Advisors and their clients do not always see eye to eye when it comes to identifying key elements driving their relationships, according to a survey by EY.
“For example, there’s been a lot of emphasis in the financial sector about how to win clients through social media,” says Gregory Smith, partner and Canadian leader of EY’s Wealth Management practice. “But our research indicates the reality is a lot of these strategies are not having the desired impact.”
In fact, only 7% of Canadian investors claim to interact with their advisor using social media. But 40% of advisors believe they are interacting with their clients in this way.
“An advisor might send an article to his or her clients through social media and think that is a positive interaction,” explains Smith. “But clients aren’t necessarily paying attention to that. Advisors need to ask if it’s really adding value for their clients and having a positive effect on retention.”
Also, advisors tend to overvalue the importance of their relationships with clients, while misreading the relevance of factors like fees and segment-specific strategies.
“After years of focusing on liquidity and wealth preservation post-2008, portfolio performance is regaining the top spot on clients’ minds,” says Smith. “Investors are now looking at what will drive future wealth, and how advisors will help them achieve their broader financial goals.”
Other key findings include:
- Advisors are focused on generational wealth transfer and the move to non-traditional investments, whereas clients are more focused on geographic diversification and the balance between personalized advice and self-service.
- Investors put more stock in the reputation of the individual advisor, and less emphasis on firm reputation, than their US counterparts.
- Canadians still value traditional face-to-face interaction with advisors and are less likely to conduct transactions digitally than their US counterparts.