DFA: What Clients Value Most in Their Advisors

Service, returns still critical to maintaining relationship

A survey released Wednesday by Dimensional Fund Advisors found that while investors use emotion to measure the primary value received from their advisor, the most important attributes of that relationship are more practical.

Dimensional surveyed almost 19,000 investors in February and March who work with advisors at the firm. It found that over a third of respondents say a sense of security or peace of mind is the primary value of working with an advisor.

(Related: No Robo-Advisor Will Ever Truly Master Client Service)

“Peace of mind may be attributed to many aspects of an advisor relationship, and in our view it is an outcome of advisors helping investors feel prepared by setting the right expectations,” Dave Butler, Dimensional co-CEO and head of Global Financial Advisor Services, said in a statement.

Just 14% of investors said investment returns are the primary factor in determining their advisor’s value.

That doesn’t mean returns aren’t important to investors. Drilling into which attributes of the relationship are most important, 32% of investors said returns.

Almost as important is the service experience, cited by 31% of investors as the most important part of an advisory relationship.

Offering a broad range of services isn’t nearly as important as demonstrating familiarity with a client’s personal situation. Over a quarter of respondents said it was important to them that their advisor have experience with other investors similar to them.

“Returns matter, but having a plan and remaining disciplined are just as important for long-term investment success,” Butler said. “When investors work with an advisor who has a holistic understanding of their personal situation and can help them stay focused on their long-term goals, we believe they are better positioned to benefit from what the capital markets have to offer.”

David Booth, founder and executive chairman, added, “In our view, peace of mind is what success is all about. Achieving returns in a way that enables people to relax just a little bit more is very important to us and also to investors.”

--- Read Value, Not Fees, Must Drive Investment Decision-Making on ThinkAdvisor. 

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