Absolute Engagement Survey Reveals Major Opportunities for Financial Advisors to Build Deeper Relationships with Clients
TORONTO, July 13, 2023 – Absolute Engagement, a firm transforming the way advisors engage with clients and prospects, has released the compelling results of its 2023 investor research survey, developed in conjunction with the Investments & Wealth Institute. The survey, based on data collected from 1,000 client respondents between April 20 and May 1, 2023, provides valuable insights into the current state of advisor-client relationships and identifies areas for advisors to add value and grow.
Per this year’s survey, a noteworthy 92% of clients expressed some inclination to continue working with their current advisors. However, survey responses also uncovered frequently overlooked opportunities for advisors to bridge the gap between client sentiment and the level of service they receive. Absolute Engagement encourages advisors to take the next step and embrace transformative approaches to connect with clients and prospects on a deeper level.
“Traditional metrics have been the cornerstone of advisor performance evaluation for decades, but they are based on lagging indicators,” said Julie Littlechild, founder and CEO of Absolute Engagement. “To deepen relationships and improve advice engagement, our industry must prioritize understanding and supporting client needs as the true measure of success. Advisors who prioritize supporting clients’ life goals, not just financial goals, are poised to thrive in the coming decade.”
Satisfaction Gaps Are a Warning Light on Advisor Dashboards
The survey findings highlight key factors that clients deem important, but which receive lower “performance” ratings:
- Financial security: While 82% of clients say feeling financially secure is very important to them, only 52% strongly agree that they are financially secure (-30% gap)
- Control over financial goals: Although 75% of clients say feeling in control when it comes to reaching their financial goals is very important, just 51% strongly agree that they’re actually in control (-23% gap)
- Confidence in their ability to reach financial goals: While 74% of clients emphasize the importance of confidence in reaching their financial goals, only 53% are confident that they will actually reach those goals (-20% gap)
Investor Self-Confidence is Shaken
Absolute Engagement’s proprietary Self-Confidence Index, an integral part of the annual survey, provides the industry and individual advisors with a snapshot of how clients are feeling about their financial future and where they may need support. The survey reveals that 31% of clients currently have low to moderate confidence, in large part influenced by market performance and concerns about risk.
Advisors Who Focus Only on Finances Will Fall Behind
Advisors who focus on enhancing client confidence can positively impact traditional metrics and increase client satisfaction. According to Littlechild, “client self-confidence is an insidious form of risk because it is tied to satisfaction, loyalty and Net Promoter Score.”
Advisors have the potential to positively impact client confidence, satisfaction, loyalty and NPS by extending their focus beyond finances. Notably, 43% of clients cited the greatest benefit of working with an advisor as gaining a clear vision for the life they wanted in retirement. However, only about half of clients indicated that their advisor has helped them strategize or plan for non-financial goals such as health, fulfillment after leaving the workforce, quality time with family and friends, or new experiences such as travel.
“The research makes it clear that the advisors will need to deliver an experience that goes beyond providing good – or even great – service,” commented Tim Whiting, chief revenue officer for the Investments & Wealth Institute. “We believe that means getting inside the heads of clients to understand their true needs, delivering the services that respond to those needs and securing the certifications and designations to do so credibly.”
Creating a Powerful Referral Engine
Consistent with previous years, the survey indicated a considerable gap between the percentage of clients who are satisfied with their advisor (93%) and those who take the additional step to refer (35%). Age and financial acumen seemingly play a role in driving referrals, with younger clients and those with higher financial literacy more likely to recommend their advisors. Further, clients who are inclined to share their concerns with their advisors tend to make more referrals, underscoring the importance of deepening relationships to reveal client worries.
“While 35% is a very high number, the reality is that advisors typically report receiving referrals from fewer than 5% of their clients,” noted Littlechild. “This highlights another gap and an opportunity to translate referrals into introductions.”
This survey follows Absolute Engagement’s recent launch of the Engagement Engine, a quantum leap forward in empowering financial advisors to deliver an efficient and deeply engaging prospect and client experience. Empowering advisors to capture one-to-one input at each stage of the client journey in real time, the Engagement Engine’s core features not only reveal the perceptions, preferences and expectations of prospects and clients, but also delve deeper to reveal their needs, feelings and priorities.
ABOUT ABSOLUTE ENGAGEMENT
Absolute Engagement, founded by Julie Littlechild in 2014, empowers advisory firms to drive personalized engagement at scale. In addition to conducting on-going investor and advisor research, the firm provides innovative engagement technology that reveals the true needs of prospects and clients and allows advisors to respond in real time. The data generated through the Absolute Engagement Engine supports leadership teams in making better strategic and operational decisions.
Julie Littlechild is a recognized expert on the drivers of client engagement and a popular speaker on how client experience is being disrupted. She has worked with and studied successful financial advisors and their clients for more than twenty-five years. Prior to founding Absolute Engagement, Julie launched and ran one of the industry's leading research firms, focused on client engagement. She is the author of a popular blog and The Pursuit of Absolute Engagement. She has served on the national board of the Financial Planning Association, currently sits on an Investment and Wealth Institute advisory board, was twice identified as one of the 25 Most Influential People by Financial Planning and won an industry Influencer Award in practice management. She holds an MBA from the University of Toronto.
ABOUT INVESTMENTS & WEALTH INSTITUTE
Founded in 1985, the Investments & Wealth Institute is the premier professional association, education provider, and standards body for financial advisors. Through its award-winning events, publications, courses, and acclaimed certifications—Certified Investment Management Analyst® (CIMA®), Certified Private Wealth Advisor® (CPWA®), and Retirement Management Advisor® (RMA®) certifications—the Institute delivers world-class quality, highly-practical education to more than 30,000 practitioners annually in over 40 countries. Members of the Institute include the industry's most successful investment consultants, advanced financial planners, and private wealth managers who embrace excellence and ethics in applying a broad set of knowledge and skills in their daily work with clients. Learn more at www.investmentsandwealth.org.
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