What Do Clients Value in Their Investment Advisors?

According to a recent survey by the Investments & Wealth Institute, 91 percent of investment clients are somewhat or very satisfied, and 89 percent of clients are somewhat or extremely likely to continue to work with their current advisor. The vast majority of advisors are providing a high level of satisfaction with their high net worth clients. However, while those findings as positive, the research suggests that having satisfied and loyal clients isn’t enough to set the advisor apart from most other advisors available to clients. The study highlights several key capabilities that distinguish exceptional advisors from their peers.

Drivers of HNW Client Engagement, Satisfaction and Willingness to Refer

Not surprisingly, the foundational requirements of all client respondents are that their advisor is trusthworthy (87 percent rated this 5 out of 5 on importance), has high ethical standards (80 percent), always acts in my best interests (80 percent), and is knowledgeable (77 percent). Beyond these foundational capabilities, the research identifies four additional drivers that “engaged clients” rate significantly higher than all clients: taking a personalized approach, demonstrating advanced capabilities, delivering exceptional service and providing meaningful guidance (ranked by importance from lowest to highest).

“Client engagement is the key goal of every successful advisory relationships,” said Julie Littlechild, founder of and author of the research. “However, advisors must first establish a foundation of expertise and ethics, the two most important things to clients beyond the over-arching attribute of trust. The study provides actionable steps advisors can take to communicate their value and measure their success.”

HNW Clients Rank Investment Management as the Most Important Service

At the highest level, HNW clients turn to advisors to provide a range of services. When asked to rank four services in order of importance, investment management tops the list (38 percent of HNW clients rank it as most important), followed by financial planning (29 percent), wealth management (21 percent) and retirement solutions (12 percent). However, while investment management is most important, two-thirds of investors say that investment performance is just one of the things for which they pay their advisor. The top three things HNW investors say they pay their advisors for are: on-going guidance/advice to help reach their goals (90 percent), help in avoiding costly financial/investment mistakes (84 percent) and on-going monitoring of their goals (81 percent).

HNW Clients Believe in the Importance of Voluntary Designations for Their Advisors

With ethics and expertise being ranked as foundational capabilities, and “strong technical expertise” and “advanced capabilities” being ranked as differentiating factors for exceptional advisors, the value and importance of designations were explored as the primary way that advisors demonstrate all of these capabilities. Seventy-three percent of HNW clients say that designations and credentials are an important way to demonstrate technical expertise. In part this is because clients define expertise as going above and beyond the basic requirements of licensing or registration. Nearly 70 percent of HNW clients feel it is important that their advisor achieve advanced certifications or voluntary education and three-quarters of HNW client say that voluntary designations and certifications would be important to decision making if they were choosing an advisor today.

“High-net-worth clients expect their advisors to have advanced ethics and expertise to drive tangible outcomes,” said Sean Walters, CAE, chief executive officer, Investments & Wealth Institute. “This study illustrates that for high-net-worth clients, advanced capabilities mean knowledge and application of strategies and expertise they could not get from other advisors. Voluntary, advanced designations provide those capabilities.”

Communicating Ethics and Expertise: Aspects of Professional Designations That Are Most Important to Clients

Clients have low unaided awareness of all professional designations. When communicating with clients and prospects about designations, there are specific messages that are more important than others. The following were identified as the most important aspects of how an advisor obtains his or her designations.

  • My advisor would lose his/her credentials if he/she failed to meet ethics standards. (Eighty-nine percent of those surveyed said this was important.)
  • My advisor must meet ongoing standards in order to maintain his/her credentials (e.g., annual continuing education, adherence to ethical standards). (Important to 89 percent)
  • My advisor must meet ongoing standards in order to maintain his/her credentials (e.g., annual continuing education, adherence to ethical standards). (Important to 89 percent)
  • My advisor met a rigorous set of standards to be certified (e.g., ethics, experience, education examinations). (Important to 87 percent)

Drawing on the findings of the study, Investments & Wealth Institute created an online program, Exceptional Advisor Communicate Your Value and Build Client Engagement. Consisting of five modules, the program is designed to provide advisors a better understanding of what clients consider important, provide meaningful guidance, demonstrate advanced knowledge through credentials and highlight a commitment to ethics. Consisting of webinars, videos and readings, the program teaches advisors how to develop client communication and action plans. In addition the institute has developed an Exceptional Advisor Toolkit, available to members and CIMA, CPWA and RMA certificants. The toolkit provides an array of client and advisor resources.

The access the study, click here.

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