Op-ed: Here’s how financial advisors can navigate investors through uncertainty

Advisors

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In a world that’s rapidly changing and becoming more uncertain than ever, the financial advisory industry has a great opportunity to become a beacon of trust for investors by helping them navigate through difficult life and financial decisions.

The Covid-19 pandemic, combined with the social and economic shifts over the past few years, has impacted every aspect of life and shifted consumers’ expectations of business. In fact, businesses are now more trusted than the government, and there is a new mandate for business leaders to take action on critical societal issues, according to the recent Edelman trust survey.

Further, the pandemic led to a serious evaluation of life priorities, causing many to change careers, relocate, leave the corporate life altogether or opt for early retirement.

In many respects, these critical life changes, combined with increased uncertainty and volatility in the economic environment, have fueled a renewed need for financial advice.

Business is booming for financial advisors, as new clients pour in, seeking not just financial advice but also a trusted advisor on critical life decisions. The opportunity for the financial services industry to regain the trust lost during the financial crisis and establish the financial advice profession as both a valued source of information and guidance for investors, as well as a career of choice for future generations, has never been greater.

Yet capitalizing on this opportunity to build long-term trust will require firms taking deliberate steps toward deepening client relationships now to help guide them through the most critical life decisions and help them build financially secure futures.

Here are five things advisory firms can do now to achieve that:

  1. Offer more than financial advice. Wealth management is no longer just about finances; it is about helping clients make sound life decisions — especially right now, with millions changing jobs during what’s becoming known as the “Great Resignation.” In many ways, advisors need to act as life coaches, guiding clients through critical decisions in life as they navigate a highly complex world. We are increasingly seeing advisors considering adding psychologists or life coaches to their staff to help clients make these difficult choices. By being able to talk more than dollars and cents, advisors not only enhance their value, but also demonstrate that they truly care about clients.
  2. Build multi-generational relationships. To retain business for the long-term, advisors should broaden their relationships beyond the main client. Consider planning and engaging in family meetings to help achieve even greater success with the entire family, particularly the next generation of investors and potential clients. By focusing on the ongoing dynamics of all members of a client’s inner circle, advisors can create actionable and effective roadmaps for wealth management. Building these relationships is all the more possible now given that many young adults are living at home with their parents.
  3. Communicate, communicate, communicate. It is critically important to be visible to clients and prospects with the right message at the right time. Successful advisors take an omni-channel approach using both traditional and digital channels to communicate with clients. Regular check-in emails and occasional texts with useful information, as well as ongoing social media engagement to meet clients where they are and better understand their concerns and lifestyles, are all critical in delivering more targeted and more meaningful advice.
  4. Become a destination for the full wealth journey. Advisors should offer solutions designed to meet client needs at every stage of life. Help early stage investors who are starting off careers or have recently changed career paths by leveraging digital tools, free budgeting and benchmarking solutions so you can build long-term relationships and be there with them all along the wealth journey. For wealthy clients, offer solutions to help them protect and transfer wealth by providing access to other business specialists in your “orbit of expertise.”
  5. Be a client advocate. Advisors should take every day as an opportunity to demonstrate to clients that they are always watching out for their interests. For advisors working in a fiduciary capacity, this may seem like an obvious point. However, your legal structure means little to clients unless they feel that you care for their well-being. Ask your clients the extra questions, get to know them inside out, understand their concerns about life, family and careers, and be their best advocate through their entire life journey.

And perhaps most important, remember that trust takes years to build and seconds to break. Treat every client relationship with the care, respect and attention it deserves: Every. Single. Day.

— By Ben Harrison, co-head of wealth solutions at BNY Mellon Pershing