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Clients, easily distracted by news, are missing bigger picture

Financial advisers continue to face a wide gap between what they think is important and what their clients think is important

Financial advisers continue to face a wide gap between what they think is important and what their clients think is important.

According to the latest research from Russell Investments, investors are too heavily focused on news events and the global economy, and not thinking enough about the longer-term big picture.

“Investors are looking to the media and the Internet, and they’re getting a lot of information, and they seem to be reacting to all of it,” said Kristin Gibson, director of strategic distribution partnerships at Russell.

The 24-hour media focus on international crises is forcing financial advisers to work even harder to keep clients focused on long-term planning and investment goals, she said.

‘SAME PAGE’

“In order for advisers and their clients to get on the same page, advisers first need to acknowledge and address investors’ concerns with short-term topics and then educate them on the importance of establishing goals and sticking to a long-term plan,” Ms. Gibson said.

The gap between what advisers are thinking and what their clients are thinking is illustrated partially in the survey’s optimistic-outlook measurement.

The survey of nearly 450 advisers at more than 200 firms, which was conducted last month, found that 76% of respondents are optimistic about the capital markets.

Just 29% of the advisers, however, described their clients as optimistic about the capital markets.

“The latest survey results underscore that the adviser has a critical role to play when it comes to helping clients focus and avoid being distracted by short-term market moves and big news stories,” Ms. Gibson said.

When asked about conversations that they have had with clients over the past six months, advisers said that investors are most interested in discussing government policy, market volatility and global events.

Advisers, meanwhile, said that they have tried to initiate conversations about portfolio performance, estate planning and keeping pace with inflation.

The one area where advisers and clients seem to find middle ground is retirement planning, which Ms. Gibson interprets as a positive sign.

Ultimately, it seems that advisers think that they still hold some sway over how their clients are handling financial decisions.

When asked where clients go first for advice on their most important financial decisions, 88% of respondents said that clients are still turning to their advisers.

E-mail Jeff Benjamin at [email protected].