Financial advisors spend noticeably less time on investment management and research than they did four years ago, in favor of more face time with clients, a new study says.
Across all channels, advisors last year spent just 17 percent of their time on investment functions, down from 20 percent in 2012, according to Cerulli Associates.
Advisors have shifted their priorities to client meetings and plan preparation.
But with a traditional focus on money management—and with fees based on assets under management--defining their value to clients could become more challenging.
“Framing their role as relationship-focused could be difficult for many advisors because their value proposition has historically been investment-centric,” said Emily Sweet, senior analyst at Cerulli, in a statement.
That’s not news to many advisors who’ve been offering more planning services to clients at a time when investment management has become more commoditized.
Cerulli suggests advisors continue down that path and further streamline their investment process by using model portfolios, outsourcing investment management and “weaving digital advice into their client relationships.”
The research firm said advisors need to position model management and outsourced portfolios as a starting point to their investment process, with room to tailor portfolios to suit individual client needs.
Close to 80 percent of advisors reported using models in some form, Cerulli said. By contrast, only 23 percent of advisors create custom portfolios for each client.