Sabrina Bailey
In uncertain times, astute financial advice is worth more than ever. Over the past few years, the successive shocks of Covid-19 and high inflation have brought the previous decade’s gently rising bull market to a halt. Yet our recent research finds that wealth firms have generally served their investors well.
- After a few uncertain years in financial markets, wealth firms have earned widespread investor satisfaction, according to a new Refinitiv report.
- Yet there’s also a growing need for personalised portfolios, new investment products and insights into volatile markets that can be met through technology and data.
- Our report concludes that wealth firms have scope to maintain and even increase investors’ satisfaction, recommending five ways to attract and engage them.
Our latest report, Bridging the generation gap: Five ways to attract investors and create competitive advantage, shows that almost all retail investors are pleased with the advice and guidance wealth firms have provided. Our survey of more than 1,000 retail investors uncovers their positive views about advisor relationships. It also looks into their diverging appetites for risk-taking in 2023 and other topics such as the demand for alternative investments.
Widespread satisfaction with advisors
At a time when many investors might feel disorientated, it’s a credit to wealth firms that nine out of 10 (92%) of the investors we surveyed say they are satisfied with their advisors. It’s still more impressive that six out of 10 (59%) are very satisfied. While younger investors are somewhat less happy, they remain satisfied. For instance, 86% of Gen X (aged 41-56) and millennials (25-40) say that their wealth firms understand their goals and values. That compares with 93% of baby boomers (aged 57+).
84% of Millennials state that advisors provide a personalised investing experience based on their needs.
Even after these positive findings on relationships with wealth advisors, wealth managers have the scope to do more to maintain and improve high levels of satisfaction. For instance, our survey also highlights the different requirements of different types of investors. Notably, younger generations are more interested in products such as ESG investments, hedge funds, real estate and more.
Adapting to these varying requirements can be done through greater use of technology and digitalisation. Our solutions such as Workspace for Wealth Advisors provide the tools and data for advisors to monitor markets and analyse client portfolios, so they may share trusted insights that help investors to make confident decisions.
This helps build strong investor relationships – which is imperative during volatile markets – while allowing advisors to offer a more personalised service and new investment opportunities that investors are looking for.
Catering to differing risk preferences in 2023
Our survey also investigates investors’ views about the second half of 2023, discovering a broad spectrum of opinions. Are they taking a “risk-on” or “risk-off” approach? We found that investors are evenly split at 37% – with 26% not sure.
There’s a wide range of risk appetites, with younger investors unsurprisingly the most willing to take risks. Some investors say they would react to a major market downturn by maintaining their current portfolio; others say they would look at it as a buying opportunity.
This highlights a challenge facing wealth firms in today’s volatile markets. Not only must they personalise portfolios to risk preferences but also need to respond quickly and confidently to changing events with actionable data and insights that drive confident investment decisions.
How can advisors improve investor loyalty?
The past few years have taught us to think and act more broadly to grasp today’s financial uncertainties. Our report reveals how well wealth firms appear to have done so, earning their investors’ trust and appreciation.
Yet there remains more that can be done to differentiate wealth firms in difficult times. Our report concludes by highlighting five ways – ranging from service personalisation to identifying 2023’s long-term investment opportunities – for firms to maintain and improve investor satisfaction.
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