Valued characteristics that investors like in advisors
The most valued characteristics investors viewed in their advisors were the ability to translate personal goals into an investment strategy and understanding the investment relative to the financial / market environment. Oddly, the least valued characteristics were listening skills, objectivity and years of experience, as one might think success in the most valued skills correlate with the advisor’s least valued traits.
The study (found via Barry Ritholtz) from INResearch titled “The Future of Advice: Business Models and Services for the Next Generations,” also pointed to differing opinions about the type of services investors most valued.
Retirement income planning prized by the financial advisor
While retirement income planning was the most desired service a financial planner could offer, it was prized by the financial advisor ten percent more than the investor. In a similar vein, advisors valued investment management to a much higher degree, 39.2 percent, than did investors, 23.2 percent. Investors on the other hand valued cash flow planning, bill payment and brokerage services to higher degrees than did advisors.
When asked what type of advisory firm they preferred, 48.7 percent of investors said their desire was to work with a fully service advisory firm, the highest response. However, this represented the lowest response among financial advisors, who were mostly 1 person practitioners.
Investors prefer human advisors over robo-advisors
Contrary to the hype about “Robo-Advisors,” computer-based programs that make portfolio recommendations for investors, the study revealed that most investors desire a personal relationship with their advisor, as a majority said they need more direct, personalized advice. The vast majority of investors said they want to use a financial advisor in the future, with 95 percent of those who currently use a human advisor saying they want to stay in that relationship type. 73.5 percent of those self-directed investors said they would consider using a financial advisor in the future.
In terms of communication, both advisors and investors prefer the phone and personal meetings now, but expect phone usage to drop in the future, with email and video conferencing expected to become more popular in the future.
When it comes to how investors use social networks, the most active are, respectively, Linkedin, Facebook and Twitter, with Google+, blogs, Pinterest and Instagram following behind in popularity.
The study also revealed that younger investors look to a greater diversification for investment information than do their older counterparts. Those over 45 preferred receiving most of their information from a financial advisor to the tune of 65.7 percent, while 50 percent of the younger generation preferred the financial advisor. Financial newspapers or financial web sites was preferred by 47 percent of younger investors and 41 percent of older investors. Financial television news networks accounted for 13 percent of younger audience participation and 9 percent of the older audience.