What's Happening?
Financial advisors are facing challenges in getting affluent clients to utilize the full range of services they offer. According to the Cerulli Edge—U.S. Retail Investor Edition, advisors typically offer an average of 6.1 out of 11 financial planning services, with retirement income and accumulation planning being the most popular. Despite this, clients often focus on a limited number of services, primarily those related to retirement. John McKenna, a research analyst at Cerulli, notes that while services like estate planning are common among wealthier households, other services such as elder care and business planning are less frequently used. The gap between services offered and those utilized may be due to clients not associating certain
services with their financial advisors or not recognizing them as financial matters.
Why It's Important?
The underutilization of financial advisory services by affluent clients highlights a significant opportunity for advisors to enhance client relationships and satisfaction. By effectively communicating the breadth of services available, advisors can differentiate themselves in a competitive market. This is crucial as satisfied clients are more likely to perceive the value of advisory services as worth the expense. Bridging this gap can lead to deeper, long-term client relationships, which are beneficial for both parties. Advisors who succeed in this endeavor can potentially increase their client base and improve client retention, ultimately impacting their business growth and stability.
What's Next?
Advisors are encouraged to proactively communicate with clients about the services they offer, aligning these services with clients' financial goals and priorities. This involves conducting in-depth discovery meetings to understand clients' complete financial pictures and how they manage non-investable assets. By recommending in-house or trusted third-party services for less commonly used services like elder care, advisors can build greater trust and deepen client relationships. This strategic approach could lead to increased client engagement and utilization of a broader range of services.
