But IMCA’s research shows that there is space for the robos — IMCA’s respondents rated investment management strategies and expertise as the most valuable competencies their advisor could have, beating out insurance solutions, tax planning, and even holistic financial planning.
“If an investor is paying you, they should be able to expect you to deliver on an asset-based fee,” Walters says. “You should be able to do asset management at a very high level. There’s lots of room for that investment advice. Longer term, the algorithmic technologies will support advisors with some clients, and handle the fundamental work with investments for lower-end clients.”
High-net-worth clients still hunger for tax advice. According to IMCA’s research, 80 percent of investors with $1 million or more in investible assets want their advisor to help them stay abreast of current tax law changes, but only 53 percent of investors fell like they’re getting those services from advisors.
“There’s a real disconnect on taxes,” Walters says. “I think advisors can look to technology to help them deliver this kind of advice. There’s already technology in that realm that does pretty well.”
IMCA’s research also reinforces the value of specialization via voluntary certifications — but not just any certification will do.
“Investors want an advisor who is confident and ethical and knows what they’re doing,” Walters says. “They aren’t as aware of the credentials in our industry as the advisors are, and they never will be, but they have some expectations that go above and beyond minimally licensed requirements. There’s a lot happening in the investment world today, a lot of change and innovation. Clients expect their advisors to stay up to speed on that.”
For the study, surveyors contacted 1,041 investors with at least $50,000 in assets during 2015.
Investors also argued that advisor certifications should:
- Require advisors to meet ongoing standards to maintain their credential (84 percent).
- Pull certifications from advisors who failed to meet ethical standards (85 percent).
- Have a rigorous set of standards for certification (82 percent)
- Be issued by an objective, third-party, nonprofit certifier (72 percent).