Advisors and financial professionals prioritize digital client experience and self-service toolsSixth Annual Advisor Authority study reveals COVID-19 top threat to success and the steps advisors and financial professionals are taking action to enhance the client experience.
Columbus, OH —October 14, 2020— As the COVID-19 pandemic puts immense pressure on American business, driving record levels of unemployment and an increasing number of closures, advisors and financial professionals say their practices are not immune to the impact.
Nationwide’s sixth annual Advisor Authority Study, powered by the Nationwide Retirement Institute, surveyed more than 1,800 advisors, financial professionals and individual investors to examine these pressures and reveal how advisors and financial professionals are using technology to adapt their firms and preserve profitability.
“When advisors and financial professionals think about the success of their practice over the next 12 months, they think about the impact of COVID-19—and we understand their concerns,” said Craig Hawley, Head of Nationwide’s Annuity Distribution. “However, by re-tooling with the right technology, advisors and financial professionals can continue delivering an exceptional client experience, retain current clients and attract new ones, ensuring their practice and profitability can withstand the outsize challenges of this pandemic.”
Concerns About Profitability on the Rise
According to Advisor Authority, close to one third (29%) of all advisors and financial professionals say decreased profitability and client attrition are top practice management concerns related to the COVID-19 pandemic in the next 12 months. Advisors and financial professionals who expect profitability to increase in the next 12 months declined sharply, to just 54% in 2020, from 75% in 2019.
Moreover, the percentage of advisors and financial professionals who expect the profitability of their practice to decrease in the next 12 months has more than tripled, to 19% in 2020, compared to just 6% in 2019. Of the advisors and financial professionals who believe the profitability of their practice will decrease, more than two-thirds (68%) attribute it to the negative impact of COVID-19. Financial outlook is down sharply for advisors and financial professionals as well, with only 38% optimistic in 2020, compared to 50% in 2019.
Technology Enhances Practice Profitability and Client Experience
Over one-fifth (21%) of advisors and financial professionals say “adding new technology” is the most important thing they will do to enhance the profitability of their practice over the next 12 months. Technology to enhance the client experience is especially important, as adding new clients is consistently the number-one driver of profitability year over year.
Advisors and financial professionals are taking action to enhance the client experience, and with the pivot to social distancing and working remotely, the COVID-19 pandemic has accelerated their efforts. More than one quarter (26%) of advisors and financial professionals say providing a digital experience and self-service tools for clients is among their top concerns related to the COVID-19 pandemic over the next 12 months. Slightly less than one quarter (24%) say providing digital “Work From Home” strategy for employees.
Serving clients remotely is the most prevalent way technology will help better support clients over the next 12 months, according to nearly 4 in 10 (37%) advisors and financial professionals. This outpaced other top choices, such as freeing up time to focus on one-on-one relationships with clients (30%), providing more personalized holistic planning (28%), protecting clients’ assets from market risk (24%) and understanding and analyzing client feedback around their experience and expectations (24%).
Likewise, when asked which technology they are most interested in integrating over the next 12 months, “e-signature” solutions was added to this year’s list and rose to the number one-choice, selected by nearly 4 in 10 (39%) advisors and financial professionals. After topping the list for the past three years, tools for risk management (34%) dropped to the number-two spot, tied with mobile websites and/or apps (34%). Interactive website/client portal (31%) is also among this year’s top three.
Distinct Generational Differences
When addressing practice management concerns related to COVID for the next 12 months, there are some distinct generational preferences. When providing a digital experience for their clients, Millennial (27%), Generation X (24%) and Baby Boomer Advisors (26%) are closely aligned. But when providing work from home solution for their employees, Millennial advisors (31%) are more likely that Gen X advisors (22%) and nearly three times more likely than Boomer advisors (11%) to make this a priority. When it comes to e-signature solutions, more than half (57%) of Baby Boomer advisors are planning to integrate these into their practice, compared to slightly more than one-third of Millennial advisors (36%) and Gen X advisors (34%).
There are other distinct differences in the types of technology younger advisors favor compared to their more seasoned counterparts. Millennial (36%) and Gen X advisors (32%) are somewhat more likely than Boomer advisors (29%) to integrate mobile websites and/or apps. Millennial advisors (33%) are more likely than Gen X advisors (27%) and nearly twice as likely as Boomer advisors (19%) to integrate tax optimization software. Millennials (33%) are more likely than Gen Xers (27%) and almost three times more likely than Boomers (13%) to integrate Artificial Intelligence and/or data analytics. Millennials (24%) are more likely than Gen Xers (15%) and six times more likely than Boomers (4%) to integrate robo-advisors.
For more insights on the value of technology to protect profitability during the pandemic, advisors and financial professionals can also download the latest Advisor Authority infographic at:
About Advisor Authority: Methodology
The sixth annual Advisory Authority Survey was conducted online within the United States by The Harris Poll on behalf of Nationwide from May 27 – June 25, 2020 among 1,768 advisors and financial professionals and 817 investors, ages 18+. Among the 1,768 advisors and financial professionals, there were 758 RIAs, 642 Registered Reps, 500 Wirehouse and 165 other financial professionals. Among the 1,7658 advisors, there were 43 Generation Z (18 – 23), 759 Millennials (Ages 24 – 39), 679 Generation X (Ages 40 – 55), 277 Boomers (Ages 56 – 74) and 10 Matures (Ages 75+). Investors are statistically weighted where necessary by age by gender, race/ethnicity, region, education, income, marital status, household size, investable assets and propensity to be online to bring them in line with their actual proportions in the population. Respondents for this survey were selected from among those who have agreed to participate in Harris Poll surveys. Because the sample is based on those who were invited to participate in Harris Poll online research, no estimates of theoretical sampling error can be calculated.
About The Harris Poll
The Harris Poll is one of the longest running surveys in the U.S. tracking public opinion, motivations and social sentiment since 1963 that is now part of Harris Insights & Analytics, a global consulting and market research firm that delivers social intelligence for transformational times. We work with clients in three primary areas; building twenty-first-century corporate reputation, crafting brand strategy and performance tracking, and earning organic media through public relations research. Our mission is to provide insights and advisory to help leaders make the best decisions possible. To learn more, please visit www.theharrispoll.com.
Nationwide, a Fortune 100 company based in Columbus, Ohio, is one of the largest and strongest diversified insurance and financial services organizations in the United States. Nationwide is rated A+ by both A.M. Best and Standard & Poor’s. An industry leader in driving customer-focused innovation, Nationwide provides a full range of insurance and financial services products including auto, business, homeowners, farm and life insurance; public and private sector retirement plans, annuities and mutual funds; excess & surplus, specialty and surety; pet, motorcycle and boat insurance. For more information, visit www.nationwide.com. Follow us on Facebook and Twitter.