83% of advisors say better technology tools would improve client acquisition
Broadridge Financial Solutions, Inc., a global Fintech leader, and the Financial Services Institute (FSI) released a joint study of over 400 U.S. financial advisors that sheds light on growth opportunities within the wealth management industry. Specifically, the study demonstrates the opportunity to leverage digital technology, explore new investment vehicles, expand business, and make stronger connections with previously underserved communities and the next generation of investors. The survey highlights the upward opportunity the advisor community has to drive impact around ESG, DEI, financial literacy and wealth transformation.
According to the survey, a majority (92%) of advisors report satisfaction with their technology capabilities, but advisors still see opportunities for improved technology to better meet their practice goals. Eighty-three percent of advisors argue that better technology tools would greatly improve new client acquisition, especially as 32% of advisors express interest in prospecting outside of their current geographic location and will rely on improved technology tools to reach prospects virtually.
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“This joint study with FSI highlights the growth opportunities for financial advisors and the heighten role technology tools play in enabling advisors to provide a better service experience, foster deeper relationships and reach new constituencies,” said Chris Perry, President of Broadridge Financial Solutions and a board member of FSI. “Advisors are taking advantage of this wave of digital transformation to provide investment ideas, offer financial literacy tools, discuss ESG trends and connect with clients and their families in new ways.”
Video conferencing is alive and well and not expected to go offline anytime soon, as 51% of advisors report that they are still conducting formal client meetings virtually – either via phone or video conferencing. Advisors expect to increase their video conferencing usage in the next 12 months (39%, versus 21% currently using video conferencing). At the same time, 88% of advisors expect to either increase or maintain their current rate of in-person, formal client meetings in 2022.
The Rise of Crypto, ESG and More Financial Literacy
As the market remains in a low interest-rate environment and investors are seeking creative ways to find returns, 64% of advisors report that they have seen an increased interest in cryptocurrency from clients. Further, 33% of advisors report that they have seen an increased interest in ESG investments from clients as the asset class gains popularity.
“With the rise of DIY investing and clients’ growing interest in branching out to new asset classes, financial literacy is of the utmost importance and advisors have a clear role to play,” said Dale Brown, President & CEO of FSI. “There is a significant opportunity for advisors to educate current and prospective clients and empower them to make better financial decisions, and technology tools can enable them to be informed and connected.”
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Social Media, Teaming and Holistic Financial Planning
LinkedIn (77%) and Facebook (67%) are the most widely used social media platforms by advisors for both business and personal use, providing other channels where advisors can reach their clients virtually.
Over half (58%) of advisors describe their practice as a “solo” practice, and of the advisors who describe their practice as a “team” practice (42%), the average team size is four, demonstrating that advisors are increasingly reliant on technology tools to service clients and fill the personnel gap.
The study also found that most advisors (60%) are equally focused on financial planning and investment management, yet advisors under the age of 45 cite client-facing tools as the number one area for technology improvement as they increasingly focus on holistic financial planning.
Expanding Family Connections to the Next Generation
Eighty-nine percent of advisors have engaged or plan to engage with additional generations of existing clients, such as children or grandchildren. Of the advisors currently or planning to engage with those additional generations, 79% directly raise the topic with their clients and 55% offer to build the financial literacy of clients’ children or grandchildren.
While a majority of advisors recognize the importance of building relationships with the next generation of investors through existing clients, many also prioritize engaging their client’s spouse in financial discussions, as 9 in 10 advisors consider it important to maintain a strong relationship with both spouses. Further, advisors say that on average, 68% of formal client meetings include both spouses.
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