Articles for Advisors

The pursuit of financial stability has long been a component of financial success among all investors.  The desire to accumulate wealth and working hard to achieve that wealth is also something that is shared amongst most investors.  Millennials have very different attitudes towards accumulation of wealth, as well as how they feel about the wealth they have accumulated than Gen X investors.

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How Occupation Influences Advisor Selection

As a business owner I have always had the feeling that I make decisions differently than other investors.  Running a company requires a mindset that never forgets people, sales, expenses, or the bottom line.  That type of thinking permeates into every aspect of my life, as I am sure it does for many other occupations.  I have friends and family that run the gamut of occupations, from senior level executives, to teachers, managers, doctors, and individuals in information technology.  They all operate in their lives and make decisions differently than I do, which may be a result of their occupation, or they chose the occupation they are in because it was uniquely suited to who they are and how they make decisions.

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Advisor Satisfaction By Generation

My neighbor and I were chatting last week about financial advisors.  She was not very impressed with the communication and performance of her advisor.  Now, we have similar financial situations and families, however she is younger than I am.  She is on the younger side of Gen X, while I am on the younger side of Baby Boomers.  Another thing that struck me about this conversation was that a few weeks prior to our conversation she had introduced someone to her advisor.

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How Women Select an Advisor

Men are from Mars, women are from Venus.  That sentiment was coined by author John Gray as the title to his book about communication between genders in relationships.  It illustrates just how different men and women are.  These differences are also evident in financial matters.  Men and women make their financial decisions for different reasons, including the selecting of a financial advisor.

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Expectations Not Always Predictable

The differences between expectations and reality are evident everywhere in life.  Individuals generally have an expectation of what they want from a relationship, a business interaction, a services provider, and many other interactions throughout life, including regarding their finances.  The expectations investors have of their advisor and wealth management services are not always what advisors would think they might be.  Spectrem Group conducted research with wealthy investors regarding what services they receive as part of their wealth management services, as well as what services they would expect to receive as part of their wealth management services.  This topic will be revisited again later this summer through our upcoming research “Wealth Management Redefined”.  This research will gain new insights into how investors have redefined what wealth management means to them in today’s world.

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Advisor Selection Criteria

I have known for many years that my children and I make decisions completely differently.  The things that I feel are important components of a decision do not even make it on my kid’s list of considerations, and vice versa.  They also interact with their finances in a different manner than I do.  Conducting business entirely online is not uncomfortable but rather embraced in my children’s generation.  When selecting a financial advisor to work with the differences are evident in my own life, as well as in Spectrem Group’s recent research report “How Advisors Can Increase Referrals and Satisfy Clients”.

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Satisfaction With Investment Performance Lagging

“The best advertising and sales are done by satisfied clients.”  That sentiment is used across industries all over the world, including in the financial industry.  Client satisfaction is something that is a key component of business success for any financial firm.  There has been a push in the industry towards ensuring a positive client experience, and ultimately a satisfied client.  Whose clients are the most satisfied?  What drives their satisfaction?

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Referrals?  Ask a Millennial

A client referral is the holy grail of prospects in the financial industry.  These referrals often close at a higher rate, and the sales cycle is shorter than that of someone without a referral.  Financial advisors are continuously looking for ways to increase referrals from their client base, but perhaps it would benefit them to focus on certain types of clients more than others.  Knowing what segment of client refers their financial advisor the most allows advisors to focus on that client segment and ensure the highest levels of satisfaction.

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When to Have Fee Discussions

At the start of a client/financial advisor relationship there is extensive paperwork that must be completed and acknowledged received, including information regarding fees.  The level of understanding of those fees, or if the client is even aware or paying attention to the forms they are signing is a completely different story.  Once that newness wears off, how often do clients want to discuss fees?  How often do they feel their financial advisor talks about fees with them?

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