I have been catching up on the industry news that I missed during my recent vacation. I came across a number of articles in quick succession that caught me attention, and that should raise warning flags for many advisors and RIAs:
1)
Wealthy Interested in Robo-Advisors - According to a survey by Ernst & Young (EY), about 1/3 of investors in North America said that they would be willing to open an account with a robo. But wealthy clients with more than $10 million expressed a higher level of interest than mass-affluent investors. 47% of investors with between $10 million and $25 million said they would consider a robo, while 45% of those with more than $25 million in assets said the same. By comparison, just 29% of investors with between $250,000 and $1 million said they were willing to open an account with a robo-advisor.
2)
Wealthy Think They Can Manage Their Portfolios Themselves - According to a recent survey by Verdict Financial, only 23.1% of high net worth clients deem their portfolios too complex for them to manage on their own, and the top reason they hire professional wealth managers is to access complex products, such as alternative investments (which now account for 26% of an average high net worth portfolio). The report also projects that financial and tax planning will be the biggest demand from high net worth investors moving forward.
3)
Wealthy Reluctant to Refer Clients - Wealthy clients are unlikely to be a good source of referrals for financial advisors, according to a PwC survey (conducted for them by Wealth-X). Among investors with $1 million or more in investable assets, only 39% said they would recommend their advisor. Only 23% of investors with $10 million or more said they would make a recommendation.
While 69% of high net worth clients use mobile and online banking and 98% are on the internet daily, they don't think their advisors are keeping up: "technical capabilities and digital offerings" ranked eighth out of 11 options that investors value most about their current advisors, according to the survey,
4)
RIAs Need To Build Better Websites - 83% of advisors said their websites failed to bring in new prospects, according to a 2015 survey by Paladin Digital Marketing.
The survey concludes that potential clients coming to a site should be able to easily navigate to the information they want, content should be free of jargon, transparent about disclosures, and include what makes a RIA unique. The site should also demonstrate specialized knowledge and be free from clutter.
Taken together, these trends should be an eye-opener for advisors and RIAs. We always encourage our clients and prospects to use the slower summer months to plan for the Fall, begin to work on next year's business plans, etc. The message here is that everyone should take these tasks a little more seriously this year.
Jump start your business this Fall with some new ideas that show your clients you deserve their business. Give us a call to discuss - we'll be here all Summer!
