SEI Investments has released the findings of a recent survey of financial advisors addressing views on the changing wealth marketplace. The survey touched on a number of industry trends, but overall survey respondents overwhelmingly agreed that the financial advisor industry was in the midst of a fundamental shift. Respondents also indicated that the burden of day-to-day tasks and responsibilities are overwhelming their ability to take advantage of opportunities emerging from that shift.
More than 50% of advisors stated the industry “was in the middle of the biggest change they’d ever experienced.” The group cited their greatest obstacle to growth, however, was a limited capacity to evolve their roles over the next five years.
The emerging need for “holistic advice” was a pressing concern for advisors, ranking “accurate and unbiased advice” as the key to delivering trusted advice in 35% of the survey respondents. The survey pointed to the inconsistency between advisors’ desire to offer holistic advice and the future actions they planned for their firms. Despite listing “holistic advice” as the most important factor in delivering trusted advice, when asked about their firms’ plans for success in the coming next five years, plans to include additional specialists and add better services were some of the least cited.
Nearly 60% of advisors polled said that “offering competitively superior services that help clients achieve their goals” defined their view of success for their firms, but a majority of those advisors stated their strategy for achieving success hinged on executing better marketing – again, not adding specialists or broader services.
Demonstrating the shift in wealthy clients’ attitudes toward goal achievement rather than financial performance, when asked about their clients’ view of wealth, 33% of advisors ranked “overall well-being for the client and family” number one — above protection of assets, financial independence and even accumulation of assets, which ranked last.
The industry gap between client expectations and today’s advisory model extends to compensation. More than 50% of advisors ranked that clients who’d experienced a life event required a significant change in their financial strategy – yet astoundingly, less than 50% of those advisors suggested that they were paid for executing those services.
“The findings of this survey confirmed that the traditional advisor model needs to change,” said Carl Guarino, head of the SEI Advisor Network. “Advisors can see where the industry is headed and agree that it’s drastically changing. Yet they just can’t seem to keep up with it by relying on their current resources.”
“Today’s wealthy clients demand a deeper set of services from their financial advisors, which most independent advisors can’t deliver on their own,” Guarino continued.
The SEI Advisor Network “Survey of Advisor Evolution” was conducted among nearly 200 of SEI’s independent financial advisor clients. Additional questions and findings addressed areas such as firms’ largest revenue sources, as well as roles in the client/advisor relationship. For more information about the survey results or the SEI Advisor Network, please call one of the contacts listed.