'Advice' is changing due to client awareness of fees

Cerulli study says advisers have to pay attention to other aspects of client engagement

Apr 4, 2019 @ 1:52 pm

By InvestmentNews

Three-quarters of advisers in a new Cerulli Associates study agree or strongly agree that, compared with five years ago, prospective clients are now more sensitive about fee levels.

As of last year's second quarter, 53% of investors agree that they are willing to pay for advice regarding their financial investments, representing a 15-percentage-point increase from 2009, when only 38% of investors expressed such willingness.

(More: Advisory fees push commissions further into the background)

The percentage of investors who believe that their advice is either free or are unsure how they pay for advice has fallen from 65% in 2011 to 42% in 2018, Cerulli said in a release.

"While clients understand that advice comes at a cost and many believe it is worth its expense, if the cost-benefit of engaging with an adviser is not clear, they are more likely to opt for other providers," said Marina Shtyrkov, a research analyst at the Boston-based firm.

"Although acumen and investment performance are valuable, practices that emphasize only these elements may be misaligned with the true drivers of investor satisfaction," Ms. Shtyrkov said.

(More:Time: An asset to be invested, not spent)

According to the majority of retail investors, transparency (73%), understanding of needs and goals (67%), and promptness of requested follow-ups (66%) are paramount to advisory relationship satisfaction.

But of advisers surveyed, only 30% strongly agree that their practice goes above and beyond to make clients feel special, and that it has a repeatable, consistent client experience.


What do you think?

View comments

Most watched


Finding innovation in your firm

Adam Holt of AssetMap explains how advisers understand they need to grow, but great innovation may be lurking right under your nose.


Finding your edge from Tony Robbins

Guru Tony Robbins has helped a lot of people, but armed with his psychology Financial Advisor Josh Nelson has helped his practice soar.

Latest news & opinion

LPL expanding platform to include employee brokers

The largest IBD in the country has agreed to buy a small broker-dealer in Florida to kick off the new effort.

Hopes high for bill to ease small-firm adviser regulations

High-ranking, bipartisan members of the House Financial Services Committee back the legislation.

Redtail CRM data breach exposes personal client data

The information exposed includes names, addresses, dates of birth and Social Security numbers.

This strategy can double your estate-tax exemption

'Portability' allows a surviving spouse to tack the decedent's exemption on to his or her own. Despite the higher threshold for paying estate taxes in the 2017 tax law, experts recommend filing for the benefit.

Couple in Morgan Stanley advisory account wins $519,000 arb case over unsuitable investments

Plaintiff's lawyer says junk bonds, futures contracts and derivatives were inappropriate for his clients.


Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print