Filed Under:Life Insurance, Life Planning Strategies

40 percent of advisors seeking to replace older clients

The report identifies as a “big risk” for advisors the energy they spend to meet existing client needs, a challenge that many advisors find difficult to achieve.
The report identifies as a “big risk” for advisors the energy they spend to meet existing client needs, a challenge that many advisors find difficult to achieve.

Sixty percent of financial planning practices worldwide are growing, the expansion driven by increases in asset-based fees tied to robust equity markets, according to a new report.

Natixis Global Asset Management discloses this finding in an international study of financial advisors undertaken to better understand their attitudes and needs. Conducted by CoreData Research on behalf of Natixis, the survey polled 1,300 advisors in nine countries and across four continents.

The report identifies as a “big risk” for advisors the energy they spend to meet existing client needs, a challenge that many advisors find difficult to achieve. The challenge extends as well to prospecting: The amount of time advisors spend seeking new clients is limited to only 11 percent or 15.9 hours per month.

Only 40 percent of advisors globally, the research adds, are actively seeking younger clients to replace older clients or those in a “decumulation” (distribution) phase.

The report also reveals that:

  • 53 percent of advisors globally admit to difficulties in accommodating account withdrawals for clients in retirement while growing portfolios to transfer wealth;
  • 46 percent find generating sufficient income for clients in retirement difficult; and
  • 40 percent cite difficulties in effectively managing volatility risk for individuals in retirement.

“In search of investment solutions to meet their needs, advisors and their clients are typically forced to make compromises, and in some cases the end solutions fail to deliver, client expectations/needs are too great for their investment portfolios to deliver a successful outcome or the bridge that needs to be crossed is a bridge too far…clients don’t have a sufficient time horizon to reach their goals.”

The Natixis survey also reveals the following:

  • Almost four in five advisors globally say they seek investment strategies/products that help to manage risk (81 percent), manage volatility (79 percent) and produce income for clients (82 percent).
  • Nearly six in 10 (59 percent) of advisors globally agree there is a need to replace traditional diversification and portfolio construction techniques with new approaches to achieve results. Only 31 percent are in disagreement and the remainder neither agree nor disagree.
  • Three-quarters of those polled (75 percent) admit that financial advisors require more education, with only 16 percent in disagreement and the remainder neither agreeing nor disagreeing. 
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