Articles for Advisors

Why Some Investors Do Not Use an Advisor

The reasons why an investor would NOT have an advisor are just as varied as the reasons why investors use an advisor.  For investors who are not certain if they want to use an advisor or not it can be helpful to know why other investors have decided to avoid hiring an advisor.  Spectrem Group sought out this information in our most recent research.

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Your Advisor Left Their Firm, Now What?

Receiving the phone call that alerts you to the fact that your financial advisor has left their firm often creates uncertainty among investors.  If the financial advisor decided to move to another firm, you have decisions to make.  Do you stay with the firm or go with your advisor?  Why do investors who choose to stay with the firm make that choice?  Thinking about what you may do in the event of your financial advisor switching firms can help prepare you in the event that this happens.

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Services Clients Value

Albert Einstein once famously said “Strive not to be a success, but rather to be of value”.  This sentiment is true in life, but also true in a financial advisor/client relationship.  The financial advisor needs to provide value to their clients, and that value is determined by the client.  Regardless of how many services or traits an advisor has that they feel is valuable, it is only beneficial if the client or prospect sees the value.  

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Most Important Variables When Hiring An Advisor

How someone makes a decision is as unique as a fingerprint.  Each person weighs different priorities to come to a conclusion they are comfortable with.  Selecting a financial advisor is no different.  Investors must determine what traits are most important to them in an advisor, and what they are looking for from that relationship.  Investors may value the advisor having a positive track record, while others may want an advisor who has very friendly staff members.

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Are You Charging Enough?

Firms have been trying for many years to identify what is a reasonable fee for various types of investors and wealth levels.  This dilemma has a significant impact on revenues and profitability, making it a key topic of discussion within financial firms.  Do wealthy investors feel their fees are fair?  Would they be willing to pay more?  Spectrem Group sought out answers to these questions and more in their recent research with wealthy investors regarding the fees they pay to their financial provider.

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Millennials Are Skeptical of Financial Advisors

The Millennial generation makes up more than a quarter of the U.S. population according to the U.S. census, and they are inheriting and accumulating wealth, which makes them an ideal prospect for many financial professionals.  Financial providers with a focus on Millennials need to be aware of how Millennials perceive financial professionals, so Spectrem Group recently conducted research to gain insights into how Millennials perceive financial advisors, the types of advisors they have chosen to work with, as well as why some Millennials are not currently working with an advisor.

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Reg BI Communication Gaps

Regulation Best Interest (Reg BI) was approved by the SEC in early summer of 2019, and as of summer of 2020 all registered broker-dealers had to comply with what is required in Reg BI.  Many investors may have had other topics on their mind in the summer of 2020 (global pandemic) so the communication an investor was aware of as a result of Reg BI and regarding Reg BI had the potential to be impacted by those other events.  Spectrem Group conducted research recently with wealthy investors to understand what types of communication the investor recalls receiving from their advisor.

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Communication Preferences of 2021

Generation X grew up with pay phones, pagers, hard-copy mail, and dial-up internet.  This generation entered the workforce and learned basic computer software and the era of mainstream electronic communication began.  Millennials were immediately immersed in technology, with cellphones, texting, and emails being commonplace.  The differences in these generations from previous generations is often their preferences in communication.  Financial professionals that work with Gen X or Millennial clients and prospects need to be aware that the previous approach of a phone call may not be the preferred method of communication.  To maximize communication success, providers and advisors should do what they can to meet the client and prospect on the communication platform they prefer.

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Customer or client service is something that is expected.  That baseline of expectations varies significantly by industry and client type.  Within the financial industry customer experience has been a hot button topic for many years.  One of the most basic tenants of customer experience is the service they receive.  Before a financial provider can evaluate if they are meeting the service expectations of their clients, they must first understand what those expectations are.  The expectations of investors by various wealth levels is an ideal place to begin the understanding, as those investors at lower levels of wealth have expectations that far exceed their wealthier counterparts in some areas, and lower expectations in others.

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Changing Investment Risk Levels - Danger?

While wealthier investors are generally more willing to take investment risk than those with less wealth, the current levels of risk that the wealthiest investors are willing to assume may be somewhat dangerous should the economy take a dramatic tumble.  Yet the wealthiest investors in 2021 are taking advantage of the historic and robust markets and have shed any concerns about the future of many of their investments.

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