Despite all of the talk about fee compression, financial advisors should not be quick to lower their fees, according to Janus Henderson, an American-British global asset management group headquartered in London.

Although many advisors fear robo-advisors will force them to curtail fees in order to compete and some already have done so, fees seem to be holding steady, Matthew Sommer, head of defined contribution and wealth advisor services for Janus Henderson, said during a webinar Friday. The wide-ranging Janus Henderson presentation focused on what advisors can expect for the coming year and more.

“Most advisors still base fees on AUM or AUM plus another factor,” Sommer said.

In addition to holding fees steady, advisors will need to embrace behavioral finance in order to serve clients well, Sommer said.

“Advisors will need to decide on a retirement strategy for their clients depending on the psychological inclinations of the clients,” Sommer said. Clients’ behaviors diverge around “opportunity versus risk versus commitment,” and an advisor needs to know where each client falls on that spectrum. “Advisors also need to determine if a client is better suited to a bucket list approach or a total return approach.”

Many advisors gravitate toward one or more of the following approaches, based on the advisor’s training, subjective norms, prior experiences and expectations for the future: total returns, time segmentation or income floors through the use of guaranteed income products. “As an alternative, researchers suggest that different approaches will resonate with different clients,” Janus Henderson said in a statement.

“If the right approach is implemented, clients will ‘buy in’ and be more likely to stay the course, particularly during short-term periods of investment disappointment,” the firm continued. “Advisors, therefore, should be open to all approaches, and offer recommendations that match a particular client’s unique psychological makeup.”

“In addition, there is a lot more involved with working with a client than just considering returns,” Sommer added. “The value of professional advice is in helping clients deal with life events.” Life events prompt people to review their lives and decide on what changes they need to make, he said. “There is a positive link between life events and adopting new, needed habits when a financial advisor is involved."

Looking at portfolio construction for the future, Sommer said, “growth stocks have outperformed value for a decade; now value outperforms growth. The best place to be is a blend of the two. Domestically, Janus Henderson likes mid-caps and internationally the firm prefers large cap.”

The one topic on everyone’s mind is inflation, he said. To combat inflation, Sommer said Janus Henderson is advising clients to turn to real estate, and, more specifically, to REITs.

Although many clients are coming to value ESG factors in their investing, “most advisors are still trying to figure out how this plays out in a portfolio. One in five clients have already adopted ESG and another 15% plan to adopt ESG within the next 12 months,” Sommer said. “Females, non-whites and younger investors appear most likely to adopt or plan to adopt ESG.”