And though young clients were more likely than their peers to report having had a financial planning discussion in the past 12 months, 49% remained less satisfied with the financial planning. In fact, the research showed that 36% gave their financial advisor or team average-to-low marks, compared to 29% of those over 55.
“Adding that additional value to that conversation certainly would create a much more memorable and compelling experience,” Lo said.
Pfeiffer added that younger investors want financial guidance, but they are looking for advice beyond investment advice. The key question for advisors, he said, is whether clients know what you are talking about when you are talking to them, and are you using those emotional intelligence (EQ) skills and engagement skills that may connect those dots?
The research further explained that the dissatisfaction level among younger clients might be because they reach out to advisors following a broader range of events and, as a result, receive a more varied and perhaps less consistent financial planning service. For example, it noted that 30% of younger clients contact an advisor after a pay raise, more than twice the percentage of clients overall; and a third reach out seeking help managing a trust.
When asked what is most important when selecting an advisor, both advisors and clients strongly agreed on financial planning expertise. However, advisors significantly overestimated the importance of age and gender. On a scale of one to 10, advisors gave a rating of 7 to the importance of age compared to a 4.5 rating from clients. As for importance of gender in an advisor/client relationship, advisors rated it 6.5 versus 3.5 for clients.
Lo views this as positive. “It certainly suggests there is more of a level playing field, so long as you do have that EQ and you focus on it, it doesn’t matter much that you might these generational gaps,” he said.
Additionally, the research noted that wealthy investors who have an excellent financial planning experience reported higher satisfaction and hold a higher share of wallet with their wealth manager. Overall satisfaction is 94% and share of wallet 70% among those who said their experience has been excellent. When the financial planning experience is not so good, overall satisfaction plummets to 32% and share of wallet 61%.
Researchers concluded that firms need to create a process to help advisors more clearly define what constitutes a financial planning conversation, and to include actions such as recording and reporting to clients the myriad of informal conversations that take place in between formal reviews.