Uncategorised
Financial Advisors Dissatisfied With Business Model: Survey
Only 10 per cent of financial advisors questioned in a new survey said they feel their business strategy is currently sound and one-third said their business model needs to change, although they weren’t sure how.
The survey of 1,800 independent financial advisors was taken last November by Curian Capital, a wealth management platform outsource provider, and released on Tuesday.
The widespread dissatisfaction of the advisors was attributed by Dan Maurer, senior vice president of marketing for Curian, to the stresses on their business following the post-September 2008 financial crisis.
“Clients were putting more demands on them and questioning why they were paying somebody while their assets were going down,” Mr Maurer said. “Advisors are analyzing their revenue streams and the services they offer and want to establish a process so they can optimize their business model.”
Specifically, advisors said they wanted to improve their firm’s marketing and portfolio construction for clients, according to the survey.
In fact, marketing was named the top business support survey respondents said was either important or very important to their business. This was followed by account development, developing a business plan and profitability analysis.
“Advisors are looking for ways to brand themselves and what they do,” Mr Maurer said. “They’re looking for ways they can tell their story and distinguish themselves in the marketplace.”
As a result of the financial crisis advisors also said they have changed the ways they constructed portfolios.
Slightly over half of the respondents said they have become more tactically oriented; an equal number said they were incorporating guarantees into portfolios, while 42 per cent said they were accepting lower return for less risk and 41 per cent said their client portfolios had become more defensively oriented.
“Advisors are moving beyond strategic asset allocation to pro-active decisions on asset classes that are either over-weighted or under-weighted,” said Chris Rosato, senior vice president of strategic development for Curian. “They want a broad range of investment solutions to create optimal portfolios.”
