Financial advisers and their clients: It’s complicated (or is it?)Blog added by Paul Wilson on April 29, 2011
Paul Wilson

Paul Wilson

Denver, CO

Joined: May 30, 2007

My Company


It seems that every few weeks, a new study comes out detailing the many demands placed on financial advisers and the ever-present threat of getting kicked to the curb.

A recent Spectrem Group survey highlighted the tight leash that many millionaires place on their advisers. Basically, if you’re working with the affluent, you’d better be at their beck and call 24/7 or they will be looking elsewhere.

Another study, “Rebuilding Investor Trust,” from Northstar/Sullivan found that one-quarter of wealthy investors would be willing to switch to a new adviser who could provide better investment options or customer service. And this despite the fact that more than half of those surveyed said they are currently “very satisfied with their adviser.” Tough crowd.

This week, Cogent found that a large portion of Generation Xers are dissatisfied with their advisers — and this time, they might have a point. The report found that affluent Gen Xers who made investment decisions on their own actually saw better average asset growth than those who worked with advisers. Ouch.

Obviously, there’s no one answer to account for all of those wandering eyes and the sense of dissatisfaction. For one thing, a side effect of owning a business in a society based on free enterprise is the reality that your customers are always looking for greener pastures. It’s no different than when you’re shopping for an Internet provider or new sushi joint. And as the Northstar/Sullivan survey mentioned earlier proves, even “satisfied” Americans are never truly satisfied.

Still, if you read enough of these studies, you do begin to get a clearer idea of what most Americans are really after.

When clients are asked what they want from their advisers, two words come up again and again: honesty and communication.

Want proof?

This MFS Investment Management survey found that many advisers are not tuned into their clients concerns, while in this survey, Americans displayed their lingering fragility in the wake of the recession along with a genuine desire for clearer explanations from their advisers.
    According to the report, “The economic crisis clearly has bred confusion and skepticism among investors. They continue to struggle with volatility.” While investors would like their advisers to listen to them, “many advisers are not communicating well enough with their clients.”
And speaking of a lack of communication, when was the last time most advisers checked in with middle America? According to Bankers Life and Casualty Company, it’s been a while. Their recent report found that more than half of middle-income Americans have not been contacted by any type of retirement professional in the last year.

Meanwhile, it seems that affluent women, among others, value honesty and transparency most highly when selecting a financial adviser, and view advisers who come across as sales driven or guarded with suspicion.

In fact, when asked about the top traits they’re looking for in a financial planner, Americans ranked knowledge and honesty more highly than the price of services.

In case I haven't thrown enough information at you, here’s a good analysis of customer loyalty in the insurance industry which breaks down various factors and trends and includes some useful action items.

And despite the recent rash of gloomy reports, it sounds like things could be on the upswing.

So, when was the last time you reached out? There’s no time like the present!
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