What Clients Want, and What Advisors Think They Want

If financial advisors want to act in the best interest of their clients, they first need to know what those interests are, but that’s not necessarily what happens. A new survey from Investing Media Solutions reveals several disconnects between what advisors think are the primary concerns and goals of their clients and what their clients actually believe.

For example, the number one investment priority for 74% of asset managers surveyed — roughly three-quarters are financial advisors; the rest work in insurance, institutional investing or commercial banking — is wealth preservation and risk management, but for their clients it’s growth (a priority for 54% of the affluent investors surveyed).

Only 51% of affluent investors said wealth preservation and risk management was their main investing objective.

“Advisors need to listen better to know how their clients are prioritizing objectives. … If they’re going to win over new clients maybe the message is they can’t be too conservative in their approach,” said Jeff Tripp, a partner at IMS.

The survey was completed by 5,865 individuals — split almost evenly between those working in financial services and affluent investors.

Another interesting disconnect revealed in the study concerned robo-advisors. About half of retail investors surveyed were aware of the term robo-advisor, up from 16% a year ago, and about 18% of them said they were considering adding a robo account by the end of this year, up from 13% in the fourth quarter of 2016, while 82% had no plans to do so.

In contrast, only 11% of advisors thought their clients were using a robo or interested in adding one to their account and 68% thought their clients weren’t doing either.  Most surprising, said Tripp, approximately 21% didn’t know their clients’ use or views on robos. “How can they not know?” said Tripp. “They haven’t asked.”