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MainStay Survey Highlights How FAs Can Best Work with Clients

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“The Five Attributes of Highly Successful Financial Advisors”, the latest executive summary of MainStay Investments 2006 Across Generations survey, found that an advisor’s ability to provide meaningful advice, build trust, and attend to personal needs are considered “top advisor must-haves” by over 85 percent of investors who use a financial advisor.

“Investors are deciding whether they will work with a particular advisor based on factors such as trust and personal attention; quantitative metrics and product offerings are irrelevant if these ‘softer’ attributes are not there,” notes Christopher Blunt, president of MainStay Investments. “Our results suggest that advisors need to rely on interpersonal and counseling skills to forge deeper relationships with their existing clients and cultivate new ones with potential clients.”

This appears to be particularly true when it comes to boomer clients. “Baby boomer investors, who are grappling with uncertainties about their retirement today, are particularly sensitive to advisors’ relational skills. They want to work with advisors who demonstrate concern for more than just the current performance of the investment portfolios; 73 percent say they want someone who will counsel them on preparing for retirement and 60 percent say they seek advice on generating income in retirement.”

Top Five Attributes

The top five attributes of financial advisors, as reported by 1,078 respondents indicating that they already have an advisor or are considering working with one, are:

Tailor Your Advice: When it comes to investing, clients want advisors to weigh in with knowledgeable advice and expertise, and to refrain from taking a one-size-fits-all approach (88 percent).

Be Trustworthy: Today’s investors want their advisors to convey a feeling of trust from the onset and work to build that trust throughout the relationship (85 percent).

Address Personal Needs: Investors want advisors to ask about their concerns – i.e., caring for aging parents, paying for college, saving for retirement – and to address them (85 percent).

Control Expectations: Investors expect to achieve above average returns (82 percent).

Communicate Frequently: Investors want advisors to maintain consistent and ongoing communication, be responsive to their concerns, and demonstrate a thoughtful and genuine interest in their well being (80 percent).

The study found that 52 percent of investors are looking for more than investment planning advice from their financial advisors, such as college savings or retirement planning. These findings explain investors’ interest in working with advisors with whom they feel at ease and who take a longer-term, relationship building approach to their business.

Role of Credentials

The 2006 Across Generations survey found that an advisor’s affiliation with a firm, and his or her professional credentials, are criteria that are simply baselines for consideration by investors, not differentiators. For example, 50 percent of investors surveyed find firm affiliation “extremely important” or “very important” when choosing to work with a financial advisor.

In addition, 56 percent of investors placed similar importance on advisors holding professional designations. And while 71 percent of mass affluent investors currently work with advisors who have at least one professional designation, 40 percent admitted not completely understanding the benefit of the designation. Advisors who take the time to illustrate the benefits of their firm affiliation and their professional designations to clients and potential clients will deepen these relationships, MainStay’s research concludes.

Meeting Your Clients Growing Expectations

The survey indicates that, despite his or her technical expertise or financial acumen, advisors may not be able to win new clients or retain existing accounts without an emphasis on the “high touch” communication skills that are critical to facilitating relationships.

Advisors should consider the following when working with clients:

o Avoid indulging your inner salesperson – Nearly half (48 percent) of investors believe that advisors focus on making money instead of helping clients.

o Don’t be a stranger – Surprisingly, 43 percent of investors said that advisors don’t stay in touch.

o Avoid the cookie-cutter approach – Some 40 percent of investors complain that advisors take a one-size-fits-all approach.

o Show interest in all clients – Another 40 percent of mass-affluent investors think advisors only care about their wealthy clients.

In the eyes of the mass affluent, successful advisors embrace a skill set that goes beyond product selling and hitting the numbers. Mass-affluent investors value advisors who are client-centered and take a personal approach to building relationships. An advisor’s ability to draw on these skills can result in better client retention, an increase in referrals, and additional assets.


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