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Survey flags advisor shift to financial planning

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Nearly 40 percent of investors desire more investment advice, according to a new research.

Cerulli Associates discloses this finding in “U.S. Retail Investor Advice Relationships 2013: Sorting Out the Winners and Losers.” The report examines aspects of the relationship between financial providers and retail investors, including client acquisition, advice delivery, investment management, pricing and retention strategies.

The report reveals that 43 percent plan to offer comprehensive financial planning to their clients in 2016, up from 33 percent in 2013. Smaller percentages of the advisors polled intend to offer modular (issue-focused) planning (27 percent), modular advice with no formal planning (15 percent) or no financial planning services (also 15 percent).

“Instead of just focusing on portfolio management, comprehensive planning requires [a] significant effort from both [advisors and their clients],” the report states. “Cerulli believes that the improvement in client outcomes and expanded depth of relationship associated with comprehensive advice more than outweighs the challenges.

“As such, Cerulli believes that providers will be rewarded for making their best efforts to make the planning process more painless, largely through the adoption of better technology integration and by making comprehensive advice a core part of their client experience,” the study adds.

The report notes also that most investors don’t understand the compensation structure of their providers. The investors who don’t know what they’re paying tend to become the least satisfied clients.

The largest proportion of investors who say they’re satisfied with their provider have an advisor who combines fees with commissions. Fewer of the satisfied investors have an advisor who derives compensation solely from fees or from commissions.


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