Study of Canadian and U.S. investors shows that advanced knowledge, professionalism, guidance, and ethics top the list of clients’ expectations of advisors.
DENVER (April 18, 2018) – The Investments & Wealth Institute® (formerly IMCA) released research findings today from their latest study, “Canadian Investor Research,” 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, conducted by AbsoluteEngagement, on behalf of the Investments & Wealth Institute, and sponsored by Capital Group, gathered input from 444 Canadian investors and 585 U.S. investors 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 with the highest consideration given to trustworthiness (92 percent), followed by knowledge (89 percent), and high ethical standards (87 percent). On these matters, age plays an important role in how clients rate the importance of specific aspects of the advisor-client relationship with younger clients (those 50-years old or younger) placing less emphasis on ethics and more emphasis on working with an advisor who helps them maintain a long-term approach to investing, while clients over the age of 50 place less emphasis on any single aspect of the relationship.
Clients place greatest value on investment management expertise.
When asked about the services clients receive from their advisors, clients listed investment management (61 percent), followed by financial planning (40 percent), wealth management (33 percent) and retirement solutions (25 percent). The responses were mirrored when clients were asked to rank the importance of these four types of support/services provided.
“Client expectations are continuing to grow along with the specialized knowledge that practitioners need to serve the HNW segment,” said Sean Walters, CAE, chief executive officer, Investments & Wealth Institute. “Top advisors not only pursue advanced credentials, they articulate their value by educating their clients about their certifications and how their added knowledge drives 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.”
Canadian Investors 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 75 percent of HNW clients wanted to know their advisor had done more than meet the minimum educational requirements to become registered or licensed.
In terms of the aspects of credentialing that were of critical importance to investors, three characteristics rose to the top, with respondents rating the following as somewhat or very important:
Communication provides a missing link.
- Knowing their advisor would lose their credentials if they failed to meet ethical standards (89 percent).
- Knowing their advisor had met a rigorous set of standards (e.g., ethics, experience, education, examinations) to be certified (88 percent).
- Knowing their advisor had met ongoing standards (e.g., annual continuing education) in order to maintain his/her credentials (89 percent).
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. While 56 percent of those surveyed said they were somewhat or very comfortable with their current level of understanding of the designations held by their advisor, 40 percent said they would like more information about which designations/credentials their advisor holds, as well as what they mean.
When asked if their advisors proactively shared details on their designations with them, respondents indicated that only 30 percent did so.
More striking is the correlation between client engagement (comprised of satisfaction, loyalty and referral activity) and proactive communication around designations or credentials. Forty-four percent of engaged respondents said their advisor had proactively shared information on designations/credentials, dropping to 25 percent among those who were not engaged.
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 Institute Annual Conference Experience–ACE Nashville on May 6-9, 2018 at Music City Center in Nashville, Tennessee (USA).
For additional information about the Institute or “Canadian Investor Research,” contact Greta Gloven, firstname.lastname@example.org
or 1+ 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 Institute® is a registered mark of Investment Management Consultants Association Inc. doing business as Investments & Wealth Institute. CIMA®, Certified Investment Management Analyst®, CIMC®, CPWA®, and Certified Private Wealth Advisor® are registered certification marks of Investment Management Consultants Association Inc. doing business as Investments & Wealth Institute. RMA(SM) and Retirement Management Advisor(SM) are marks owned by Investment Management Consultants Association Inc. doing business as Investments & Wealth Institute. The Investments & Wealth Institute does not discriminate in educational opportunities or any other characteristic protected by law.
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