March 01, 2022
Advisors believe they know what their clients want. But research often finds a gap between client expectations and advisors’ assumptions. This can result in unsatisfied clients and client turnover.
To help advisors understand their clients better, the American College O. Alfred Granum Center for Financial Security in collaboration with faculty from the American College Cary M. Maguire Center for Ethics in Financial Services and the American College Center for Women in Financial Services conducted a national online survey of 1,157 individuals to answer some key questions. Understanding our findings may help you build better relationships with your clients.
What characteristics do people want from an advisor?
Respondents were asked to “rank the most important characteristics you would look for” when selecting a financial advisor. Here is what they said:
| Advisor Characteristics You Would Look For | #1 | #2 | #3 |
| Evidence of knowledge (education, certifications) | 27.2% | 11.7% | 10.4% |
| Trustworthy | 20.1% | 13.5% | 13.2% |
| Ability to listen to and understand your goals | 18.9% | 19.5% | 13.5% |
| Clearly communicates financial concepts | 10.8% | 7.6% | 9.5% |
| Positive recommendations by people you know | 8.0% | 12.8% | 12.9% |
| Online reviews | 4.4% | 6.8% | 7.5% |
| Values my input | 2.2% | 9.3% | 12.2% |
These results show that clients value education and certifications, as well as trustworthiness and advisors’ ability to engage with and understand clients’ goals.
What services are consumers looking for when they seek out professional advice?
Advisors need to understand the specific services that clients need. As the chart below shows, they are most interested in getting help preparing for retirement and managing investments.
We also asked if consumers seek out advisors who can evaluate investments and make portfolio recommendations, or are primarily interested in an advisor who develops a plan to meet various financial goals.
Interestingly, 52.5% primarily sought help meeting financial goals, while 47.5% felt that investment evaluation was a more valuable service. This indicates that more consumers are looking for goal-based planning services than traditional investment advice.
How important are environmental, social, and governance (ESG) factors?
We asked our respondents, “How important is it that your advisor considers the environmental and social performance of the companies you will invest in?” The answers surprised us.
Clearly, clients care about ESG. They also care about their advisors’ personal values – 53.8% said an advisor’s personal values influence their decision to do business with the financial advisor.
Did COVID change the importance of in-person advice?
The pandemic had a major impact on how advisors deliver services and many wonder how clients feel about the changes. Our findings suggest that most clients prefer a balance of online and in-person services.
When we asked our respondents, “What is your preferred form of contact with a financial advisor?” we found that:
- 52.3% prefer an initial in-person meeting followed by subsequent Zoom or telephone meetings
- 38.9% prefer in-person only
In terms of meeting frequency, a plurality of respondents felt that every 6 months was the sweet spot – although some disagreed.
Are young investors overconfident?
As advisors try to recruit new young clients, they may need to better understand how consumers’ confidence and financial knowledge levels change with age.
Financial literacy scores – measured by how many correct answers respondents provide for questions about financial concepts – increase with age. The percentage of correct answers is:
- 38.6% for those under age 30
- 42% for those in their 30s
- 45.8% for those in their 40s
- 58% for those in their 50
- 65.8% for those in their 60s
- 71.2% for those 70 and older
Despite the increase in knowledge with age, however, the percentage who indicated that they were “very confident” choosing investments fell from 40% for those under 40 to 10.2% for respondents in their 60s and just 5.3% for respondents in their 70s and older.
Bottom Line
In summary:
- Consumers want advisors who are knowledgeable, trustworthy, and good listeners.
- Saving for retirement in defined contribution plans has created a strong desire for knowledge of retirement income planning.
- Investors want their advisor to consider their ESG preferences when building an investment strategy.
- More consumers prefer to attend regular meetings with their advisor either through Zoom or a phone call, but a strong majority still prefers to be physically present for initial meetings with an advisor.
- Young investors are confident in their ability to choose investments, but also score poorly on financial literacy. This may suggest that younger investors are vulnerable to overconfidence.
Download the 2022 Granum Center for Financial Security Consumer Survey results here.
FAQs
Consumers want advisors who are knowledgeable, trustworthy, and good listeners. Saving for retirement in defined contribution plans has created a strong desire for knowledge of retirement income planning. Investors want their advisor to consider their ESG preferences when building an investment strategy.
