'Confidence Gap' crisis among financial advisors

Millennials and Gen Xers will inherit an estimated $16 trillion dollars in the next 10 years. This cohort prioritizes purpose and impact when making investing decisions in a way no other generation has — and financial advisors are not ready.

pie chart showing that younger generations value holistic life planning over pure portfolio management

While newer investors still want some traditional advice, which we call the “head,” they expect much more. They want “heart” from their advisors — things like financial planning advice, peace of mind, and guidance on meeting their overall life goals. So we interviewed 150 financial professionals from the 20 largest U.S. metro areas, and asked them how confident they are in meeting these “heart” needs.

What are the specific gaps in advisors’ confidence?

The “heart” gap was pronounced in our findings: Only 43% of respondents believed they were prepared for these emotionally intelligent conversations; moreover, fewer than half felt very confident that the content they were using could equip them to build deeper relationships with clients.

chart showing that advisors do not feel confident having conversations about emotional concerns of clients.

The topics advisors felt a lack of confidence talking about included everything from impact investing themes and environmental impact to corporate purpose and aligning a portfolio to help care for family.

The digital divide

Clients also expect content and communications to meet them where they are. Digital sources play an important role in the investment decision process for younger investors. One-third of millennials and 21% of Gen X use social media — which includes YouTube — to gather investment insights and ideas, compared with only 3% of boomers.¹ However, our research showed that advisors are unlikely to use these digital channels to engage with existing clients or seek out new customers. Only 11% of advisors say social media is one of their preferred forms of communication.

How content can help

More than two-thirds (69%) of respondents felt that the marketing and communication materials they were working with were focused only on returns or performance, not on impact or value.

chart showing that 73% of advisors felt their content needed improvement when addressing sustainable or impact investing. And 65% thought that their content addressing portfolio alignment for their clients’ desired lifestyles also needed addressing.

Providing the right content and tools will instill confidence in financial advisors. That confidence will lead to more engaging conversations about clients’ passions, family and legacy planning. And those holistic conversations will deepen relationships and demonstrate the breadth of expertise — all of which boosts client satisfaction and business.

Download a free copy of the “Bridging the Confidence Gap” white paper

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