When thinking about the everyday responsibilities for financial advisors, tasks such as advising on investment decisions, aiding in retirement planning and crafting personal financial plans likely come to mind. However, financial advisors seeking to differentiate their practices — and outpace the growth of their peers — must extend their offerings beyond financial advice.
The most successful advisors function as mentors for their clients, improving their financial literacy and serving as a reliable support system.
Based on the findings from the latest Janus Henderson Investor Survey, 65% of investors working with a financial advisor are "very satisfied" with the quality of the relationship, while 33% are "somewhat satisfied."
While it's encouraging that most investors are happy with their advisor, we wanted to take a deeper look at what distinguishes "very satisfied" from "somewhat satisfied" investors. Our survey findings revealed that, to improve client satisfaction levels, advisors should look to expand their services and acknowledge how much psychology plays into their clients' financial success.
Many advisors serve a diverse pool of clients with a range of needs. As such, providing a consistent level of personalization to each client should be a top priority. Additionally, advisors shouldn't overlook the crucial role that confidence plays in empowering their clients, potentially affecting both their investment outcomes and satisfaction levels.
Research has shown that investors with high levels of confidence are more likely to adopt a long-term perspective and remain committed to their investment plans. This is despite inevitable periods of heightened market volatility that can lead to rash investor decisions. Investors who are confident in their approach are more likely to resist impulsive reactions to market fluctuations and remain disciplined over time.
A proven way to build clients' confidence is to improve their financial literacy. When looking at financial education, 56% of our survey respondents that are "very satisfied" with their financial advisor relayed that their advisor provides them with financial education; only 48% of those "somewhat satisfied" respondents received the same service. This shows a clear connection between offering financial education and client satisfaction levels.
Although clients are paying for their advisor's expertise, it is imperative for financial advisors to assist them in comprehending and applying an array of financial skills so they can feel confident they're on the correct path toward their long-term financial goals.
