• Advisors Cite Death, Lack of Time as Primary Reasons of Lost Business; Suggests Advisors are Falling Short on Generational Wealth Transfer

• Customization a Key Differentiator; Referrals Driving Business

According to the latest InspereX Pulse Survey of 487 financial advisors, there continues to be a strong focus on older clients; they report that just 18% of their clients are under the age of 50. The majority (59%) of their clients are at least in their 60s.

The majority of assets that their 50-and-under clients have come from the clients’ jobs, according to 73% of respondents. Only 12% said the majority of younger client assets came from an inheritance.

Though 60% of advisors agree that the younger generation is being influenced to go elsewhere for advice, 87% do not believe that pursuing younger prospects is a waste of their time.

What surprises advisors most about younger investors?

• How much they rely on social media for investment education (64%)
• That they won’t admit they need help investing (34%)
• How low their investment IQ is (32%)

The Advisor Practice 2024

Death is the primary reason advisors have lost clients, according to 61% of respondents, followed at a distance by a lack of time to nurture the relationship (14%).

“Given the combination of many advisors citing death as the top reason for losing clients, coupled with the small percentage of advisors working with clients under the age of 50, it’s likely advisors are missing opportunities to retain business and engage the next generation of investors and heirs,” said Chris Mee, Managing Director at InspereX.

Conversely, 82% of financial advisors said they have won business from other advisors because other advisors did not communicate with clients. They also said they won business from advisors who:

• Failed to meet client performance expectations (25%)
• Did not offer enough new or innovative ideas (24%)
• Gave bad advice (20%)

Advisors are growing their footprint. Over the past three years, advisors said their business has expanded to include:

• New clients outside of my local area (50%)
• More referrals to clients outside my local area (49%)

Just 31% said their business was only local.

Only 26% of financial advisors said they don’t have client problems. Among those that do, the five most common challenges are:

1. They listen to bad ideas from their adult kids or others (33%)
2. They don’t understand risk (27%)
3. Their expectations are unreasonable (25%)
4. They are uneducated about the financial world (19%)
5. They are too passive (16%)

What sets advisors apart?

Almost three-quarters (72%) of advisors surveyed said they use custom portfolios instead of models for clients.

Outside of their client relationships, advisors said financial planning strategies (31%) and the use of customized solutions (21%) differentiated their practice. Just 3% said portfolio performance set them apart.

Another 26% said that client relationships are their only differentiator.

Advisor marketing: What’s working?

According to 79% of respondents, new client acquisition in 2024 is being driven by referrals without asking. Other ways advisors are winning business this year include:

• Asking for referrals from clients (39%)
• Networking (38%)
• Client appreciation events (24%)
• Educational seminars or workshops (18%)

Digital marketing techniques rank at the bottom of the strategies they have used for new client acquisition:

• LinkedIn (7%)
• Facebook (5%)
• Social media advertisements (4%)
• Direct mail (3%)
• Search engine optimization (SEO) (2%)
• Google Ad words (2%)

“Advisors are transforming their business, driving their competitive advantages with more customized portfolios and advanced planning, and expanding their reach across the country, thanks in part to technology,” Mr. Mee said. “We believe this trend will continue, and we expect advisors will start paying more attention to younger investors as well. We know their need for advice will multiply as they accumulate assets and their financial picture becomes more complex. It’s important now for advisors to get familiar with how the younger generations are learning about investing, so they can establish relationships based on common ground.”

About the survey – View Survey Report

InspereX is the tech-driven fixed income and structured products distribution and trading firm. The 2024 InspereX Pulse Survey was conducted between July 8-15, 2024 by Red Zone Marketing on behalf of InspereX. The 487 financial advisor respondents work at independent broker/dealers, RIAs, banks, regional firms and wirehouses. During the survey period, the S&P 500 high was 5666.94 and closed at 5631.22 on July 15.

About InspereX

InspereX was founded 25 years ago by Tom Ricketts, now our Chairman as well as the Executive Chairman of the Chicago Cubs. We pioneered delivering innovative, institutional-quality strategies and offerings to the retail market, and we’re now an industry leader in underwriting, marketing, and distributing a wide range of fixed income investments and structured products. Our ground-breaking investments, distribution, education, and technology have been recognized with dozens of awards. InspereX represents more than 400 issuing entities, distributes to more than 1,500 partners, and has underwritten more than $750 billion in securities. The firm has seven trading desks and more than 170 employees with offices in Delray Beach, Florida; San Francisco; Chicago; and New York City.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240910435147/en/