NEW YORK, NY, May 26, 2020 – Surprising gaps between investor expectations and firm delivery continue to challenge the wealth management industry and inhibit client value according to new research from the Money Management Institute (MMI) and Aon. Advisory Solutions: Expectations and Experiences debunks persistent myths about client attitudes and delves into these gaps, which are being amplified by the COVID‐19 crisis.
The first report in a four‐part series that highlights findings from a new, joint MMI‐Aon research program reveals a disconnect between investors and advisors on values‐based investing, with 76% of clients saying they seek to incorporate their values into their portfolios, but just 44% of advisors saying that clients express this preference.
“Investors have never been more in need of personalized advice and guidance,” says Craig Pfeiffer, President and CEO of MMI. “In today’s unprecedented environment, financial advisors have the opportunity to rejuvenate the planning process through a discussion of personal values. But by underestimating clients’ desires to align their investments with their values, they are missing a tremendous chance to improve client satisfaction and build share of wallet.”
Peter Keuls, Global Head of Wealth Management, Human Capital Solutions, at Aon, adds, “Taking the time to understand and respond to a client’s personal values is one of the most effective ways to strengthen the relationship and enhance the perceived value delivered by the wealth manager. We are pleased to work with MMI on this research that underscores the opportunity that firms have to better address investor preferences.”
Specific findings of the first report, entitled The Significance of Personal Values in Wealth Management, include:
- Advisors believe that clients think that integrating values into investment strategies will lower returns, so clients aren’t interested. To the contrary, the majority of clients feel investments aligned with their values will result in either the same or better returns and, even when returns are sacrificed, over half are willing to accept reduced returns to achieve alignment with their values.
- Aligning values drives client satisfaction and perceptions of provider value. When investor values are reflected in portfolios, overall satisfaction and financial planning satisfaction rise significantly. Investors are also twice as likely to rate their wealth manager as providing exceptional value for the fees they pay.
- A generational perception gap exists. The difference between what is important to clients and what advisors think is important can widen with age. Advisors over age 55 underestimate the importance clients attribute to most of their values, while advisors under age 45 can overestimate the importance.
Commenting on the findings, Mr. Pfeiffer adds, “Our hope is that this research will help the industry enhance the investor experience, and that advisors will find the insights valuable as they engage with clients in these challenging times.”
About Advisory Solutions: Expectations and Experiences: Expectations and Experiences is a four‐part series based on a proprietary research program produced by the Money Management Institute (MMI) in association with Aon. The series explores the gaps that have emerged between client expectations of advisory 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‐topeer 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, firstname.lastname@example.org, (646) 868‐8514
Robert Elfinger, Aon, email@example.com, (312) 381‐0071
Matthew Conroy, Peppercomm, firstname.lastname@example.org, (212) 931‐6133