What do clients want from their financial advisor? ›
Clients want to feel confident when they make financial decisions. That indicates it's important for advisors to take the lead in providing behavioral guidance, even though this may be a service that clients don't specifically request by name.
What clients value most in a financial advisor? ›
The Qualities Investors Value
| Quality | Most Important | Least Important |
|---|
| Ability to understand my risk tolerance and appropriately align my investments | 47% | 17% |
| Specialization in specific financial situations, such as retirement planning | 45% | 17% |
| Ability to communicate complex financial concepts in an understandable way | 42% | 22% |
10 more rowsMar 4, 2024
A good financial advisor can show you how they have helped people like you, break down the strategies they use, explain why they are the best at what they do, and have a clear and transparent fee structure. You should understand their strategy before hiring them and how they plan to help you.
What is the most important thing for a financial advisor? ›
Key Takeaways
- Getting clients and having them stick with you and then later recommend you means putting them first.
- Meanwhile, you must have a deep understanding of the markets, analytical skills and training, and a passion for finance.
- Soft skills are as critical as hard skills, like investing skills and market timing.
Today's customers want their financial services providers to offer personalized solutions, know their needs, and offer help and guidance.
What do people want out of a financial advisor? ›
Consumers want advisors who are knowledgeable, trustworthy, and good listeners. Saving for retirement in defined contribution plans has created a strong desire for knowledge of retirement income planning. Investors want their advisor to consider their ESG preferences when building an investment strategy.
How to stand out as a financial advisor? ›
As a financial advisor, it can be challenging to stand out in a crowded market. That's where niche marketing comes in. By focusing on a specific target audience or area of expertise, you can differentiate yourself from the competition and attract clients who are looking for exactly what you offer.
How do financial advisors add value to clients? ›
A financial planner can act like a personal trainer for your finances: providing you with an assessment of where you're at currently versus where you want to be, write out a plan for execution, and hold you accountable. Consider the cost of inaction the next time you think about your finances.
What is the core value of a financial advisor? ›
Integrity: Provide professional services with integrity. Objectivity: Provide professional services objectively. Competence: Maintain the knowledge and skill necessary to provide professional services competently. Fairness: Be fair and reasonable in all professional relationships.
Financial advisor fees
| Fee type | Typical cost |
|---|
| Assets under management (AUM) | 0.25% to 0.50% annually for a robo-advisor; 1% for a traditional in-person financial advisor. |
| Flat annual fee (retainer) | $2,000 to $7,500. |
| Hourly fee | $200 to $400. |
| Per-plan fee | $1,000 to $3,000. |
Apr 26, 2024
The income statement, balance sheet, and statement of cash flows are required financial statements. These three statements are informative tools that traders can use to analyze a company's financial strength and provide a quick picture of a company's financial health and underlying value.
What is the most important attribute when selecting a financial advisor? ›
In one of the articles I've read in the finance strategists website, the key qualities of a financial advisor include trustworthiness, expertise, effective communication, adaptability, and a client-centric approach.
What do clients look for in a financial advisor? ›
It should go without saying that clients are also looking for a financial professional who is competent and has integrity. But are those qualities enough? The way you offer advice, transparency in your interactions, and the personalized experiences you provide are also qualities that prospective clients want.
How to motivate financial advisors? ›
5 ways financial advisors can get motivated:
- Get out of negative thinking. If you've been focused on “woe is me” I challenge you to turn it around. ...
- Decide to be a role model for your clients and family. ...
- Get to work earlier. ...
- Try meditation, affirmations, and gratitude. ...
- Create a prospecting plan.
A good financial planner will ask you about your goals: What do you want to achieve? What's most important to you? What do you want your life to look like?
What are investors looking for in a financial advisor? ›
2. Clients value the expertise, trust, and reputation when looking for an advisor. As clients become more educated, they are looking for financial advisors who can provide them with more than just investment advice. Clients want to work with someone they can trust to help them achieve their financial goals.
What should I expect from my financial advisor? ›
Most advisors will be able to help with the following: Helping you create an emergency fund. Assisting with saving and budgeting. Planning to meet short- and long-term goals.
What do high net worth clients want? ›
The high-net-worth client is no exception. For HNW clients, it's not just about investments and account growth—it's about what their money can do for them. Whether it's leaving a legacy for their grandchildren, sailing around the world, or establishing a non-profit, wealthy clients expect their money to have an impact.
