While most independent financial advisers value product expertise, investment research and marketing support from product providers, including insurers, they don’t have time to use these services, according to a recent survey from Curian Capital LLC.
Curian conducted the survey of 1,300 independent financial advisers to gauge how market volatility and the economic climate have impacted their perceptions in four main areas: economic outlook, product selection and investment strategies, business development, and platforms and providers.
According to the survey, 62% of advisers say that improving efficiency and overall time management is a major goal for the coming year, and carriers can assist advisers in this goal.
“Insurers looking to help advisers more efficiently manage their time and work need to do two things,” Mark Schoenbeck, SVP and chief marketing officer for Curian told INN. “First, they need to provide relevant technology and tools that are helpful in boosting productivity. Second, they need to offer the training, incentives and accountability necessary to get advisers to adopt these resources and change their behavior.”
Advisers’ clients are requesting products with guaranteed income features to help address the possibility that they will not be able to generate enough income in retirement, Curian says. Advisers are also seeing a demand for alternative investments and portfolio strategies such as tactical asset allocation. To respond to these demands, advisers want providers to offer a broad range of options that can help advisers address concerns about volatility and longevity. The functionality of wealth management platforms will also be key.
According to the survey, 74% of advisers say the ability to view all of a client’s holdings on a single platform is very important, while 68% want a platform that supports multiple product types and investment options.
“Our survey reveals that advisers value tools and resources that can help support the marketing and development of their businesses, but in many cases they aren’t able to take advantage of them,” Schoenbeck says. “Providers will need to focus on ensuring that their support programs are practical, relevant and easily accessible, so advisers can quickly and efficiently grow their businesses.”
Other findings from the survey include:
• Advisers’ economic outlook is split nearly evenly—42% believe the recession is over and 46% believe it is not over
• The recent rise in the equity markets is not enough to impact clients’ risk tolerance; 88% of respondents say their clients’ risk tolerance is either lower or unchanged compared to a year ago
• More than two-thirds of advisers believe inflation is a growing concern that will begin to impact portfolio construction within the next two years
• 43% of advisers feel that not generating enough income to last through retirement is the biggest threat to their clients’ retirement plans, and report that only 36% of their clients feel the same. 37% of advisers say the majority of their clients are even more concerned about market volatility. However, only 16% of advisers share this sentiment.
• More than two-thirds of advisers say their clients are requesting more conservative investments and guaranteed income features, while 44% say clients are requesting a tactical asset allocation approach
• 79% of advisers indicate they use between two and four different investment strategies in each client portfolio
• 81% of respondents will focus on acquiring more affluent clients in 2011 and 59% plan to market their business more aggressively
“The findings from our latest survey bring to light two key themes—clients are still apprehensive about investment risk and their retirement preparedness, and advisers continue to struggle with managing their time and resources effectively,” says Chris Rosato, SVP of strategic development for Curian. “Taken together, these two points speak to the need for both a broader range of investment solutions, and a platform that can help advisers manage those solutions for multiple clients in the most efficient way possible. If providers can make a real difference in the way advisers operate their business on a daily basis, clients will reap the benefits by getting the time and individual attention they need.”
Nearly half of advisers report time management and efficiency as their biggest challenge, well ahead of maintaining client service levels or keeping up with regulatory changes.
While the need for practice management support is clear, the majority of advisers say that they don’t have time to utilize the programs offered by product providers, the programs are not relevant, and the delivery of the programs is ineffective.”
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