Only 57 percent of investors said their financial advisors proved their worth in navigating recent market conditions, according to a new report.
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The report, by Fidelity Investments, examined the role of “valued advisors” who proved their worth to investors while navigating recent market conditions, resulting in their clients seeing clear value in their service offering. Financial advisors who proved their worth as “valued advisors” benefited from clients who were more engaged, trusting and loyal, with 66 percent saying they would likely stay with their advisors if they switched firms (compared to 37 percent for investors without a valued advisor).
Valued advisors also benefited from three times the number of referrals, a significantly higher share of wallet—the amount of investible assets an advisor manages for a client—than investors with other advisors, of 71 percent vs. 49 percent, and more clients looking to consolidate assets with them, at 39 percent vs. 24 percent.
According to the report, when working with valued advisors, investors were more focused on long-term investment returns (84 percent vs. 74 percent for other investors) than short-term fluctuations in the market. In addition, when investors were asked to indicate the most important benefits of working with an advisor, those with valued advisors said they “help me reach my financial goals” (72 percent), “help me achieve financial independence” (65 percent) and “provide peace of mind” (61 percent) as their top three benefits.
More investors with valued advisors (29 percent) said they were interested in receiving holistic financial guidance than their counterparts without valued advisors (18 percent). In addition, 63 percent of investors with valued advisors wanted their advisor to know everything about their personal and financial lives so they could help them plan accordingly.
Forty-two percent of investors with valued advisors felt technology had enhanced the relationship versus 20 percent of those without valued advisors. Moreover, 45 percent of investors with valued advisors agreed that they collaborate more effectively with their advisor through the use of technology.