Social distancing weighs on advice business: Survey

Prospecting is now more difficult, and advisers said they are less effective at selling products, a report from Limra and others shows

Remote work in the age of COVID-19 has hurt some advisers’ practices, and many say they are having difficulty finding new clients and working with existing ones.

That is according to results of a survey recently published by Limra, Oliver Wyman, the Insured Retirement Institute and the National Association of Insurance and Financial Advisors. The survey included responses from 400 financial professionals between May 5 and June 1.

Nearly 70% of advisers said social distancing has made prospecting new clients moderately or highly challenging, according to the report. Nearly as many, 63%, said initial planning conversations are challenging, and 61% said social distancing making product sales difficult with new clients.

“The biggest challenge for advisers … [is] the lack of face-to-face meeting, all the way through the sales process,” said Limra research analyst Peter DeWitt, the author of the report.

Working from home has made product sales difficult, according to at least a third of advisers surveyed. Forty-two percent said they are less effective at selling annuities, while 36% said the same about investment products and 44% said so about life insurance. Just over a quarter said they are now less effective at managed accounts sales, according to the report.

About half of advisers said the COVID-19 crisis has made it very difficult to meet personally with clients, while another 37% said doing so is moderately difficult.

Market volatility and low interest rates have also made business challenging, with 74% saying that this year’s market rollercoaster has caused some level of disruption. Sixty-seven percent said as much about low interest rates, according to the report.

Despite the need for social distancing measures, about a third of advisers have remained working in their physical office locations, and another third are there at least some of the time, the survey found. The remaining third said they are now working exclusively from home.

However, about 80% of advisers said they are optimistic about maintaining business and serving their existing clients, the report noted. “The advisers feel that even in this socially distant environment, there are still opportunities to grow their client base,” DeWitt said.

A separate survey Limra published earlier this year, its 2020 Barometer study, found that a quarter of U.S. adults are considering hiring a financial adviser. About half of people said they would research potential advisers on social media, that report found.

More than half of advisers said in the more recent survey that they feel positive about taking on new clients in the current environment, and 61% said they are optimistic about prospecting.

But regarding their businesses’ finances, things are less rosy. Just 30% said they feel positive about their total revenue this year, while 22% were neutral, and 47% do not feel good about it. On profitability, 37% said they were optimistic, but 36% said they were not, results of the survey show.

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