No longer does the advisor serve as the sole conduit between the individual client and the investment community. The advisor is increasingly just one of several points of influence in the client’s world. How are advisors equipped to serve this new breed of investor? Today, I’ll take a closer look at how advisors evaluate key areas, based on the results of our survey of 652 financial advisors in the United States and Canada earlier this year.

The generation gap is significant

Younger advisors—those with less than 10 years’ tenure—are more likely than older advisors to:

  • Have clients question their fees (40 percent vs. 23 percent).
  • Be asked for information about investing strategies in use (57 percent vs. 37 percent).
  • Be asked to provide advanced digital tools their firm doesn’t have (52 percent vs. 20 percent).
  • Use social media with their clients (74 percent vs. 59 percent).
  • See online investment managers as a threat to their business (29 percent vs. 15 percent).

You may be asking yourself: “So what if the generation gap is prevalent amongst advisors?” For firms, this gap is important to address or they risk eroding the younger advisors’ satisfaction and loyalty.

Client experiences are changing

There is little doubt, investors are becoming more confident and knowledgeable. In fact, 88 percent of advisors we surveyed say clients are better informed and 54 percent say they have become more active in decision-making. With questions about advice, come questions about fees—32 percent of advisors overall say investors question their fees. This number drops nearly 10 percent when we look at just advisors with more than 10 years’ tenure.

There’s pressure on the value proposition

Download the report.
Download the report.

Our survey results reveal that only about one-third of advisors find themselves serving more clients with lower AUM, but there is a big difference in terms of advisor tenure. Younger advisors report a decrease of 19 percent in average AUM per client, while older advisors report an increase of 18 percent.

For firms, understanding their advisors and their advisors’ clients has never been more important than now. That’s because a large quantity of money is about to move from one generation to the next. How large? Approximately $41 trillion over the next 20 years—and most firms are not prepared to attract of retain these assets. Firms must adapt quickly to become relevant to their advisors and clients. How can they do that?

Join me next week, when I look at how wealth management firms can respond. Until then, to read the full survey results, check out, “Listening to the Voice of the Advisor: Insights for Wealth Management Firms” or download the Infographic.

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