Financial advisors are under increasing pressure to offer more services to clients. But a new survey shows most clients are using only a select few of those services.
Retirement income and accumulation planning are the most popular services that financial advisors offer their affluent clients, according to new research that Cerulli Associates released this week.
But these are just two of the array of offerings they put on display to attract long-term clients. Advisors across all channels offer an average of 6.1 of 11 financial planning services that Cerulli presented to survey participants. Retail investors reported that they use an average of slightly fewer than three of those 11 services with their current financial providers.
Although retirement-focused advice ranks highest among the services that clients said they use, other services reveal a significant gap between the advisor-reported offerings and client-reported use.
For instance, 67% of advisors offer insurance services, but just 17% of retail investors rely on their primary provider for them. Likewise with tax planning: 47% of advisors offer it, but only 14% of retail investors use this service through their primary provider.
Do Clients Know What's Available?
Advisors can leverage the diversity of services they offer clients, Cerulli said, as a competitive advantage in advisor-client relationships
According to John McKenna, a Cerulli research analyst, advisors may already offer these services as a core offering within client portfolios but are not effectively communicating this.
“As our past research has shown,” McKenna said, “satisfied clients are the most willing to say the value of the advice they receive from their advisor is worth the expense, but competitive positioning relies on knowing that their advisor is doing more than just focusing on returns and collecting fees.”
This requires advisors to proactively communicate with clients and understand their goals within the financial relationship. In-depth discovery meetings can help determine a client's complete financial picture, as well as where and how the client manages non-investable assets.
“By demonstrating key competitive positioning of specific services while also remaining sensitive to client preferences for existing partners and discretion over how much information they feel comfortable sharing, advisors can showcase the full range of their service offerings — both financial and nonfinancial,” McKenna said.
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