New joint research from the Money Management Institute (MMI) and Aon plc, a leading global professional services firm providing a broad range of risk, retirement and health solutions, finds that the most successful financial advisors – those defined as managing more than $500 million in assets – are taking advantage of the digital tools and solutions made available to them by their firm at higher rates than their peers.
These advisors also have a more positive perception of their firm as a digital leader and are regularly advocating the firm’s digital offerings to their clients.
The findings are from the fourth and final installment of a MMI and Aon research series that has examined gaps between investor perceptions and financial services firm delivery that continue to challenge the wealth management industry and inhibit the provision of value to clients. The Advisory Solutions: Expectations and Experiences research analyzes key disconnects between client and advisor perceptions and explores what successful advisors and wealth management firms are doing to navigate these notable differences.
“Advisors have been evolving toward more holistic wealth planning by incorporating digital tools to quickly and efficiently address broader financial planning needs. There has been an accelerated rate of adoption in the COVID-19 era,” said Craig Pfeiffer, President and CEO of MMI. “Our research also indicates that investors increasingly want to see their values reflected in their investments; utilizing a firm’s ESG data and tools is an effective way for advisors to spend more time having meaningful client conversations.”
Peter Keuls, Global Head of Wealth Management in the Human Capital practice at Aon, added, “To underscore the importance of digital tools as a key component of advisor success, our research finds that the most successful advisors are technology advocates and are much more likely to feel that their firm is a digital leader.”
Specific findings of the fourth installment of the report, entitled Profile of Today’s Successful Financial Advisors, include:
- The most successful advisors–defined as those who are managing the largest books of business–embrace the digital tools provided by their firm. They also feel that their clients are getting the best digital technology to manage their investments. This holds true for both older and younger advisors.
- Successful advisors are more likely to indicate that their clients are interested in aligning investments and personal values. They are concerned, however, about the quality of environmental, social and governance (ESG) tools and data that are currently available.
- The most effective older advisors (over age 55) stand apart from their peers because they have benefited from best-in-class technology and are accordingly comfortable and confident using it. Fifty-five percent of the most successful older advisors agree their firm is an industry leader in this area, compared to 24 percent of their peers.
- Younger successful advisors (under age 45) are also distinct, but for different reasons. They are interested in using tools that help them understand their clients’ values and take a more holistic approach to the financial planning experience. Younger advisors managing large books are far more likely than their less-successful peers to adopt more advanced goals-based financial planning tools, enabling better conversations.
- Advisors overemphasize the importance a similar background (e.g. age, gender or even the same values) plays in forming trusted client relationships. While older investors are primarily interested in planning capabilities, younger investors generally place more importance on a wider set of personal values. They want their advisors to be cognizant of their values and how they are reflected in their financial plans.
About Advisory Solutions: Expectations and Experiences: The research is a four-part series based on a proprietary research program produced by the Money Management Institute (MMI) in association with Aon. The series explores the gaps that have emerged between client expectations of advisory solutions and firm delivery, and why these gaps are undermining client satisfaction as well as business performance.
About the Money Management Institute (MMI): Established in 1997, the Money Management Institute (MMI) is the industry association representing financial services firms that provide financial advice and investment advisory solutions to investors. Through conferences, educational resources, and thought leadership, MMI facilitates peer-to-peer connections, fosters industry knowledge and professionalism, and supports the development of the next generation of industry leadership. MMI member firms are dedicated to helping individual and institutional investors, at every level of assets, plan for and fulfill their financial goals. For more information, visit http://www.MMInst.org.
About Aon: Aon plc (NYSE: AON) is a leading global professional services firm providing a broad range of risk, retirement and health solutions. Our 50,000 colleagues in 120 countries empower results for clients by using proprietary data and analytics to deliver insights that reduce volatility and improve performance.