Financial Planning Boosts Client Satisfaction: Study

High-Quality Financial Plan

According to the report, younger investors who came of age during the 2008 financial crisis and now have to confront the effects of the pandemic recognize the importance of fiscal responsibility and are showing a high level of interest in forward planning. Clients over 55 are likelier to have regular portfolio evaluations; nearly three-quarters say they had an annual review in the past year.

The report says this may be why, on average, advisors rank a variety of planning topics as relatively equally important, including these:

Projected retirement income vs. projected living expenses: 53%
Estimated retirement living expenses: 51%
Current expenses/savings and investment goals: 51%
Future spending and savings alignment with financial goals: 53%
Risk management strategies: 52%
Future health care needs: 52%
Dependent care responsibilities: 49%

Nuances appear when examining clients' perceptions by age group. Those in the 45-to-55 age group who have existing financial commitments and may be contemplating retirement consider it important to lay a solid foundation with a holistic financial plan. To them, most financial planning topics should be part of a planning conversation.

For investors under 45, future health care needs and dependent care responsibilities are top priorities. They understand that addressing these issues today will lessen the potentially costly burden tomorrow.

Reflecting Clients' Values

Aon and MMI found that some advisors are making financial planning more meaningful by reflecting clients' values in their investment strategies. Values can markedly improve the overall client experience and satisfaction with specific touch points and services.

The difference in satisfaction is particularly stark in a comparison between clients who feel their values are reflected and those who feel they are not, the survey findings showed.

The research shows that clients of advisors who initiate a values-based discussion are likely to recommend the firm or advisor to a personal or professional connection. Three-in-five advisors say they have always integrated values across their clients' investments as an important way to bolster their relationships.

Another third of advisors note that they have changed their views around values-based investing in the last six months.

According to the report, 67% of advisors say they always bring up values as part of their financial planning process, but 28% say they bring it up only if they sense that values are important to their client. These figures are in line with 2019 results, which may suggest that advisors are still relying too heavily on their intuition, the report said.

The findings show that recent events have caused 46% of clients over 55 to place higher importance on reflecting their values across their portfolio, compared with just 10% of those under 45.

Between 2019 and 2021, diversity and inclusion has become more pronounced in importance to older investors, although other issues, such as human rights and social justice, remain most important to them.

Younger clients feel strongly about the need to integrate environmental, social and governance values into their portfolios. Sixty-three percent of investors under 45 say they have always seen integrating their views around values and investments as very important, compared with 16% of those over 55.

However, investors over 55 have experienced the greatest mindset shift in the last 12 months, the report said, suggesting that younger clients' viewpoints are now becoming more mainstream.