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Most Advisors Steered Clients Away From Selling at Market’s Bottom: Survey

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Four in five financial professionals in a new survey by Incapital said their clients had been calling more often since the market upheaval in March, and nearly all said clients had shown confidence and patience by not changing investments.

But that was not without some effort by advisors. Fifty-eight percent of survey respondents said they had to persuade clients not to sell at the market’s bottom.

In fact, 67% of financial professionals said their clients were more concerned with short-term market gyrations than having enough money in retirement, and 97% said clients were concerned about the Nov. 3 election and its effect on their investments.

That may explain why the vast majority of advisors also said their clients would give up a portion of market upside for downside protection, Incapital noted.

Related: 7 in 10 Global Investors Want to Adjust Portfolios Ahead of U.S. Election: UBS

“Since March, uncertainty has reigned over our lives and over the markets,” Chris Mee, Incapital’s head of wealth management solutions distribution, said in a statement. “It’s no wonder clients have been calling their advisors more frequently for guidance.”

The survey was conducted online via Qualtrics by Red Zone Marketing in mid-September among 752 including wealth managers, fiduciaries, financial planners and brokers from more than 50 broker-dealers and RIAs.

Revenue Growth Expected in 2020 

Eighty-three percent of financial professionals surveyed said they expected revenue growth in 2020, up from 75% surveyed by Incapital in June. And 11% expected revenue growth of 30% or more, up from 7% in the June survey.

The percentage who said they would serve more households in 2020 than they did in 2019 also went up from 38% in June to 47% in September.

“Helping their clients stay the course with investments that meet their risk tolerance is what makes advisors so valuable, especially during periods of intense volatility and uncertainty, like today,” Mee said.

“In fact, it’s times like this when smart investors seek professional guidance, which would explain why more advisors are seeing growth in both revenue and total clients served.”

Related: More Investors Turn to Financial Advisors During Pandemic

Although financial professionals may be achieving greater growth, more are doing it from home than expected, according to Incapital.

The number who said they would not return to office until 2021 rose from 17% in June to 42% in September. Only 32% said their primary way to meet with clients for the remainder of 2020 was in person.

The percentage of advisors who were optimistic about hosting live, in-person events in 2020 has plummeted, dropping from 47% in June to just 19% in September.

Although returning to the office is on hold from many financial professionals, 71% in the new survey said their firms had a written plan for doing so, up from 49% who said this in June.

When staff do return to the office, they will find that safety measures are taken much more seriously than they were earlier in the pandemic:

  • Hand sanitizer – 81% in September versus 25% in June
  • Face masks required – 70% versus 17%
  • Spacing out appointments – 60% versus 19%

Success and Challenges 

This year has been one of marketing innovation, adaptation and ingenuity for financial professionals, according to the survey. Many have adopted a wide variety of new marketing approaches that have brought in new clients.

The most successful strategies have been referrals without asking, asking for referrals from clients and strategic alliances, email campaigns and virtual educational seminars.

Financial professionals themselves are also concerned about uncertainty, the survey found. As in June, they said their biggest barrier to success was repeated shutdowns brought on by resurgence of the coronavirus.

Other barriers to success, they said, were volatile markets, social and physical distancing requirements and competition from robo-advisors.

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