Financial planning conversations have moved online – with an increasing proportion of digital behaviors likely to stick. Both clients and advisors now place greater emphasis on the digital experience because it offers a degree of accessibility typically not permitted by offline interactions.
Findings from the third report in this year’s Advisory Solutions: Expectations and Experiences series from MMI and Aon suggest that, with greater use of planning, monitoring and reporting tools, both clients and advisors across wealth levels and age groups have found new and productive ways of working together. Many of these behaviors will persist in the post-pandemic environment, which means wealth managers need to focus on ensuring the digital experience serves its purpose and encourages behaviors that maximize opportunities for clients and advisors.
Other key findings:
- Digital connectivity has meant that advisors continued to e-meet with clients and deliver high-quality advice when it matters most. A third of clients say their use of the planning tools offered to them by their wealth manager increased during the pandemic – and, looking ahead, nearly all say that their use of planning tools will either remain the same or increase.
- Investors who have had a financial planning discussion are bullish about 2021 U.S. market performance. They are more likely to recognize the value of financial advice, with approximately one in two saying the value of advice has increased since the pandemic. One reason driving this is portfolio performance. Clients who received advice during the 2020 period of market volatility are more likely to report that the performance of their investments exceeded expectations.
- Financial planning discussions impact client behaviors as well as satisfaction scores. During financial planning discussions, clients single out certain activities – such as identifying steps to better align future spending and savings with their financial goals – as being particularly valuable. About half (48%) of clients who had a planning discussion adjusted their portfolio allocation in response to 2020’s market volatility compared to 31% of those who did not have a planning discussion.
- Wealth management firms have spent significant time and resources streamlining the financial planning process, but there is still considerable room for increased advisor adoption. Advisor adoption remains relatively low with about a third of advisors not using many of the tools provided by their firm. Increased advisor uptake of planning tools can help wealth management firms and advisors more efficiently address the growing client need for planning.
“The pandemic and ongoing market turbulence have reminded everyone that not only is it important to plan for the unexpected, but also to do so with a trusted partner,” said Craig Pfeiffer, president and CEO of MMI. Peter Keuls, global head of wealth management at Aon, added: “Having a plan allows advisors and their clients to act decisively and take advantage of market volatility and the resulting opportunities.”
Detailed findings from the 2021 Expectations and Experiences research are being released in a series of four reports.
To learn more:
Download Report #3: Market Turbulence and the Shift Toward Financial Advice
Download Report #2: Lessons from the Pandemic
Download Report #1: Delivering Premium Advice
Download Executive Summary of the 2021 research findings
View special MMI Webinar featuring Craig Pfeiffer with Peter Keuls and David Lo of Aon
We hope you find this new research valuable. If you have any questions, please contact MMI at (646) 868-8500 or info@mminst.org.
