Facing a profession in a state of rapid change, financial advisors are already overburdening their emotions and intellect—but the pressures of Covid-19 have made things even more stressful.
Some advisors are burning out, said Jennifer Tarsney, director of New York Life Investments’ Advisor Advancement Institute (AAI). The AAI is dedicated to helping advisors identify new ways of doing things, conducting proprietary research around industry and demographic issues and, based on that research, issuing recommendation for best practices to grow advisory businesses and improve the client experience.
Before the pandemic, changing client demographics were one of the leading stressors for advisors, said Tarsney.
“What burns out advisors in a normal scenario is the amount of client contact needed these days to keep clients happy,” she said. “The work we’ve done with women clients shows that they are requiring more and more proactive contact from their advisor to really feel satisfied. Advisors, in general, are struggling to keep up with these new expectations.”
Then, Covid-19 forced almost everyone—advisors, clients, support staff, prospects, third-party vendors—to work from home. With their team dispersed, an advisor couldn’t walk down the hallway or poke his head in another office to ask a question or have a conversation. In a virtual, work-from-home environment, advisors often have to stop what they’re doing to track someone down and have a conversation, said Tarsney.
Tasks and workflows that require multiple people take longer with a dispersed workforce, said Tarsney, so where possible, advisors often take on more responsibilities themselves. “That’s leading to a sense of being overwhelmed—at the end of the day it’s 5 o’clock and you haven’t gotten through your to-do list.”
Changing Roles
The changing role of financial advisors has also taken a toll. When most advisors first got into the business 20 to 35 years ago, their main focus was on managing investments.
Today, more advisors primarily serve as wealth and life coaches, and many delegate investment management to another internal staff member or department, our outsource it to a third party.
“The advisor’s value is now in connection with the client and helping them with whatever they need, and financial planning is a huge part of that,” said Tarsney. “Now advisors are being relied upon to provide advice with big topics that face families with money, and that’s become more time consuming than just managing their investments.”
Providing these services creates a valuable emotional bond between advisors and clients, households and families, but it also takeks an emotional toll, said Tarsney.