Firms need to address consumer preferences

Consumers looking for retirement and tax planning advice may have a hard time finding an advisory firm that offers both. And advisors might want to step up to the plate to provide that combination.

That’s one of the notable findings of a study released last week by Herbers & Co., a business management consultancy and research company.

Tax planning and retirement planning are the most in-demand services among consumers, the study found. Almost all the respondents (90%) said they need for tax planning advice, while 72% said they’re looking for retirement planning support.

However, when it comes to offering these services, only 73% of advisors said they offer tax planning services, while just 67% provide comprehensive retirement planning advice.

Angie Herbers, managing partner of Herbers & Co., said tax policies and challenging economic conditions are causing a state of flux in the financial landscape.

“Investors, more than ever, are voicing their need for stability and clarity,” Herbers said in a statement. “Advisors should see this as an opportunity — a moment to not only bolster their existing tax and retirement planning services but to innovate and adapt, ensuring they remain trusted partners in their clients' financial journeys.”

One of the other issues firms face is the client experience they provide. According to the study, some of the fastest-growing firms said their customer experience might not be fully meeting their clients’ needs.

Sixty-three percent of fastest-growing firms rated their client experience as below average, versus just 36% of all other firms. This could suggest that most firms are committing toward improvement.  

Among individuals with $250,000 or more in investible assets, 39% are looking for other options for these investments, and a noteworthy 10% are interested in obtaining financial advice related to cryptocurrencies. Thirty-three percent of all advisory firms reported that they offer help with alternative investments but none of the firms said they offer help when it comes to crypto investing, despite the evident demand from clients.

Meanwhile, only 1 in 2 consumers wanted traditional investment management help, the study showed.

“It's evident that the emphasis on traditional investment management services is not resonating as strongly with today's investors,” Herbers said. “Now, there's a need to recalibrate and offer services that align more closely with investors. The firms that do so will have a competitive advantage."

While two-thirds (66%) of firms that provide investment management services, only half of investors showed interest in such offerings. The study also revealed that there are more than 250 differing combinations of services that advisors believe make their firms comprehensive.

“With such a disparity in what services comprise comprehensive advice, there’s a critical need for the industry to define ‘comprehensive’ to minimize consumer confusion,” Herbers said.

The Herbers study incorporated feedback collected throughout 2023 from 1,598 investors and 724 advisory firms.