US Insights

Financial advisors, mind your clients

Joe Hagan

Former Senior Vice President

Economy 08.25.2015 / 23:25

Making ends meet 620

TNS: Loyalty to existing advisors can drop markedly during times of turmoil as rich investors seek better advice

Communications are critical in times of market turmoil, particularly with affluent wealth management customers.

The dramatic stock market decline that began in earnest in late 2008 offers insight into how affluent investors may react to the market volatility we're experiencing now. As part of our Affluent Market Research Program, TNS closely monitored how investors were thinking and acting back in 2008 and 2009. Among the highlights of what we learned:

Affluent investors didn't panic. Most affluent individuals achieve their wealth through decades of work and saving. They take a long-term perspective. They have a plan and they stick to it, in good times and bad. In mid-October, 2008 - a month after the collapse of Lehman Brothers - a solid majority of affluent investors had seen the value of their investments drop by more than 25% in the previous six months. Still, most said their investment approach had changed very little or not at all.

They craved information. Though they weren't taking action, affluent investors by late 2008 were certainly paying attention. Our October 2008 survey showed that many more investors were taking "a wait and see approach." The proportion of investors who were reading more about investment strategies had also jumped significantly.

They scrutinized their advisors. Loyalty to existing investment advisors fell markedly in 2008 and 2009, and more investors reported a willingness to switch advisors. Compared to 2007, investors evaluating their providers and advisors cared less about service quality and less about commissions and fees. They cared much more about getting better advice.

If the 2007 - 2009 experience has relevance for today's market, it suggests financial services firms can capture the attention of affluent investors by being a source of information about market developments and investing strategies. Financial advisors should be particularly proactive, and communications should clarify the firm's market perspective.


Source: Kantar TNS

Editor's Notes

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