In my daily conversations with financial advisors over my 20 years in the industry, I’ve observed their reactions to market pullbacks, major national and world events and multiple election cycles. In many ways, no matter what the differing circumstances, the conversations have had a similar tune.
But as we enter year two of the coronavirus pandemic and the unique disruptions it’s wrought on our industry, I’ve found that advisors and their clients have evolved in surprising — even counterintuitive — ways.
Here is some of what I’ve been seeing.
Change = more stability
I’ve certainly observed more philosophical thought processes come into play as advisors consider their priorities, lifestyles and the future of their practices. From a recruiting perspective, on the independent contractor side, we’re continuing to see growing interest from advisors who clearly had never considered independence before. They’re exploring more options now, realizing there is flexibility out there for their work/life balance and opportunities for true ownership and design of their business.
Believe it or not, I’m hearing from many recruits that the reason they are looking to move is to gain more stability. That might seem counterintuitive, but if you think about it, we’re seeing quite a bit of disruption in all aspects of our industry. I’m hearing from recruits that the consolidations, pressures put on payouts or cross-selling policies at their current firms are driving them to consider other options. And, they’re willing to make a change for more long-term stability and cultural alignment.
That philosophical mindset isn’t limited to those considering a move. I’ve increasingly heard more from advisors that 2020’s surprises have motivated them to solidify their catastrophic plans. It’s become a priority this year, as advisors want to provide peace of mind to their teams, clients and their families, ensuring they will all be well taken care of and in good hands should the unexpected occur.
Change = more options
You’d think that a global pandemic and the uncertainty it’s caused would deter advisors from moving — or prompt more tenured advisors to want to retire sooner. But we’re seeing the opposite.
Initially, many advisors put everything on hold when the pandemic hit home in the U.S. last March — including plans to move. That shifted, and in fact we recruited more advisors at the end of our fiscal year than we did at the beginning. I think that momentum will continue in 2021 as we become more accustomed to, and continue to embrace, our current environment.
When the pandemic started, we also expected some experienced advisors to consider expediting their retirement. But that didn’t end up being the case. Citing clients’ need for human advice during this time and into the near future, some advisors have expressed that they’re simply not ready to retire, and want to continue serving their clients.
Change = more comfort with tech
I recently spoke with an advisor who told me their 102-year-old client just used eSignature with no complaints or issues at all! That’s an amazing example of how the pandemic has changed our society’s level of comfort with technology.
The accelerated adoption of technology has really changed the client experience, and I think only for the better. It’s so important that firms and advisors continue to develop and embrace technology that enables increased mobility for advisors and clients. Having the technology in place well before this long-term, work-from-home environment began was an incredible benefit, but now that our society has become more comfortable with technology adoption, it’ll drive the expectation for innovation even higher, which will benefit clients and our profession in the long run.
Change = more evidence of client loyalty
Aside from the increased technology adoption, advisors are reporting that their clients are more available. Clients seem incredibly responsive and are signing and returning forms quicker. The retention rate of clients that they’re citing during this period of time is as high — if not, higher — than it’s been in the past. Given the uncertainty with the pandemic, school planning and more, clients seem less willing to go without their trusted advisor for any period of time.
The future
No one knows how long this pandemic and the uncertainty it has caused will last, but one thing history has shown us is that volatility always presents unique opportunities. Still, it’s important for advisors to help safeguard their practices from potential volatility down the road by doing all they can now to prepare for what may lie ahead.
That includes conducting a holistic business assessment, particularly when there are new changes to our environment; enriching their wealth management offering to provide more value; proactively managing the client experience in scale, including considering segmentation and client base tiers; and revisiting all client touchpoints — from regular communication, to websites, to social media and more — to ensure they are consistent, relevant, and meaningful.
A year from now, I’ll look back at this time period and feel incredibly proud of what we’ve all accomplished as a firm and an industry. We’ve adapted well — and quickly — shifting virtually everything so that we could still work efficiently together with each other and with clients in a remote environment, and for such an unforeseen amount of time. We’ve found that we can translate client meetings, conferences and home office visits to virtual formats and still be effective and engaging. And though I’m looking forward to resuming those in-person meetings and conversations, I’m so proud of how we have adapted to stay connected and keep growing during these uncharted circumstances.