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New Study Indicates Current Crisis Impacts Client Loyalty and Confidence Highlighting Unique Opportunities for Advisors New Investor Research Conducted in March 2020

Issue date: Wednesday, July 15, 2020

Contact Information: Devon Coquillard | +1 303 850 3202 | Contact Email: dcoquillard@i-w.org

New Study Indicates Current Crisis Impacts Client Loyalty and Confidence Highlighting Unique Opportunities for Advisors New Investor Research Conducted in March 2020

Reveals Insights and Perceptions about working with Advisors in Challenging Times have opportunity to give advice while needs change during market downturn.

A new special report released by the Investments & Wealth Institute®, 2020 Investor Research Canada: The Current Crisis, the Impact on Client Loyalty, and the Implications for Your Business highlights the shifts that are occurring in clients’ views, provides a look at what clients need, want, and expect during an unprecedented time, and explores how advisors can support clients to bolster confidence and loyalty.

Despite 88% of survey respondents saying they “very satisfied” with their advisors and are delivering on the attributes that clients rate as most important: trust, accuracy, ethics, and knowledge, the study also finds there is a potential looming loyalty crisis. 

Due in large part to the timing of the study, which was conducted during a period of historic social, market, and economic turmoil, the study points to larger number of clients who are questioning whether their advisor is providing the advice and guidance they need. Between March 10 and March 24, there was an 11% decrease in the number of clients who said they would definitely continue to work with their advisor.

The cause for the change in client loyalty stemmed from clear relationship gaps in six areas, with the largest gap being related to investment performance and risk, which is to be expected in a volatile market. However, there were significant gaps on overall trust, as well as trust that the clients’ needs were being put first. 

In addition to relationship gaps, there are clear confidence gaps. Four confidence gaps were identified that reflect how clients are feeling, rather than the service their advisor is providing:
  • Feeling financially secure
  • Feeling in control of reaching my financial goals
  • Feeling confident in my ability to reach my financial goals
  • Having a clear plan in place to reach my financial goals
Seventy-nine percent of clients reported a low to moderate level of self-confidence based on an index created using the above attributes. These confidence gaps highlight an opportunity for advisors to support clients in new and more valuable ways.

“Confidence is not only a reflection of what is happening in the markets and the value of portfolios. Advisors cannot impact world events or the markets, any more than their clients can. Advisors can, however, help clients to feel more in control and more confident in their own abilities. And they can ensure the plan is both clear and communicated. At a time when things feel out of control, advisors have a unique opportunity to raise the collective level of confidence among their clients,” said Julie Littlechild, Founder and CEO of Absolute Engagement, and author of the Investments & Wealth Institute-commissioned research.

In order to help clients, advisors will need to gain a deeper understanding of the real challenges their clients are facing and respond with content or educational opportunities that reflect those needs. In so doing, advisors can demonstrate leadership, enhance client confidence, differentiate their practices, and retain their clients.
Clearly the data shows in times in volatile markets loyalty fluctuates and illustrates the importance of continuing communication with your clients and helping clients have greater confidence in their financial knowledge. In order to gain a deeper understanding of what kind of educational content would be of interest, the U.S. portion of the survey asked U.S. investors which topics they would be interested in learning more about. Among the most popular were those identified:
  • Maintaining sufficient assets to meet lifetime income needs (39%)
  • Coping with a significant market downturn (37%)
  • Education on investments or the markets (32%)
  • Dealing with the rising costs of health/long-term care (29%)
  • Ensuring my partner/spouse is taken care of should I pass away first (28%)

However, based on the date the U.S. investor participated, it is clear that there are other topics gaining in popularity between March 10 and March 24. Clients reported their interest on March 10-11 versus March 16-24 as: 
  • 19% March 10-11; 48% March 16-24 - Health and wellness
  • 12% March 10-11; 23% March 16-24 - Thinking about second careers
  • 12% March 10-11; 21% March 16-24 - Caring for aging parents
  • 24% March 10-11; 32% March 16-24 - Helping children make better financial decisions
  • 30% March 10-11; 38% March 16-24 - Education on investments and markets
  • 20% March 10-11; 26% March 16-24 - Leaving a financial legacy for a charity
  • 11% March 10-11; 17% March 16-24 - Finding volunteer opportunities

Health and wellness being of increasing importance is of no surprise during this crisis. Of interest is that the only topic to show a significant decline was “Coping with a Significant Market Downturn”. However, of interest is the fact the coping with a significant market downturn became less important from week to week during the survey, as other non-financial issues began to dominate for clients.

“The world is navigating through unique challenges and rapidly emerging norms, and investor needs are significantly different today than two months ago, with investors making changes in their lives and businesses. What does this mean for advisors? It means that the current environment is one of the most significant threats to businesses and one of the greatest opportunities to provide clients with meaningful support that goes beyond investments and planning,” said Sean R. Walters, CAE®, Chief Executive Officer of the Investments & Wealth Institute.

The special report is available as a downloadable PDF here

For Information:
For additional information, contact Devon Coquillard, communications manager, dcoquillard@i-w.org or (303) 850-3202.

The research, fielded by Absolute Engagement, gathered input from just over 427 investors across Canada via an online survey, between March 10 and March 24.  All respondents work with a financial advisor, make or contribute to the financial decisions in the household, and meet specific asset criteria.

About the Investments & Wealth Institute®
Established in 1985, the Investments & Wealth Institute, is a non-profit professional association, advanced education provider, and standards body for financial advisors, investment consultants, financial planners, and wealth managers who embrace excellence and ethics.

The mission of the Investments & Wealth Institute is to deliver the premier investment consulting and wealth management credentials and world class education, in order to encourage the practice of high standards of professional conduct and improve the overall competency and professionalism of advisors.

Investments & Wealth Institute administers three certifications, Certified Investment Management Analyst® (CIMA®), Certified Private Wealth Advisor® (CPWA®), and Retirement Management Advisor® (RMA®). Through its publications, live events, online courses, assessment-based certificate programs, and advanced certifications, the Institute delivers premier-quality, practical education to advanced practitioners in more than 39 countries.

About Absolute Engagement
Absolute Engagement is an organization that prides itself on being an expert in elevating the client experience and helping advisors drive practice growth. Founder and Chief Executive Officer, Julie Littlechild, is a recognized expert on the drivers of client engagement and a popular speaker on how client experience is being disrupted and how to leverage those trends to drive referrals. Ms. Littlechild has presented at numerous Institute events, both in-person and online. She has worked with and studied successful financial advisors and their clients for more than twenty-five years.  Previously, Ms. Littlechild launched and ran one of the industry’s leading research firms, focused on client engagement. She is the author of a popular blog, the co-host of the Becoming Referable podcast and the author of The Pursuit of Absolute Engagement. For more information, visit www.absoluteengagement.com.

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