Date: 10/29/2020
Source: Incapital
Author: Incapital

Survey Finds Majority of Financial Professionals Helped Steer Clients Away from Selling at the Bottom of the Market

Clients Seemingly More Concerned With Short-Term Market Gyrations than Having Enough Money in Retirement


Vast Majority Say Clients Are Concerned About Election; Would Give Up Portion of Market Upside for Downside Protection


Change of Plans: Far Fewer Financial Professionals Going Back to Office But More See Growth in 2020

BOCA RATON, FL – October 29, 2020 – According to the latest survey of 752 financial professionals released by Incapital LLC, a leading underwriter and distributor of fixed income securities and risk management investment solutions, 81% said their clients have been calling more frequently since March and 97% said their clients have shown confidence and patience by not changing investments. Still, the majority (58%) also said they had to convince their clients to not sell at the bottom of the market.


In fact, more than two-thirds (67%) said their clients are more concerned with short-term market gyrations than having enough money in retirement; and almost every (97%) respondent said that their clients are concerned about the upcoming election and its impact on their investments.


Perhaps that’s why the vast majority (93%) also said their clients would give up a portion of market upside for downside protection.


The third Incapital Pulse Survey: How Financial Professionals are Operating in this Era of Uncertainty was conducted online between September 15 and September 21, 2020.


“Since March, uncertainty has reigned over our lives and over the markets,” said Chris Mee, Managing Director, Head of Wealth Management Solutions Distribution at Incapital. “It’s no wonder clients have been calling their advisors more frequently for guidance. The good news is clients seem to have listened. By not selling at the bottom of the market, equity investors have been able to ride the recovery back up to near record highs, which could be the difference between achieving their goals and not. As uncertainty continues, it also makes sense that investors would consider more risk-managed solutions that can protect the downside, even if it means sacrificing some upside.”


Mr. Mee added: “Helping their clients stay the course with investments that meet their risk tolerance is what makes advisors so valuable, especially during periods of intense volatility and uncertainty, like today. In fact, it’s times like this when smart investors seek professional guidance, which would explain why more advisors are seeing growth in both revenue and total clients served.”


Revenue Growth Expected in 2020 But Fewer Returning to Office


Revenue growth in 2020 is now expected by 83% of those surveyed, up from 75% surveyed by Incapital in June. More financial professionals also expect revenue growth of 30% or more – up from 7% of those surveyed in June to 11% in September.


The percentage who said they will serve more households in 2020 vs. 2019 also went up: from 38% in June to 47% in September.


While they may be achieving greater growth, more are doing it from home than expected. The number who say they “won’t return to office until 2021” increased by almost 2.5 times from the June survey to the September survey: from 17% to 42%. Only 32% said their primary way to meet with clients for the remainder of 2020 will be in person.


In addition, the percentage who were optimistic about hosting live, in-person events in 2020 has quickly diminished: In June, 47% said they planned to host in-person events, but that number has plummeted to 19% in September.


Even though a large percentage might not be returning to the office yet, far more (71%) now say their firms have a written plan for returning to work than they did in June (49%). 


Efforts to Mask Up


The use of various safety measures that will be employed at their offices has also increased significantly. The top three are:


  1. Hand sanitizer: from 25% in June to 81% in September

  2. Face masks required: from just 17% in June to 70% in September

  3. Spacing out appointments: from 19% in June to 60% in September


Marketing Success in 2020


2020 has been a year of marketing innovation, adaptation and ingenuity for financial professionals. Many have adopted a wide variety of new marketing approaches; according to those surveyed, the following marketing strategies have resulted in the most new clients:


  1. Referrals Without Asking
  2. Asking For Referrals From Clients & Strategic Alliances
  3. Email Campaigns
  4. Virtual Educational Seminars


Second Shutdown Remains Biggest Challenge to Success


Financial Professionals themselves are also concerned about uncertainty: as they said in June, they continue to believe that “repeated shutdowns due to resurgence of Covid-19” is their largest barrier to success. Other barriers to success were volatile markets, social/physical distancing requirements, and the impact of robo advisors.


About the Survey


The Pulse Survey sponsored by Incapital was conducted online via Qualtrics by Red Zone Marketing. A total of 752 financial advisors, including wealth managers, fiduciaries, financial planners and brokers from more than 50 broker-dealers and RIAs completed the survey between September 15 and September 21, 2020. Responses were from financial professionals residing in 45 states and from office locations including 26% urban, 66% suburban and 7% rural. Click here to obtain the survey report.