Collaboration is key to successful client-advisor relationship survey finds
Automation and digitalization are the biggest transformers in modern life but it seems some traditional things are here to stay; including financial advisors working with clients.
A newly-released survey of investors in the US shows that the client-advisor relationship is strong and that it’s not likely to disappear any time soon despite the burgeoning fintech sector and robo-advisors.
“Financial advisors remain a vital source of advice for most investors,” said Wayne Badorf, head of Intermediary Distribution at Wells Fargo Asset Management. “People want advice and ‘the human touch’ when planning their financial futures. At the same time, they are prepared to embrace technology as part of the process; it’s not an either-or scenario. Financial advisors and technology can work together to help investors reach their saving and retirement goals.”
The first quarter 2019 Wells Fargo/Gallup Investor and Retirement Optimism Index survey shows that 56% of investors work with a financial advisor – and among those that don’t, 22% would like to.
Almost three quarters of respondents said that the fees they pay to their FAs are worth it because of the financial benefits that the relationship brings.
Almost 7 in 10 investors said that an FA’s role in answering questions is the thing they value the most.
Other things they value about their advisor is “keeping me motivated and on track with my financial goals” (69%), “understanding my personal life and family dynamics” (63%), helping clarify broader life values and goals (55%) and including teenage or older children in financial planning discussions (53%).
Collaboration is vital with 68% of respondents saying that they like the FA to handle the investments in close consultation with them.
Just 14% said they want to invest on their own with only investment-related advice from their advisor, and 18% said they want the advisor to take care of investing decisions on their behalf, with no consultation at all.
While only 24% of investors said they currently use automated investing technology for their own investing, 56% said they would be prefer working with an FA who used automated investment tools on their behalf.
Those who work with an advisor said the FA understands their investment needs, cares about them and their financial wellbeing, and helps them feel more confident about their finances.
Of those who do not use an advisor, cost is the main reason (73%) followed by 52% who would rather purchase index funds or automated investments directly and 40% said they can invest better on their own.
Investors also say they want to communicate with their advisor on a regular basis — on average, three times a year.
When asked how they want to communicate, 63% said say they prefer a personal connection, including in-person meetings (39%), phone calls (22%) or video calls (2%).
Just 20% said they prefer to connect through internet chat, and only 18% want to review their investments on their own, without help from an advisor.