Top five challenges facing financial advisers around the world
By International Adviser, 14 Oct 16
Financial advisers name the challenges facing the future of their businesses, from poor market performance and a challenging regulatory environment, according to a survey by Natixis Global Asset Management, which questioned 2,550 advisers across 15 countries.
Communication is key
Research from Natixis, based on a study of 7,100 investors from 22 countries in March, found that they had ended an advisory relationship in the past 12 months mostly due to performance (41%).
After that, they say their adviser didn’t understand their goals (32%) or didn’t share their views on investing (30%), didn’t communicate frequently enough (26%), and didn’t justify their fees (26%).
From the advisers’ viewpoint, they believe these same relationship factors are even more important to retaining clients.
When asked why clients leave, 71% of advisers said an adviser’s failure to communicate frequently with clients is a major downfall.
Along similar lines, 53% said failure to listen to clients’ needs could result in lost business. Fewer than half (46%) believe failing to meet return expectations is where advisors lose clients.
Wider range of services
Advisers also reported that clients are looking for a wider range of services, including asking for help with specific investment challenges such as managing volatility (55%), tax-efficient investing strategies (36%) and strategies that don’t correlate to the broad markets (24%). But often they are looking for broader services such as estate planning and trustee services (27%) and the ever-present goals-based planning and advice (27%).
At a time when 62% of advisors believe their ability to justify their fees to clients is important to their success, managing client behaviours, meeting client expectations, and delivering more focused services will be critical.
Client education
The good news is that 64% of investors worldwide said professional advice is worth the fee, with 66% adding that investors with advisors are more likely to meet their financial goals, the survey found.
The biggest area of interest for investors is client education, with half of investors admitting they would have a better chance of achieving their long-term goals by enhancing their investment knowledge.
“When asked what they want most from a professional adviser, they put help in making more informed investment decisions at the top of the list. They also want better solutions for managing risk, help setting goals and establishing plans, and personalized advice in volatile times,” said Natixis.
Tags: Natixis
