GWG Survey: Investors Seek Advisor Counsel Beyond Investment Returns During Pandemic

older parents and son looking at tablet

In the midst of an unprecedented environment of business lockdowns and financial pressures, U.S. investors are increasingly turning to their financial advisors for help that goes beyond investment returns.

As a result, even as investing markets have become more volatile, a survey of financial advisors conducted by GWG in June, found that more than one-fifth of the surveyed advisors reported gaining clients during the pandemic, with one-third of respondents reporting more than 10 percent client growth.

“This shows how advisors are meeting the challenge of this pandemic and becoming important resources for clients who are worried about their health, their jobs as well as their investments,” said Matthew Paine, GWG’s Senior Vice President. “Ironically, clients whomay have not experienced a serious market downturn are having to redefine what it is for them to accept risk. I think people are using their advisors as a sounding board during this turbulent time.”

The surveyed advisors described having to deal with the daunting needs of clients who were concerned about investments, their health and the loss of jobs and income. More than 40 percent said they had to manage their own personal health and business concerns while serving clients who worried about the health of themselves and their family and job and income loss.

That was demonstrated in the 57.5 percent of respondents who said their biggest challenge was balancing the need to reassure clients while providing investing strategies like rebalancing to them. Right behind that issue was the need to communicate relevant information in the rapidly changing environment.

“Advisors who have focused on the strong habits of client communications, those are the ones who have grown their practices,” Paine said. “Listening to clients about their worries while discussing the need to rebalance their investments demonstrate that you are in for the long run and you have empathy for their problems. Those are the habits that are more based on feelings, emotions and visualizations about success that lead to practice growth, year in and year out.”

Top client concerns included the markets in general and their current investments, but almost four in ten reported client worries about jobs and income and the health of themselves and their families.

“Advisors are acting as personal counselors for those clients who were frightened by the initial deep declines in the market,” Paine said. “Calming clients through tough times has always been an important part of the job, but this has taken on proportions that are far beyond that. Advisors have really stepped up at a critical time.

The survey found that technology has become a growing element of communication with clients. About 13 percent of advisors reported conducting video chats with clients and 81.2 percent of those used Zoom as their method of communicating. Three-quarters of advisors who responded said they found it as easy or easier to connect with clients during the pandemic.

Of course, traditional means have held their own: 73 percent said they successfully interacted with clients by telephone.

Technology has become standard practice for many advisors. Only 10 percent of respondents said technology was too complex or inconvenient for them or their staffs.

“As more and more people are increasingly comfortable with video chat, that’s a trend that will continue to grow,” Paine said. “I think it’s going to give phone calls a run for the money because it gives you the face-to-face interaction that gives clients the feeling of a personal communication even if they’re snowbirds who spend half the year in a warm weather climate or vice versa.”

One long-term impact of the pandemic may be the ability to work from home. Almost 20 percent of respondents said they expected to continue working remotely or from a home office after the pandemic has ended.

“In the end, clients are going to dictate what advisors do,” Paine said. “We hope clients can embrace technology to be more efficient, but clients have their own ideas about how they want to be communicated with. Advisors will need to consistently check back with them or be ready to rebuild around a different type of client who will work in ways they find the most efficient and effective.”