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Retirement Planning > Retirement Investing

Here’s What Really Leads to Satisfied Clients: Carson Study

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Although fees are an important part of the conversation between financial advisor and client, a holistic menu of services and a focus on financial planning are stronger indicators of value for top advisors, according to a study released Wednesday by Carson Coaching, a financial advisor coaching and resource program.

The study found that clients who believe their financial advisors provide more services and lead with planning are consistently more confident about their own retirement, and are likelier to be highly satisfied with their advisor and to believe they receive adequate value for the fee they pay.

However, many advisors in the study were not exhibiting the levels of planning and transparency that clients said provided value for cost.

“With a notable uptick in individuals reaching out to financial advisors for the first time in their lives due to the coronavirus and market upheaval, there’s no better time for advisors to reexamine and adjust their value proposition and how they engage with clients,” Jamie Hopkins, managing director of Carson Coaching, said in a statement.

Hopkins said some of the study’s data challenged what he viewed as industry best practices. For example, value was strongly correlated with the number of interactions between an advisor and a client.

Hopkins noted that many of these interactions have had to shift to phone and videoconferencing because of social distancing efforts to combat the spread of COVID-19, indicating that in times of uncertainty human connection is critically important.

“The traditional once or twice a year reach out is simply not enough for most clients,” he said.

Carson Group conducted and analyzed surveys in December among 129 advisors and more than 1,000 investors with at least $100,000 in investable assets. 

Key Findings

Ninety-four percent of respondents who said they knew how their advisor was compensated felt they received adequate value, compared with only 82% who did not have that transparency.

The survey results showed that conversation around compensation increased with wealth. Three in five respondents with more than $1 million in investable assets said knowing their advisor’s compensation model was extremely important, versus half of those with $100,000 to $299,000 in investable assets.

The study also found that straightforward language was important in communicating with clients. Many respondents were not clear on the meaning of “fiduciary,” and were likelier to understand when their advisor used common vernacular, such as acting in their “best interest.”

Long-term care and estate planning are often the last planning topics covered between an advisor and client, yet 61% of respondents with an estate plan in place reported high confidence about retirement and 74% expressed high satisfaction with their advisor.

Moreover, 65% of clients who said they had received a formal written plan from their advisor felt highly confident about retirement, compared with 54% without a written plan.

“The research shows that advisors should lead with planning if they want more satisfied clients, and they should document those plans meticulously and communicate them thoughtfully and often,” Hopkins said.

“The new best practices uncovered in our study will be critical as advisors seek to reinvent their value and guide their clients forward in 2020 and beyond.”

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