The changing trends in consumer needs from investment advice

By Christina Bentley on August 23, 2018

A survey discovered the changes in what people need from investment financial advisers.

Recent data suggests that changes in consumer needs and expectations are having a real impact on the financial advice market. As a financial adviser, you must find ways to respond to these changing trends with modern, high-quality products and services that help clients achieve their goals without losing the personal connections and traditional customer service that people want from their adviser.

The study

Financial service provider Accenture conducted a comprehensive, industry-wide survey, sampling 33,000 consumers around the world. The 2017 Financial Services Global Distribution and Marketing Consumer Study asked participants in 18 global markets to give their opinions on insurance, banking and investments – 10,000 survey respondents were targeted specifically to give their views on financial advice services.

The study found that shifting consumer preferences are presenting real challenges to financial advisers, many of whom struggle to adjust their approach and service delivery models. Survey results indicate significant changes in the ways that customers prefer to interact with financial advisers and that the industry is primed for disruption by emerging digital technologies such as automation.

However, those looking for financial guidance want more than just shiny new tech. Consumers still want to be able to trust their investment professional and these traditional values continue to play a major role in the adviser-client relationship. Financial advisers must find new ways to build trust and earn customer loyalty, striking a balance between innovation and convention.

Six consumer trends emerge

The Accenture study revealed six distinct consumer trends that will have a measurable impact on the financial advisory sector:

  • Personal data as currency
  • Younger clients embrace new delivery models
  • Automation adds value
  • High demand for personalised advice
  • New factors drive trust
  • Fluidity in communication preferences

1. Personal data as currency

Survey respondents said that they were willing to share personal information with financial advisers, but they expect value in return. In exchange for handing over their data, consumers want things such as a more personalised service, products tailored to their needs or favourable rates. Roughly 67% of consumers surveyed globally indicated a willingness to grant financial advisory firms access to their personal data if they knew that they would get benefits like this in return.

2. Younger clients embrace new delivery methods

Younger clients are comfortable with the presence of giant tech firms such as Google, Apple, Facebook and Amazon in most aspects of their lives, and this carries over to investment products. About 46% of survey respondents who identified themselves as “Generation Y” said that they would consider using an online service provider for financial planning help, citing the flexibility, personalised service and highly responsive nature of digital platforms.

3. Automation adds value

As technology continues to become integrated into daily tasks, many consumers are willing to allow automation to make investing easier. In the Accenture study, 78% of respondents said that they would be open to receiving financial advisory support from a totally computer-generated system as long as they knew that the service was tailored to their individual needs. The main takeaway here is that consumers are looking for ways to take more control of their financial future, with convenience and speed as the driving factors.

4. High demand for personalised advice

Almost three-quarters of respondents indicated a desire to receive money advice and planning that was relevant to their particular stage of life: getting married, buying a home, setting money aside for children, preparing for retirement, etc. In exchange for this personalised advice, consumers are willing to trade their data if they believe it will help an automated system recommend tailored products and services.

Similarly, respondents also want to be able to ask questions of their human financial advisers in an effort to obtain individualised financial investment advice. About 28% of consumers place a significant value on open collaboration with their adviser in order to create a personalised plan to help achieve their financial savings goals.

5. New factors drive trust

It’s no secret that consumers across industries are embracing data-driven technology. For financial advisers, this means that building personal relationships with clients is no longer enough to earn their trust. Consumers want to know that their personal financial consultant has their best interests top of mind, and roughly 40% of respondents cited this as the main driver of loyalty in the adviser-client relationship. People also want to know that the personal data that they exchange for individualised service will be protected by their chosen financial advisory firm – 35% of consumers indicated that this factor was key in building loyalty.

6. Fluidity in communication preferences

There’s an increasing openness among consumers when it comes to their communication preferences. Nearly 60% of Accenture’s study participants indicated no real preference for how their financial adviser gets in touch with them to offer support or share information, whether it’s email, text message, social media, online chat, phone call or in-person meetings. What does matter to consumers, however, is that each interaction is easy and effective.

What this means for financial advisers

Responding to these changing consumer trends can be a challenge for financial professionals. Different kinds of investors want different things, so it’s important to take the following into consideration:

  • Reinventing the financial adviser role to deliver more value to clients
  • Making good use of data that clients are open to sharing with improved analytics
  • Delivering a personalised service at competitive prices without sacrificing quality

What is a financial adviser to do when faced with shifting consumer trends that disrupt conventional service models? The key seems to be an openness to integrate new and emerging technologies that help make the consumer experience easier and more personalised while continuing a commitment to the traditional values of trust, loyalty, responsibility and honesty that have long been the foundation of sound financial advice.

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