What You Need to Know
- Clients want their financial advisors to be transparent in all interactions.
- They want them to take the time to understand their needs, goals and risk tolerance.
- They want advisors to monitor their portfolios and let them know about potential problems and opportunities.
What do potential clients value most when looking to hire a financial advisor?
Cerulli Associates, in conjunction with Phoenix Marketing International, surveyed more than 11,000 households with investable assets ranging from $100,000 to more than $5 million throughout 2020, and found, for clients at most asset levels, that more than half the respondents rated transparency in interactions and time to understand their needs, goals and risk tolerance the most important factors when choosing an advisor.
The third most important factor they identified: monitoring portfolios and letting clients know about potential problems and opportunities. That was important to 49% of respondents overall, but when asked to rate who had the highest level of investment expertise to run portfolios, just 29% of respondents identified their financial advisor. Thirty-eight percent named a dedicated investment team at their advisory firm.
Few respondents — 11% or less — considered more personal attributes such as an advisor having the same gender, background or experiences as important when choosing an advisor. In addition, few respondents (20%) considered cutting-edge technology in an advisor’s practice an important consideration.
“Clients have come to realize that their advisors cannot be experts in every aspect of managing their financial lives and that a team approach actually benefits them, while at the same time highly appreciating the personalization intrinsic to an advisor relationship,” according to the Cerulli report.