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New Research Finds Enhanced Expertise Key to Investor Satisfaction

Issue date: Tuesday, November 14, 2017

Contact Information: Greta Gloven | 303-850-3079 | Contact Email: ggloven@i-w.org

New Research Finds Enhanced Expertise Key to Investor Satisfaction

High-net-worth investors laser-focused on outcomes and standards

The Investments & Wealth InstituteTM (formerly IMCA) released research findings today from their latest study, “Investments & Wealth Client Research 2017,” exploring how advisors can stand out when high satisfaction and loyalty do not set them apart. The study also examines if and how advanced, voluntary designations or credentials supported meaningful differentiation among advisors.

The research, fielded by AbsoluteEngagement.com, gathered input from 585 mass-affluent and high-net-worth (HNW) investors across the United States in August 2017. The sample specifically targeted investors with at least $500,000 in investable assets who work with a financial advisor (across all channels) and make or contribute to financial decision-making in the household. 

According to the survey, investors prioritize qualitative factors indicative of client-centric service when evaluating their advisors: Eighty percent of respondents rate ethical standards as a critically important consideration, followed by trustworthiness (80 percent) and knowledge (77 percent). On these matters, clients are relatively satisfied, with 75 percent reporting satisfaction with their advisor’s ethics, 77 percent with their advisor’s trustworthiness and 73 percent with their advisor’s knowledgeability.

On more technical, quantifiable measures tied to investment management, however, investors are seeking more from their advisors. Three-quarters say that long-term investment returns are important to them, but only 60 percent report satisfaction. Other gaps can be found in value relative to fees (67 percent say it’s important; 53 percent are satisfied), as well as levels of risk in the investor’s portfolio (77 percent say it’s important; 67 percent are satisfied).

Clients place greatest value on investment management expertise.

When asked what they are paying their advisor to do for them, clients listed investment management (59 percent), followed by financial planning (46 percent), wealth management (36 percent) and retirement solutions (35 percent). The responses were mirrored when clients were asked to rank the importance of these four types of support/services provided.

“Practitioners who blindly rely on their firm’s model portfolios, outsourced asset allocation or new technologies substituting for their own investment knowledge and competence do so at their own peril,” said Sean Walters, CAE, chief executive officer, Investments & Wealth Institute. “Clients expect expertise at higher levels than ever, and in order to close the satisfaction gap, advisors must identify ways they can bolster their knowledge to drive tangible outcomes.”
“Knowledge is the key that unlocks engagement,” said Julie Littlechild, founder of AbsoluteEngagement.com. “The more investors know and understand, the more they can be active participants in their wealth management strategies, have realistic expectations about their portfolio’s performance, and truly collaborate with their advisor to get the best results possible.”
High net worth clients believe in the importance of advanced voluntary standards for their advisors.

One way advisors may be able to close this gap between expectations and results for their clients is the pursuit of advanced education beyond what is legally required. The survey found that mass-affluent and HNW investors look for their advisors to obtain voluntary standards, with 62 percent of  respondents saying it was somewhat (38 percent) or very (24 percent) important that their advisor hold these designations. In terms of what aspects of credentialing were of critical importance to investors, three characteristics rose to the top, with respondents rating the following as somewhat or very important:
  • Knowing their advisor would lose their credentials if they failed to meet ethical standards (88 percent).
  • Knowing their advisor had met a rigorous set of standards (e.g., ethics, experience, education, examinations) to be certified (86 percent).
  • Knowing their advisor had met ongoing standards (e.g., annual continuing education) in order to maintain his/her credentials (86 percent).

Communication provides a missing link.
In addition to the value HNW investors place on advanced education and standards, they also want to better understand what these designations entail and how they directly benefit from them. Fifty-four percent indicate that they would like more information about which designations/credentials their advisor holds, as well as what they mean. 
When advisors shared information about their designations with prospective clients, 66 percent of investors say that it influenced their decision to work together. 

The Investments & Wealth Institute is developing a program to help members to communicate with clients through the right message, at the right time and with the right amount of depth.  The program draws on in-depth information gathered in this study and will be formally unveiled at the Investments & Wealth Annual Conference–ACE Nashville on May 7-10, 2018.

To access the study yourself, click here.

For additional information:
For information about Institute’s CIMA or CPWA certifications, or “High Net Worth Investor Insights 2017,” contact Greta Gloven, ggloven@i-w.org or (303) 850-3079.

About the Investments & Wealth Institute
Established in 1985, the Investments & Wealth Institute, formerly known as IMCA, is a professional association, advanced education provider, and standards body for financial advisors, investment consultants, and wealth managers who embrace excellence and ethics. Through its publications, events, assessment-based certificate programs, and advanced certifications, the Institute delivers premier-quality, practical education to advanced practitioners in more than 38 countries.

The Certified Investment Management Analyst® (CIMA®) certification is the peak international, technical portfolio construction program for investment consultants, analysts, financial advisors and wealth management professionals. The CIMA program is distinctive as one of only a few global certifications in financial services to meet international accreditation and quality standards (ANSI/ISO 17024) for personnel certification programs. The Certified Private Wealth Advisor® (CPWA®) certification is an advanced professional certification for advisors who serve high-net-worth clients. It’s designed for seasoned professionals who seek the latest, most advanced knowledge and techniques to address the sophisticated needs of clients with a minimum net worth of $5 million. Unlike credentials that focus specifically on investing or financial planning, the CPWA program takes a holistic and multidisciplinary approach.

The Investments & Wealth InstituteTM, IMCA®, Investment Management Consultants Association®, CIMA®, Certified Investment Management Analyst®, CIMC®, Certified Investment Management ConsultantSM, CPWA®, Certified Private Wealth Advisor®, RMASM, and Retirement Management AdvisorSM are trademarks of Investment Management Consultants Association Inc. doing business as The Investments & Wealth Institute. The Investments & Wealth Institute does not discriminate in educational opportunities or any other characteristic protected by law.

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