Alastair Black, Head of Industry Change, reports on some of the key findings from abrdn’s recent research, insight which can help adviser firms to continue to improve business efficiencies and attract new clients.

Recently, abrdn carried out an interesting piece of research with over 1,000 advised consumers. Some of the questions we asked were around how engagement with their advisers has changed as a result of the pandemic.

The coronavirus crisis and lockdowns forced many of us into a world of remote working and virtual meetings. Our findings reveal however that the majority of clients are much more receptive to receiving advice this way than they were before the pandemic struck. The main reasons for this are the flexibility and convenience of digital tools and because clients are now more comfortable using Microsoft Teams and Zoom.

These findings offer some insight into how adviser firms could look to develop client engagement post pandemic, using digital tools to build a more efficient business for the long term and attract new clients.

The benefits of a digital approach for both clients and advisers

We know many adviser firms have already embraced a blended client engagement model since lockdown restrictions were lifted, offering a mix of face-to-face and virtual client meetings. And they’ve already seen the benefits of using digital such as the time and travel cost savings.

Longer term, embedding the use of digital tools to engage with clients means adviser firms can not only free up more capacity for greater efficiency, but develop a business model that’s future-proofed as communicating digitally is increasingly the norm for younger generations.

It’s just one of the reason why there’s a bright future ahead for the advice sector.

The use of digital channels means clients can actually benefit from a more enhanced level of service too, with advisers offering financial guidance at a time and place to suit the client and in a way that best suits their needs and life stage.

Our research highlights however that regardless of age, some clients only want to meet face-to-face, while other clients only want to engage online to access the information they want in a way they want to receive it.

What’s clear however, is that a fundamental shift has happened. And it’s a shift that has the potential to make more profound, far-reaching changes within adviser firms than efficiencies and convenience alone, no matter how attractive these benefits are.

The opportunity to develop relationships with family members

Some of the issues clients are worried about were also revealed in our research findings. What’s interesting is that their concerns about the need for support for their families over the long term is as high as it is for themselves.

These concerns have likely been triggered by the pandemic which has brought many families closer together and encouraged more support. With these closer family ties, many advisers now have the opportunity to reach out to younger members through their existing clients.

After all, advisers’ client base has shifted to an older demographic as a result of pensions freedoms, with more clients needing advice longer into retirement. Added to which is the wholesale shift of assets through pension transfers. It means advisers now have more clients in their 70s with substantial assets and who are starting to think about passing on wealth to future generations.

At the core of intergenerational wealth transfer is being able to speak to family generations together. The use of digital tools to facilitate virtual meetings makes this so much easier as families are often split across different towns and cities. These discussions give advisers the opportunity to potentially attract younger members to become clients too.

Longer term, with digital means of communication likely to be much more attractive and appealing to younger generations, the adviser firms which embrace digital will be able to satisfy the growing demand for intergenerational advice and so help to retain family assets within the business.

A bright future ahead for the advice sector

Of course providing advice is more than about providing knowledge around tax and investments, It’s about providing reassurance and peace of mind to clients too.

About a third of the clients we asked in our research say they’ve had much more contact with their adviser since the first lockdown because they appreciate the value of advice more.

They also want that more frequent contact to continue.

It means clients’ understanding of the value of financial advice has never been stronger. Their wish for their children and grandchildren to seek support and guidance, as our research findings reveal, is also clear.

What client wouldn't want to give their family the same benefit of being in control financially as they have?

Throughout the Covid-19 crisis, technology has helped adviser firms to continue to deliver a seamless experience to clients. Now, with the majority of clients much more receptive to receiving advice remotely, continuing the use of digital engagement tools can help advisers grow their business and develop long-term opportunities, such as in the area of intergenerational advice, to serve more clients.

And at the heart of building a sustainable business fit for the future is being able to provide that reassurance and peace of mind clients of all generations are looking for. 

The value of investments can go down as well as up and your clients could get back less than they paid in

The views expressed in this blog should not be regarded as financial advice.