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Mind the Gap Between Clients' Desires and FA Offerings

April 10, 2017

Wealthy clients often have very different opinions than their advisors themselves on what makes a good advisor. And if advisors don’t address these gaps, their clients may go elsewhere, according to an article in Investor’s Business Daily.

Citing a new study by the CFA Institute, the newspaper says advisors and their rich customers mostly agree on the importance of professionalism, transparency and avoiding lawsuits.

But gaps remain. For instance, 93% of advisors say clear communication is essential to be a successful advisor, while only 53% of wealthy clients think so. Same goes for integrity: 86% of advisors cite that as a key trait of a successful advisor but only 60% of clients say as much. And while 71% of advisors say financial acumen is vital to be good at their jobs, only 51% of their clients agree, according to the CFA Institute’s sampling of 1,370 North American FAs and 4,000 wealthy individuals.

Bridging these gaps calls for effort by advisors, the CFA Institute’s Bob Dannhauser tells Investor’s Business Daily.

To align themselves more firmly with clients, advisors should look for ways to provide services — such as philanthropy, tax and estate planning — that go beyond investing and basic financial planning, Dannhauser tells Investor’s Business Daily.

FAs could also bridge perception gaps through education, says Dannhauser. Specifically, they can provide more guidance to clients about avoiding undue risk and help clients see how markets behave over the long run.

By Alex Padalka
  • To read the Investor's Daily Business article cited in this story, click here.