New Research Finds Key Areas Where Consumers See Financial Advisor Value

Financial advisors, who are receiving an influx of first-time inquiries during the COVID-19 pandemic according to recent reports, are perceived to have varying levels of value among those consumers who seek their expertise, new research shows. That value can depend on very basic elements of the relationship, such as how often an advisor meets with clients, and how he or she approaches the conversation.

Those clients who receive a written financial plan, for example, report a higher level of confidence about their retirement than those who do not receive their formal plan in writing, according to new research conducted by Carson Coaching, a national financial advisor coaching and resource program under the Carson Group family of companies.

Additionally, 94 percent of the 1,000 individual consumers surveyed who knew how their advisor is compensated felt they received adequate value, versus only 82 percent of those in the dark about their advisor’s compensation.


“Some of the data challenged what I viewed as industry best practices,” said Jamie Hopkins, managing director of Carson Coaching and director of retirement research for Carson Group. “For example, value was strongly correlated with the number of interactions an advisor had with a client. Many of these interactions have had to shift to phone and videoconferencing due to social distancing efforts of late, but it just goes to show that human connection is key, especially in times of uncertainty or distress. The traditional once or twice a year reach out is simply not enough for most clients.”

According to the research, which comprised surveys of both consumers and advisors, fewer than half, or 40% of advisor respondents say they meet with clients 4 or more times per year. Yet advisors who interact with a client four or more times a year are 26% more likely to have a highly satisfied client than those who interact two or three times per year – and 43% more so than those that only interact once a year, the data showed.

The survey sought general input on financial advisor relationships, but the findings bode well for reverse mortgage professionals, Hopkins says.

“The advisors that are adding the most value to clients are the advisors that are leading with planning,” Hopkins tells RMD in an email. “The more the advisor looks at the client’s risks, develops a comprehensive plan, including product reviews of life insurance, the more the client feels at ease, confident about retirement preparedness, and that they receive value from the advisor. For reverse mortgage professionals this is good news, because advisors that have a more complete tool box of solutions, include home equity, and actually provide a retirement income analysis are likely to be perceived as more valuable from the client perspective.”

View the full survey results.

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  • While I appreciate the support of Jamie to the industry, I do not find the optimism Jamie does from this particular survey. If even one question dealt with client acceptance of reverse mortgages due to the encouragement of their financial advisors to look into reverse mortgages and the response were even marginally positive, my response would be very different.

    We have seen a marginally good response to the reintroduction of proprietary reverse mortgages into the market, demand is still weak for these products as seen by the withdrawal of, suspension of, and general reduction in maximum proceeds to proprietary reverse mortgages in the last few months.

    While there is nothing wrong with moderate exuberance regarding the change in attitude about reverse mortgages in a significant portion of the financial advisor community, remember this change was the result of a huge financial downturn. Based on my age and mentoring by so many WWI and WWII vets, I look at this change as something like what they called “foxhole salvation.” A genuine change in outlook but without much lasting root.

    When we look at the investor surprise at each of the five major bear markets from the Jimmy Carter era til now, one thing is clear. People forget the lessons of financial downturns very rapidly after they are over. We hear most investors say they will not make that mistake again but their actions are more like the following exchange from the movie, “Lost World Jurassic Park,” between Richard Attenborough (RA) and Jeff Goldblum (JG):

    John Hammond (RA) — “Don’t worry, I’m not making the same mistakes again.”
    Ian Malcolm (JG) — “No, you’re making all new ones.”

    Shore up your relationships with financial advisors now before the cash fears coming from this economic downturn are forgotten and financial advisors return to their “more comfortable” attitudes and outlooks (before the pandemic).

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