Effective communication and technology solutions are key to client retention and growth
November 2, 2022, BOSTON—In volatile markets, investors—particularly those experiencing it for the first time—look to their advisors for guidance. Advisors can seize upon this opportunity to engage existing clients and gain new ones by offering financial planning services, using effective communication strategies, and implementing financial planning software, according to the latest Cerulli Edge—U.S. Asset and Wealth Management Edition.
Nearly 75% of advisors’ clients receive some form of financial planning, a share that is expected to rise to 82% by 2023. 18% of investors working with a financial advisor do not have a financial plan in place but consider it important. Cerulli recommends advisors consider re-introducing their planning services to those who may not be aware of this service offering, particularly during periods of market volatility.
In addition to financial planning services, advisors should consider developing a communication strategy to attract and retain advisory relationships. Close to 40% of retail investors consider it extremely important that their advisor maintains an appropriate amount of contact with them. Advisors can implement this by distributing timely information about the current market and economic situation and offering their own analysis, which clients are likely to share with their own personal networks. “A thoughtful stream of touchpoints can buoy client satisfaction even as markets falter, allowing advisors to be best positioned for client retention and growth,” says Scott Smith, director.
The Benefits Of Financial Planning Solutions
As firms continue to encourage financial planning, scale becomes an important consideration. “Well-integrated financial planning solutions can help advisors meet investor demand for bespoke planning services efficiently, which can prove invaluable, especially in times of market volatility,” says Smith. According to the research, 74% of advisors use financial planning software within their practice, and by 2023 this percentage is expected to reach 82% among firms polled.
Ultimately, according to the research, advisors who offer financial planning find that their clients are better positioned to stay the course and remain calm despite declining market performance while enabling advisors to develop enduring client relationships. “Financial planning shifts the focus to progress made toward achieving goals rather than investment performance,” says Smith. “This frames volatility in the context of a bigger picture, which helps clients feel prepared when market shocks arise.”
About Cerulli Associates
For over 30 years, Cerulli has provided global asset and wealth management firms with unmatched, actionable insights.
Headquartered in Boston with fully staffed offices in London and Singapore, Cerulli Associates is a global research and consulting firm that provides financial institutions with guidance in strategic positioning and new business development. Our analysts blend industry knowledge, original research, and data analysis to bring perspective to current market conditions and forecasts for future developments.