and private wealth managers who embrace excellence and ethics in applying a broad set of knowledge and skills in their daily work with clients. www.investmentsandwealth.org

The Exceptional Advisor® Model

The Exceptional Advisor® program is born out of research conducted by the Institute and AbsoluteEngagement.com. The research shows that clients value an advisor who demonstrates advanced capabilities, exceptional service, a personalized approach, and meaningful guidance. All this is built on the pillars of adherence to high ethical standards and expertise in the field. This model depicts the core competencies of an Exceptional Advisor.

The Exceptional Advisor® program is designed to showcase your expertise and create awareness of your advanced knowledge and certifications, by providing the tools you need to tell your story and help you demonstrate how you fulfill what clients want.

Methodology

The study was commissioned by the Investments & Wealth Institute and conducted by Absolute Engagement and included input from 751 high-net-worth (HNW) investor respondents, via an online survey, between April and May 2021. All respondents work with a financial advisor, make, or contribute to the financial decisions in the household, and met defined investable asset criteria.

About Absolute Engagement

Absolute Engagement helps financial advisory firms use direct input from clients to drive deeper engagement and growth. . Founder and Chief Executive Officer, Julie Littlechild, is a recognized expert on the drivers of client engagement and a popular speaker on how client experience is being disrupted and how to leverage those trends to drive referrals. Ms. Littlechild has presented at numerous Institute events, both in-person and online. She has worked with and studied successful financial advisors and their clients for more than twenty-five years.  Previously, Ms. Littlechild launched and ran one of the industry's leading research firms, focused on client engagement. She is the author of a popular blog, the co-host of the Becoming Referable podcast, and the author of The Pursuit of Absolute Engagement. For more information, visit www.absoluteengagement.com.

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