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.