Clients’ trust in and satisfaction with their financial professional increases when both parties willingly broaden their conversations and engage in a more transparent, holistic approach to financial and future planning, according to a new study from AIG Life & Retirement and the MIT AgeLab.

This approach requires moving beyond traditional concerns about financial advice and engaging on topics that are top of mind for clients, the research showed.

Study participants who reported the most satisfaction with their financial professional said they had discussed these topics with them:

  • Future goals and aspirations: 85%
  • Job transitions, new careers or retirement: 77%
  • Potential expenses for their own care: 72%
  • Their family members’ finances: 62%

The report said that having conversations about these topics and drawing on available resources to provide information and insight can help deepen advisors’ relationships with clients and identify issues that may affect a client’s future.

“While portfolio performance, good service and financial expertise remain important drivers of satisfaction, clients are increasingly looking to have more meaningful conversations with their financial advisors,” Kevin Hogan, chief executive of AIG Life & Retirement, said in a statement.

“We recognize that financial advisors cannot be experts on all topics; however, they have an opportunity to help clients identify areas of concern and act as a ‘resource connector,’ using a broader network to help clients find the right expertise and services to address their needs.”

The MIT AgeLab conducted a national survey in March among 2,038 participants ages 30 to 75 who regularly worked with a financial professional. Respondents reported yearly household income of $50,000 or more and total savings of $50,000 or more, including savings accounts, checking accounts and investment or retirement accounts. About three in five worked full time, and a quarter were retired.

Broadening Client Conversations

The survey identified topics related to identity theft and fraud as an emerging area of concern for financial clients, especially older ones who said it was a big source of worry but only 30% of whom had had a related conversation with their advisor.

Nearly all clients who said they had had this conversation were willing to continue it, while 80% of those who had not were open to doing so.

Physical health was another top-of-mind topic for most clients in the survey; however, 57% said they had not discussed it with their advisor.

Respondents in the 30-to-45 age group were likelier to have discussed physical health with their financial professional, with 78% saying they would like to do so again. Three in five clients 46 to 70 who had not discussed the topic said they either wanted to or were willing to do so if the topic came up.

Fifty-three percent of respondents across all age groups said potential expenses for their own care was the health and security topic they most wanted to broach for the first time with their advisor.

Across all four health- and security‐related topics surveyed, clients were most eager to revisit housing, according to the survey. This was especially true of younger clients, 88% of whom said they wanted to return to the topic.

Among those who had not yet discussed their current housing situation with their advisor, 79% said they wanted or were willing to have an initial conversation, rising to 92% among the youngest clients.

Besides discussing their own finances, 58% of study participants said they had discussed family and loved ones’ finances with their financial professional, including 72% of those 30 to 45.

In addition, 82% percent of younger clients said they expected their financial professional to continue to advise them on this topic, as did 74% of middle-aged clients and 54% of older ones.

This points to the importance for financial advisors to include the topic of family and loved ones’ finances in ongoing conversations with clients of all ages, the report said.

Along with physical health, respondents said they were most concerned with financial planning for retirement. While 92% of respondents said they had already discussed retirement with a financial professional, 85% said they wanted to pursue the topic.

Two-thirds of those who had yet to discuss their financial plan for retirement said they wanted to do so, reinforcing the point that retirement planning remains a crucial part of the conversation, according to the report.

‘Ideal’ Financial Professional

The study also explored factors beyond financial performance that lead to client satisfaction.

The top driver for middle‐aged and older clients, and the second most important one for younger clients, was the advisor’s understanding of their financial and life goals.

“The future of advice is at a crossroads,” MIT AgeLab’s director Joseph Coughlin said in the statement. “While robo-advice — or advice by algorithm — brings efficiency, technology alone cannot replicate the full value proposition of a highly engaged advisor.

“Trusted, successful financial transactions are only part of the story. The balance comes from the more personal, ‘softer’ aspects of the relationship — and relationships, boiled down, consist of conversations.”

Personal connections make a difference. Asked what role an ideal financial professional should play, 54% of respondents said “helping me plan for the future.”

Forty percent of younger clients said they saw their ideal advisor as a life coach, and 35% considered their advisor a friend. Fifty-three percent said their financial professional’s network was a key driver of satisfaction, and 48% cited their advisor’s personality.

The survey found that most clients were satisfied with their current financial professional, but 19% said they could part ways. The top two reasons for leaving an advisor, each mentioned by nearly half of respondents, related to portfolio performance and service.

But the other two reasons for leaving, mentioned by about a quarter of respondents, were unrelated to financial matters or service concerns: relocation and lack of personal connection.

The report said that with more clients becoming used to virtual meetings, relocation could become a lesser concern for financial professionals who were prepared to make a virtual relationship easier for clients.

“Even in a high-tech world, people still want someone to talk to, someone to explain complex financial concepts, and someone to understand them as unique individuals,” Hogan said.

“As people move through different life stages, they’re not looking to be stereotyped; they’re seeking someone who truly understands them and will work with them to identify their specific financial and life needs, rather than placing them in a demographic or a pre-programmed investing profile.”

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