What insurance demands are investors making of their financial advisors?

New report reveals the importance of delivering the right advice at the right time

What insurance demands are investors making of their financial advisors?

Insurance News

By Ryan Smith

North American investors want more insurance products from their financial advisors, according to a new report from Accenture.

Investors expect their financial advisors to provide comprehensive and personalized wealth offerings, with products that cut across wealth, banking and insurance, according to the report, titled “The New State of Advice.”

The report is based on a survey of 1,000 investors in the US and Canada who have a financial advisor. It found that while investors have made progress in delivering advice that combines digital, virtual and human interaction, they may not be as effective in delivering the right advice and products at the right time.

That’s especially true of investors under 60, whose advice needs and preferences are different from those of baby boomers, Accenture said. For example, while 79% of investors overall expect their advisor to offer banking and insurance products, 85% of Gen-Xers, 91% of millennials and 97% of Gen-Zers expect those services, compared to only 47% of baby boomers.

Younger investors are also more likely to be interested in sustainability, Accenture reported. While 59% of investors overall have asked their advisors about ESG or socially responsible investments, Gen-Zers, millennials and Gen-Xers were more than twice as likely as baby boomers to have done so.

Accenture also found that investors want more personalized advice that covers all aspects of their financial portfolios. 55% of survey respondents said that the advice they receive is too generic – including 50% of affluent investors (those with personal wealth between $250,000 and $1 million). Another 55% said they thought they could do a better job investing themselves. 56% said they considered a wealth offering that includes advice, risk protection and lending products to be essential.

“Our findings show that investors expect a deeper level of engagement with their advisor that goes beyond pure portfolio management,” said Scott Reddel, leader of Accenture’s wealth management group in North America. “The wealth managers who thrive in the years ahead will embrace AI, data and analytics, and cloud computing to power their advisors with the intelligence and tools to offer holistic, personalized and integrated wealth advice.”

Accenture also found that the financial advice sector was facing pressure from tech giants. The report revealed that younger investors are more receptive to financial advice from sources outside the wealth management sector. For example, 95% of Gen-Zers, 83% of millennials and 74% of Gen-Xers said they would consider wealth products and services offered by Google, Apple or Facebook, compared with only 30% of baby boomers. Younger investors are also at least twice as likely as older investors to trust financial advice generated by an algorithm more than advice provided by a human advisor, the report found.

“The days of tailoring the level of service to fit the size of an investor's portfolio are over. The average investor expects the same level of service and personalization as someone in the high-net-worth bracket,” said Rachel Silver, managing director in Accenture’s North American wealth management group. “Wealth management firms should reimagine their advice offerings at scale to provide a seamless client experience with curated recommendations and a purpose-driven product suite that reflects investors’ social interests and key life moments.”

Key findings of the report include:

  • 71% of investors want an advisor whose values align with their, while 69% want an advisor who interacts with and considers input from their spouse.
  • 17% of respondents switched advisors in the last year, making the move because of better technology offerings (49%) and better investment product offerings (49%).
  • 39% of respondents wanted to hear from their advisor more proactively, and 29% are willing to take more meetings.

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