NEW YORK, NY, July 26, 2021 – The Money Management Institute (MMI) and Aon have released new research from the second tranche of their Advisory Solutions: Expectations and Experiences series. According to the first report in this year’s four-part series, 52% of investors surveyed between January and February 2021 reported that the value of investment advice has increased – and nearly a quarter of investors under 45 report having had their first financial planning discussion during the pandemic.
“Navigating the pandemic along with a myriad of other events fueled an unprecedented level of uncertainty – pushing many individuals to seek professional financial advice – some for the first time,” said Craig Pfeiffer, President and CEO of MMI. Peter Keuls, Global Head of Wealth Management at Aon, added: “It’s important to keep in mind that financial advice is not a one-size-fits-all solution. Addressing the unique needs and motivations of each investor is critical in optimizing the planning process.”
The study found that:
- Demand for financial advice is increasing. More than half (52%) of investors say that the value of financial advice has increased post crisis and one-quarter (25%) of clients under 45 report having had their first financial planning discussion during the pandemic.
- Less than half (43%) of investors report having a planning discussion with their advisor in the past year. Despite the significant increase in the perception of the value of advice, the proportion of those having a planning meeting decreased slightly from 44% in 2020.
- A discrepancy exists between client sentiment versus advisor perception regarding the importance of topics covered during financial planning discussions. Clients placed greater value than advisors (72% versus 53%) on reviewing projected retirement income versus projected living expenses, estimated retirement living expenses (72% versus 51%), and current expenses/savings and investment goals (70% versus 51%). Advisors rated all of the topics listed as nearly equal in importance.
- Personal values have increased in importance to clients as part of financial planning discussions, but advisors still underestimate the importance of some values to clients. Human rights (60%), social justice (54%), and global environmental protection (51%) were rated by clients as the most important personal values. Diversity, equity and inclusion (44%), sustainable corporate practices (41%), arts and culture (32%,) and corporate governance (30%) were values rated less important by clients.
Commenting on these findings, Pfeiffer said: “Our hope is that the study will not only underscore the importance of financial planning, but also the complexity and unique needs that have to be addressed to deliver a high-quality experience.
About Advisory Solutions: Expectations and Experiences: Now in its second year, Expectations and Experiences is a four-part series based on a proprietary research program sponsored by the Money Management Institute (MMI) in association with Aon, that explores the gaps that have emerged between client expectations for investment advice and solutions and firm delivery, and why these gaps are undermining client satisfaction as well as business performance.
About the Money Management Institute (MMI): Established in 1997, the Money Management Institute (MMI) is the industry association representing financial services firms that provide financial advice and investment advisory solutions to investors. Through conferences, educational resources, and thought leadership, MMI facilitates peer-to-peer connections, fosters industry knowledge and professionalism, and supports the development of the next generation of industry leadership. MMI member firms are dedicated to helping individual and institutional investors, at every level of assets, plan for and fulfill their financial goals. For more information, visit www.MMInst.org.
About Aon: Aon plc (NYSE: AON) is a leading global professional services firm providing a broad range of risk, retirement and health solutions. Our 50,000 colleagues in 120 countries empower results for clients by using proprietary data and analytics to deliver insights that reduce volatility and improve performance.
Kelly Caporale, Money Management Institute, email@example.com, (646) 868-8514
Robert Elfinger, Aon, firstname.lastname@example.org, (312) 381-0071