A survey released Tuesday by HNW Inc. found 60% of advisors felt the products they offered were too complicated, and 59% said an overall lack of financial literacy was a hindrance to their personal success. Still, 94% of respondents are happy with their career choice and will remain in the industry for the "long haul." Seventy-two percent say they have "more opportunities in this industry now than ever."
Independent advisors were especially optimistic. Just 12% said their company did a "poor" or "very poor" job of helping them communicate with clients or cope with market changes, compared with 23% of wirehouse advisors.
“The fact that advisors have the job of handling clients’ money but don’t fully understand the products they are selling should send a major signal to the industry,” Stacey Haefele, CEO of HNW Inc., said in a press release.
Advisors overwhelmingly felt regulations were a barrier to their personal success. Nearly three-quarters say keeping up with changes in regulations and financial products is a potential barrier, while 78% say the "specter of more regulation" is a barrier and 77% say there is too much existing regulation that limits their success.Furthermore,
The highest rated barrier to success, though, was consumers' lack of trust in the industry; 84% of advisors agreed this was a potential barrier to success.
The survey also found 55% of advisors are "unhappy with their firms’ reputation management during and after the economic crisis," and are turning to their own personal brand rather than relying on their firms' reputation.
According to the survey, almost 70% of advisors do not use social media services like LinkedIn, Facebook or Twitter. The survey attributed company and industry regulations as a reason for advisors reluctance to turn to those services as a marketing or business development tool.
“The limitations the industry is placing on the use of social media to communicate with clients is remarkable at a time when so many of their clients themselves use social media,” Haefele added.
When asked about how their clients responded to the crisis, 89% of advisors said their clients require more time and attention, and 86% said they want more comprehensive wealth management strategies. Despite nearly 60% of advisors citing lack of financial literacy as a barrier to success, 81% say their clients are more informed now, and are demanding greater transparency.
HNW Inc. is a marketing firm serving the wealth market. The firm surveyed over 600 financial advisors for the 2010 HNW Advisor Study.