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How Advisors Use Educational Tools for Their Clients

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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.

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.

Top providers

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.”

American Funds was top ranked within the regional and independent channels for client-approved resources, with JPMorgan and Franklin Templeton also prominent in these channels.

The top-rated provider in the wirehouse channel was BlackRock/iShares, with Wells Fargo and American Funds also used heavily. Among RIAs, Vanguard and Dimensional Fund Advisors are highly rated asset managers. Morningstar is rated highly by advisors in the RIA, independent, and regional channels.

Most common formats

Printed materials and downloadable content are the most popular formats of client-approved support among all advisors. Each of these types of materials is used by more than 7 in 10 advisors, and nearly 1 in 3 advisors said they use these formats heavily. The formats that advisors said they are the least likely to use included DVDs/CDs, video or audio formats, social media and other types of digital media.

“Printed hard-copy pieces and downloadable content are the formats most heavily used by wirehouse, regional and independent advisors,” the study says. “RIAs are far less likely to use any formats, but have highest use of software and technology tools and online tools.”

How much impact do these tools have?

Most advisors see client-approved resources as having a modest impact on their practice, according to the study. While 77% of the advisors perceive client-approved resources as having an impact on prospects and clients, more than 40% view that impact as modest, 32% view the impact as minor an additional 6% suggest these resources have no impact.

Top challenges advisors face in using client-approved support

The study found that the main problems advisors have with client-approved support include content not being updated regularly or being dated, content and capability that are too complex or overwhelming to clients, and materials and tools that are not objective or reflect a particular bias.

How to improve satisfaction

The most desired changes relate to simpler, more understandable materials. Nearly 2 in 3 advisors suggested shorter pieces that summarize key issues or topics, and more than half of the advisors would like simpler materials and tools that are more understood by clients. Other changes suggested by 4 in 10 advisors include greater use of visual elements to illustrate key points, more support that can be used interactively with clients, more flexibility to tailor materials or tools to clients, less focus on proprietary products or solutions, and more relevant topics.

The most important topics to advisors

Most advisors rely on client-approved materials and tools that are educational in nature. Topics that were listed as more important for advisors included generating income in retirement, educating clients on retirement issues and risks, building assets for retirement, managing client fears and anxieties related to the financial markets, and rolling over assets from an employer retirement plan. Topics of relatively less importance to advisors are investing in ETFs, alternative investments, and investing outside the U.S.

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