What Clients Really Want From Their Advisors, According to 4 Studies

Pinning down the qualities that investors really want in an advisor isn’t necessarily a straightforward task — and it’s more personal than some financial professionals may realize.

It’s a “complicated picture,” Morningstar says in a new report, “What Do Investors Want From Their Advisor?” Ironically, the firm adds, that’s good news for advisors.

Morningstar recently used four study approaches to glean what investors value, asking them in one to rank the characteristics they value and in another how much they would be willing to pay for certain services. 

Moving beyond those preset prompts, the research giant also asked investors to explain in their own words, anonymously, why they hired and have kept their advisor.

“These studies point to investors not being happy with a one-size-fits-all approach to financial planning; instead, they find value in personalized advice and the human touch advisors provide that technology cannot replace,” the report says.

The four studies shed light on investor preferences more than the ranking study alone, Morningstar suggests.

“Although behavioral coaching was not highly valued in the ranking study, it was perceived as valuable in the other studies. Investors were willing to pay money for advice based on their financial behavior and recognized they needed some help making better decisions to stay on track with their financial goals,” the report notes.

Four Major Themes

Based on the four studies, the firm identified four major themes representing qualities that clients value in a financial advisor. Two of those themes were present in all four approaches:

• Advice I can rely on
• Helps me achieve my financial goals

“Investors throughout all four studies wanted advice they could rely on. They were looking for an advisor who has the expertise to handle financial matters and who they could trust with their financial future and dreams,” Morningstar says.

Their responses “reveal this premium on reliable advice goes deeper than respecting the advisor’s expertise. Instead, investors value how they benefit from that expertise, both in terms of the quality of advice and how it makes them feel.” 

Clients expressed a desire for these attributes in different ways, depending on the study. 

“In open text responses, many investors measured the quality of advice according to how personalized it was to their specific needs. This echoed the amount of money investors were willing to pay for personalized advice, suggesting the importance of that expertise being attuned to their particular financial needs,” the report says.  

“Put simply, expertise matters when investors feel heard and understood.”

The two other major themes were found in some but not all studies:

• Keeps me on track
• Maximizes my return

In the willingness-to-pay study, the “keeps me on track” theme appeared as appreciating an advisor who reviews the client’s financial behavior to provide personalized recommendations; in the open-ended responses, it showed up as valuing an advisor who helps clients act in ways beneficial to their finances.

“These findings signal a positive change in advisors’ value proposition, as it aligns with tangible value-adds that advisors provide and helps advisors differentiate themselves from technology.

“However, advisors must be ready to think more about goals and personalization, while acting as a guiding hand for investors. In some ways, the future of financial advice may be less about investment management and more about investor management.” 

Here are the features that clients indicated they most value in each study.