New Research from Money Management Institute and Aon Uncovers Gaps Between Advisors and Investors on Perception and Frequency of Financial Planning Discussions: Younger Investors Least Satisfied with Their Planning Experience

Thursday, June 18, 2020

New joint research from the Money Management Institute (MMI) and Aon finds that less than half of financial advisory clients believe they have had a financial planning discussion with their advisor over the past 12 months. This points to a perception gap between financial advisory professionals who feel they engage in planning discussions much more frequently. In addition, the study finds that younger investors tend to be much less satisfied than investors over age 45 with the planning discussions they do have.

The findings are from the second release in a four-part MMI-Aon research series that examines surprising gaps between investor perceptions and firm delivery that continue to challenge the wealth management industry and inhibit client value. The Advisory Solutions: Expectations and Experiences research debunks persistent myths about client attitudes and delves into these gaps, which are being amplified by the COVID-19 crisis.  

“Nobody disagrees on the importance of the financial planning process. What we see clients wanting now is more holistic wealth planning, as opposed to traditional portfolio management – particularly among younger investors,” says Craig Pfeiffer, President and CEO of MMI. “We need to help advisors develop their emotional intelligence (EQ) skills to meet this expectation and create ways to reinforce when financial planning conversations are happening between formal financial plan reviews.”

Peter Keuls, Global Head of Wealth Management, Human Capital Solutions, at Aon, adds, “Recognizing the differing expectations of younger investors means rethinking the way in which financial planning is delivered. The COVID-19 pandemic has significantly accelerated the need for digital solutions, and the ability to deliver on that will begin to shape the wealth management landscape as we emerge from this crisis.”

Specific findings of the second report, entitled Harnessing Generational Differences Across the Financial Planning Process, include:

  • Advisors believe that they hold regular financial planning conversations with their clients, but less than half of clients (44%) agree. This increases to 49% among investors under age 45, but this group is also significantly less satisfied with the planning experience overall. 
  • Advisors are significantly overestimating the importance of age and gender in clients’ advisor selection process. The study finds that clients place very little importance on the alignment of their age and gender with the advisor they might work with. 
  • High-net-worth investors who have an excellent financial planning experience report visibly higher satisfaction and hold a higher share of wallet with their primary provider than those who do not. Overall satisfaction is 94% and share of wallet 70% among those who have an excellent financial planning experience.  Overall satisfaction plummets to 32% and share of wallet 61% when the financial planning experience is not excellent.
  • 77% of investors want their advisors to ensure that their investment strategy is aligned with their personal values while advisors think only 44% of their clients do. This is particularly an issue with younger investors, a third of whom feel their advisor does not have a strong understanding of their personal goals and values as a result of the misalignment.

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-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. 

Contact:  
Kelly Caporale, Money Management Institute, kcaporale@mminst.org, (646) 868-8514
Robert Elfinger, Aon, robert.elfinger@aon.com, (312) 381-0071
Matthew Conroy, Peppercomm, mconroy@peppercomm.com, (212) 931-6133