82% of Americans are nervous they will be impacted by a recession in the next yearNew MDRT study reveals that consumers are ‘somewhat nervous’
PARK RIDGE, Ill. (Nov. 20, 2019) — With news of the yield curve inversion and the presence of additional economic indicators, many experts are warning consumers of a pending recession expected to hit before the 2020 elections.
A recent study conducted by MDRT shows the majority of Americans (82%) are at least somewhat nervous they will personally be impacted by a recession in the next year or so. High tensions and a split in understanding the financial implications mean financial advisors can refer to the general consumer sentiment to inform their planning and client communication strategies.
A looming recession is an opportunity for advisors to connect with clients considering nearly a third (32%) of survey respondents with an advisor say their dependence on their financial guidance would increase in a time of uncertainty and 56% say it would stay the same. Engaging with professionals who can help evaluate exact portfolio outlooks and adjust accordingly plays a key role in instilling consumer financial confidence. The MDRT study also found that over three-quarters (84%) of Americans with advisors report they feel more confident in their financial future after a meeting.
“In times of economic uncertainty, advisors are sources of reassurance and should use this as an opportunity to support their clients,” said Regina Bedoya, CLU, ChFC, MDRT President. “By proactively reaching out with actionable strategies to prepare for a recession such as increasing savings, they can help calm the nerves often induced by the financial news cycle.”
Over half of Americans with an advisor would like them to reach out with advice tailored to their plan by phone or email (53%) and proactively meet with them in person to discuss the implications (51%) if a recession occurs in the near future. Breaking through the information overload often associated with financial news by evaluating their clients’ communication preferences will help advisors understand how to most effectively reach them.
To get in front of these economic changes, advisors must keep pace with the trends at the forefront of the industry. As such, attendees at the 2019 MDRT EDGE meeting explored the state of the economy, best practices for leveraging emotional intelligence to communicate complex financial events like the recession and how to showcase the value proposition of working with a financial advisor.
New Prospect Opportunities
Consumer concerns about the looming recession open up new prospecting opportunities for advisors. In fact, over half of respondents without advisors (62%) indicated a significant change in their household income, assets or wealth would be a catalyst for seeking the help of a financial advisor. Strategies to connect with prospects should be adjusted accordingly based on an understanding of how consumers are searching for trusted and qualified advisors. The top method Americans with advisors used to initially find their advisor involved relying on family members and friends for referrals (49%), followed by a web search (13%). As a potential recession approaches, advisors should ensure their clients are strong advocates and their websites are up and running.
A professional who is positioned as someone contributing to improved consumer sentiment and confidence during economic uncertainty will elevate their role and credibility in the financial services industry. To learn more about these findings, visit the MDRT Media Room.
Survey Methodology: The survey was conducted by G&S Business Communications on behalf of MDRT. G&S conducted an online snap poll of 1,048 consumers in the United States ages 18+. The survey was conducted October 21, 2019.
Founded in 1927, Million Dollar Round Table (MDRT), The Premier Association of Financial Professionals®, is a global, independent association of more than 72,000 of the world’s leading life insurance and financial services professionals from more than 500 companies in 70 nations and territories. MDRT members demonstrate exceptional professional knowledge, strict ethical conduct and outstanding client service. MDRT membership is recognized internationally as the standard of excellence in the life insurance and financial services business. For more information, please visit www.mdrt.org and follow them on Twitter @MDRtweet.