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.
When Spectrem conducted this research initially, we found a significant gap between what was expected and what services were actually received. Investment management is the only service that was provided at nearly the level as expected, with 95 percent of wealthy investors expecting that service and 88 percent receiving that service.
Ninety-six percent of investors expect to receive financial planning as part of their wealth management services, yet only 70 percent are receiving that service. Ninety-six percent of investors also expect to receive wealth transfer advice, while less than a quarter of investors are receiving those services. Trust services are another area that a huge gap exists between those that expect that service (94 percent) and those who receive that service (10 percent). This demonstrates that investors are looking for their financial advisor to provide these services through the wealth management process, despite the fact that very few investors are actually receiving the service.
These gaps exist in many other areas of wealth management, including long-term care insurance advice, tax planning, estate planning, non-liquid asset management, and many others. Financial professionals need to understand what investors expect from wealth management, and how those expectations have evolved over time, which Spectrem Group will be examining in the upcoming months and will release through our report “Wealth Management Redefined”.