Ideal client-experience strategy still eludes advisors

Survey reveals concerns on customization along with mixed financial-market and business outlooks

Ideal client-experience strategy still eludes advisors

As 2020 rolls in, advisors are expecting changes in demographics and investor demands will continue to be the top factors shaping the industry, according to a new study by Independent Advisor Solutions by SEI. But even though they recognize those priorities, few advisors are managing to address them successfully.

“While advisors have acknowledged the need to adapt the client experience in order to survive in the future and meet evolving investor demands, our research shows the strategy to do so remains an elusive target today for most advisors,” John Anderson, head of Practice Management Solutions at Independent Advisor Solutions, said in a statement.

In an online survey of 400 independent financial advisors, SEI found that customization is a concern for many respondents. When asked how they see the client experience/process to shape up over the next five to 10 years, 32% said they will customize every client experience based on specific client needs, while 26% expect to segment their clientele by size and need, and tailor experiences and services based on those segments.

But respondents’ expectations are apparently not in line with their immediate goals. While advisors acknowledge the need to adapt their client experience based on how investors are evolving, just 14% cited improving the investor experience as their top goal for 2020. Only 11% cited refining their niche as a way to help grow their business, and just 1% saw changing how they charge fees as a top goal.

The survey also delved into expectations for the markets, finding that the largest proportion of respondents (42%) expect the next downturn in 2021, while 27% believed it would happen sooner in 2020.

The prospect of a big market correction seems to be low on the list of things keeping the polled advisors up at night, as only 20% cited it as the top worrisome factor for themselves and their clients going into 2020. But geopolitical concerns — encompassing the presidential election, impeachment, trade war, and Brexit — were cited by more than half (64%)

Focusing more narrowly on advisors’ practices and industry trends, nearly a third of advisors (32%) ranked client focus on short-term performance among the top concerns for their practice moving forward.

But despite the concerns, the survey indicated a general sense of optimism among advisors with respect to their businesses. More than six-tenths (62%) saw the ability to articulate their value-add and create new client offerings through segmentation and niche identification as a business opportunity to take advantage of over the next one to two years. Slightly fewer advisors (56%) said technology to enhance the client experience is the greatest opportunity, while 40% saw potential success from millennial investors looking for advice.

Despite perceived geopolitical and market headwinds, 45% shared a belief that it will be easier to grow their business in the next five to 10 years. Just under a fifth (18%) saw younger advisors’ use of robo or hybrid advice platforms as a business growth challenge, while only 7% cited lack of time and budgets in adopting technology as a hurdle for future business growth.


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