By Jeff Sanford
A new wealth management suggests a key trend in the advisor industry right now is the shift in investment outlook from “defensive” to “offensive."
According to the report: "After years of focusing on wealth preservation, portfolio performance is back on the top of the advisor agenda. Investors are now looking at what will drive future wealth, and how advisors will help them achieve their broader financial goals," says Gregory Smith, partner and Canadian leader of EY's Wealth Management practice.
The survey also found that Canadian advisors are focused on generational wealth transfer; Canadians put more stock in the reputation of the individual advisor, less emphasis on firm reputation (as compared to the U.S.); Canadians still value traditional face-to-face interaction with advisors, are less likely to conduct transactions digitally than their U.S. counterparts.
Also mentioned in the report: Clients and advisors suggest “holistic goal planning and wealth transfer” as a relevant trend. "Holistic goal planning has a fairly limited impact on client acquisition and retention, yet it’s the most important trend influencing clients’ decisions to seek out wealth management firms," according to the authors.
Nevertheless, “Managers have yet to implement effective strategies to capitalize on these trends."
The report goes on to suggest advisors tend to overestimate the importance of their relationships with clients, and that they "underestimate the relevance of firm reputation." As well, advisors also need to understand the subtle but relevant differences between boomers and next-generation clients, and offer demographic appropriate solutions.
When it comes to social media advisors are not doing well: "...there's been a lot of emphasis in the financial sector about how to win clients through social media. But our research indicates the reality is a lot of these strategies are not having the desired impact." According to the report: 40% of financial advisors say they interact with clients via social media, but only 7% of clients say this is the case.
In terms of infrastructure, “Clients [will] continue to interact with wealth managers through traditional channels." This will continue “for three to five years" at least.