Jefferson National Study Profiles Investors and Financial Advisors

Advisor Profiles

The study identified three prevailing advisor profiles. Thirty-six percent are tactical managers leaning toward active investing strategy and low-touch engagement. Eighteen percent have more than $250 million in assets under management.

Fifty-nine percent said Gen X clients would be their primary target over the next 12 months. A quarter said their top strategy to attract new clients was social media.

Most think volatility will increase, and three-quarters feel pressure to revise their strategy in response. A similar proportion are confident that robos can manage volatility.

Twenty-two percent of advisors profiled follow an active investing strategy and seek high-touch engagement. Active advisors manage more than $250 million in assets.

Forty-eight percent say Gen X clients will be the primary target over the next 12 months, and 46% will seek to attract new clients through social media.

Three-quarters think volatility will increase, and two-thirds feel pressure to revise their strategy. However, only 46% are confident that robos can manage volatility.

Relationship builders, 36% of advisors who were profiled, follow a passive investing strategy and seek high-touch engagement. Only 8% of these have more than $250 million under management.

Forty-eight percent say boomer clients will be the primary target over the next 12 months, and 46% say their top strategy to attract new clients is working with clients’ family and children.

Two-thirds think volatility will increase, but only 44% feel pressure to revise their strategy. A mere 19% are confident that robos can manage volatility.

Alignment of Interests

According to Franklin National, the study found strong alignment between certain investor and advisor profiles. It cited these examples:

• Return seekers and tactical manager advisors tend to anticipate an increase in volatility, are likely to revise their strategy in response and are more confident in robo advisors
• Relationship seekers and relationship builder advisors tend to be more concerned about low returns on investment, less likely to respond to volatility and less confident in robo advisors

“As the data clearly shows, both advisors and investors can be profiled by their shared preferences and characteristics,” Jefferson National’s president Laurence Greenberg said in a statement. 

Jefferson National said industry studies show that the key to growth and sustainability relies on an advisor’s ability to clearly understand and align with their clients’ needs. The recent RIA benchmarking study from Charles Schwab finds that the advisor-client relationship is critical to driving growth, especially in challenging markets.

According to a 2016 study by E&Y, a $175 billion to $200 billion revenue opportunity exists for the advisory firms that focus on aligning with clients and using client experience as a competitive advantage.