When it comes to helpful tools for clients, what advisors are using and how they are being used varies considerably from channel to channel.
RIAs, for example, appear to have far lower usage or interest in these client-approved resources. And wirehouse advisors are more likely than other advisors to use these resources outside of an in-person meeting.
A new study by Practical Perspectives examines how financial advisors use client-approved resources, specifically examining client-approved materials and tools.
“Providers of client-approved materials and tools should recognize that the needs and interests of advisors are not homogeneous and vary by segment,” the report states.
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Practical Perspectives defines “client-approved resources” broadly, including letters, brochures, worksheets, web content, online calculators, illustrations, and other nonregulatory communication pieces, content, and tools that are approved for advisors to use directly with prospects and clients. Excluded were communications such as statements, prospectuses, annual reports, or other content driven by compliance or regulatory requirements.
“A one-size-fits-all approach to client-approved support will likely sub-optimize the impact of dollars spent on these programs and not fully leverage the opportunity to influence advisors,” the study says, adding that, “Looking ahead, providers of client approved materials and tools should continue to focus on the simplicity, objectivity, and utility these resources offer to advisors. Advisors have incorporated impactful client-approved content and tools into how they interact and engage with investors on a regular basis, and perceive that these offerings influence how they think and behave toward various sources.”
This report is based on online survey responses in July from more than 500 advisors, across key channels including wirehouse, regional, independent and RIAs.
Here are some key takeaways from the study:
Who is using these tools the most
While 92% of advisors utilize client-approved materials and tools, Practical Perspectives found that regional and wirehouse advisors are more likely to be significant users while RIAs are far less likely than other types of advisors to use client-approved content and capabilities. Less than one in 10 RIAs indicated they were heavy users of these materials and tools, and 40% of the RIAs surveyed said they do not use them.
“While the majority of independent advisors use client-approved materials, they are more likely to be minor users compared to regional and wirehouse representatives,” the report says.
A wide range of providers were identified as offering useful client-approved support, but the most frequently listed firm was American Funds. Of the more than 175 different firms listed as leading sources of client-approved support, the runners-up were Franklin Templeton, BlackRock/iShares, JPMorgan, Jackson National, MFS, Prudential, Morningstar, PIMCO and Vanguard.
Advisors participating in the research were asked to identify the top three sources that offer the most useful client approved materials and tools which they rely on, and answers ranged from asset managers to ETF providers, insurance companies, information providers, and broker-dealers and custodians.
“The goal was to identify which firms are most prominent in this space,” the report states. “It is not intended to reflect actual market share of the providers or platforms. It is also recognized that not all providers and platforms are available to every advisor.”