February 24, 2011

Advisor Opinion Split on Recession’s End, According to Curian Capital Survey

Client risk tolerance remains low; advisors struggle with time management and efficiency

Saying is one thing, doing another; especially when it comes to the advisor’s time management. That’s one finding from Curian Capital’s annual advisor survey released Wednesday.  Curian, the separately managed account arm of Jackson National Life, surveyed independent advisors to gauge how market volatility and the economic climate have impacted their perceptions in four main areas – economic outlook; product selection and investment strategies; business development; and platforms and providers.

“The advisor’s struggle with time management came through in this year’s survey,” said Mark Schoenbeck (left), senior vice president and chief marketing officer for Curian. “They say time management is a priority, but actually doing the required client segmentation and then changing their behavior is a whole other story.”

According to the survey, 62% of advisors say that improving efficiency and overall time management is a major goal for the coming year. Nearly 81% of respondents will focus on acquiring more affluent clients in 2011 and 59% plan to market their business more aggressively.

Advisors’ economic outlook is split nearly evenly, with 42% believing the recession is over and 46% believing it is not over. Also, the recent rise in the equity markets is not enough to impact clients’ risk tolerance; 88% of respondents say their clients’ risk tolerance is either lower or unchanged compared to a year ago. And more than two-thirds of advisors believe inflation is a growing concern that will begin to impact portfolio construction within the next two years.

When asked about product selection and investment strategies, 43% of advisors feel that not generating enough income to last through retirement is the biggest threat to their clients’ retirement plans, and report that only 36% of their clients feel the same. More than two-thirds of advisors say their clients are requesting more conservative investments and guaranteed income features, while 44% say clients are requesting a tactical asset allocation approach.

Lastly, the survey found most advisors value product expertise, investment research and marketing support from product providers, but also report that they don’t have time to utilize these services, and delivery is often ineffective.

“The findings bring to light two key themes–clients are still apprehensive about investment risk and their retirement preparedness, and advisors continue to struggle with managing their time and resources effectively,” said Chris Rosato, senior vice president of strategic development for Curian. “Taken together, these two points speak to the need for both a broader range of investment solutions, and a platform that can help advisors manage those solutions for multiple clients in the most efficient way possible.”

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