At least two-thirds of the nation’s investors work with a financial advisor, but one-third of them said their professional was nowhere to be found during the pandemic, according to a new study by J.D. Power.
The J.D. Power Wealth Management Insight report is based on data from a survey conducted in May and June. It includes feedback from more than 521 individual investors on their experiences and perceptions since the emergence of Covid-19.
According to respondents, their financial advisors were slow to offer guidance to clients, if they offered it at all.
Nearly two-thirds of respondents (62%) said they worked with a financial advisor. Among that group, 31% said they had not been in contact with their advisor in the three months since Covid-19 pandemic emerged in the U.S.
In contrast, 28% said they had heard from their advisor at least once; 23% said they had been in contact with their advisor at least twice; and just 18% said they had heard from their advisor three or more times.
J.D. Power said that while advisors are often viewed as counseling investors to “stay the course” and avoid taking any rash actions during difficult markets, investors having advisor contact since Covid-19 were much less likely to say they would do nothing with their portfolio as a result. In fact, investors with recent advisor contact were twice as likely to say they planned to rebalance their portfolio in response to Covid-19 impacts (32%) versus those that said they would keep their portfolio unchanged (16%).
As many states began to go into lockdown, and people began sheltering at home, most of the world began to lean heavily on technology, such as video conferencing, in order to resume their personal and professional lives. A recent J.D. Power survey conducted during the first few weeks of the lockdown found that 73% of Americans said they had used online meeting platforms. Of that percentage, one-quarter (25%) said they used three or more platforms.
In contrast to those findings, J.D. Power found in its latest study that financial advisors did not take advantage of technology available to them to communicate with clients; instead, they relied on their telephones and email. Nearly three-fourths of respondents (71%) that work with an advisor said they had been in contact by phone, while 55% said they contacted their advisor by email. Just 12% said they had engaged with their advisor by video conferencing.
J.D. Power said that trend may be intentional since 71% of clients said they wanted their advisor to contact them by phone and 57% said they wanted their advisor to contact them by email. However, J.D. Power said, advisors that do not make better use of emerging digital channels may miss an opportunity to engage with their clients in ways that are no longer possible during the pandemic.
Two-thirds of respondents that said they work with an advisor (66%) agree or strongly agree that they are on track to achieving their long-term goals, but J.D. Power contended that doesn’t mean advisors haven’t missed a golden opportunity.