Benefits May 16, 2006

Investors to Advisors: Show Me the Advice/Guidance

May 16, 2006 (PLANSPONSOR.com) - A new survey from Advisor Software (ASI) has found that investors getting more involved with their financial holdings increasingly demand more personalized service from their advisor.
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A news release from the Lafayette, California firm said that advisors have to spend more time with clients educating them about new investing strategies as well as various investment products such as Exchange Traded Funds (ETF).

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The survey found that investors are interested in a wide range of investment vehicles:

  • 73% of Registered Investment Advisors (RIAs) say that investors are very interested in ETFs. However, 85% of those RIAs agree that investors are not knowledgeable about ETFs.
  • One-third of advisors find that investors are interested in hedge funds.

Additionally, 64% of advisors find that retirees are willing to take higher risks compared to 10 years ago.

The result, according to ASI, is that RIAs are spending more time servicing existing clients and less time cultivating new ones. For example:

  • 67% of RIAs agree that investors are more savvy today and require special handling.
  • 52% of RIAs feel that the reason investors turn to advisors is because they are looking for personal attention.
  • RIAs agree that the most common challenge they face is finding new clients (37%).

“Our survey confirmed that investors today, especially Boomers, are very interested in hot new investment vehicles like ETFs, but they really don’t know much about them,” said Neal Ringquist, President of ASI, in the news release. “At the same time these investors are becoming more focused on and engaged with their finances, requiring advisors to spend even more time advising and educating them. Consequently, advisors end up spending less time developing new client opportunities, which is vital to their continued success in an increasingly competitive profession.”

The survey, which was conducted electronically by THUNDER FACTORY Research on behalf of ASI, was sent to 5,053 registered investment advisors. The survey was conducted between March 2 and March 15, 2006.

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