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Pershing Study highlights investor demand for financial advice tailored to specific life events


Research commissioned by Pershing Limited reveals that people want financial advice that caters for specific life events rather than general financial planning.

The report, Digital Horizons: An Investor Perspective on When to Use Online Wealth Management Services and When Personal Advice is Needed, also shows that individuals are willing to pay for high-quality digital communications. The findings cite that advisers and wealth managers who fail to meet these desired digital capabilities run the risk of losing clients.  
The vast majority of the 1,002 mass affluent and high net worth UK individuals surveyed for the report sought financial advice correlating to a specific life change. The most popular reasons are a career move (13 per cent of respondents), location change (13 per cent), marriage (9 per cent), retirement (8 per cent) or financing a property (8 per cent). 
Most of the key life events that prompt individuals to seek advice take place between the ages of 38 and 50 with those 40 and under experiencing twice as many high-value life events than the older client groups. Loyalty to existing financial providers is far from guaranteed. In the case of a life event such as retirement, the research found that 8 per cent of respondents sought a new adviser relationship. In addition, younger generations are even more open to potential change—55 per cent of investors under the age of 35 have switched financial providers in the last two years. 
Though more likely to change, younger wealthy individuals particularly value the support of their provider in navigating major changes with the right advice, products, services, and digital tools. They expect high-quality online services along with high-quality adviser interaction. Thirty-nine percent of respondents under 35 years of age said their main interaction with their financial provider is through a named adviser who provides information and advice. This compares to just 21 per cent of those over the age of 65, who mainly use a named adviser.
“Advisers and wealth managers must cater for the most impactful life changes, which are not connected with the most obvious traditional retirement or investment planning needs,” says Ileana Sodan (pictured)i, Chief Relationship Officer of Pershing Limited. “To keep clients for the long term, advisers must maintain engagement throughout the entire lifecycle, and take steps to refresh and renew relationships. Wealth managers need to recognise and deliver what younger clients expect of them or risk missing out. This of course is while continuing to focus and grow their traditional client base. The challenge for the future is to be more targeted for different demographic groups.”
With the rise of robo-advisers and execution-only online services, there is a danger that providers who don’t respond to technology demands will see their clients go-it-alone. Seventy-five percent of survey respondents would consider leaving their current financial provider if they were unable to easily transfer money online. Sixty-nine percent say that a lack of online access to their portfolio would prompt them to search for a new relationship. Sixty-three percent say that it is essential to be able to make investments directly online and the same percentage expect to be able to switch channel mid-transaction without interruption.
Forty-two per cent of younger wealthy individuals would pay more for good quality digital communication, compared with just 1 per cent of investors over the age of 65, but advisers must think beyond their website to add real value when it comes to digital. Among respondents under the age of 35, reputation is the most important factor when selecting a provider, chosen by 30 per cent, yet search engines are a close second (25 per cent). Twenty-three percent highlight the importance of online ratings and reviews and an identical number say the firm’s website prompted selection. Younger clients want breadth of online information and content, including updates via blogs or social media.
Sodani adds: “Clients are looking for more agile technologies – mobile applications and online financial tools that help them to plan their finances and communicate with their adviser. This digital challenge is not as simple as building a state of the art website and the risks of complacency are high. Advisers must however understand their client base. Even the most tech savvy clients still want face-to-face advice when it matters most, and not everyone wants to transact online. To retain and grow relationships providers must provide flexible means to communicate and manage finances.”
The survey found that 76 per cent of wealthy clients now conduct their financial affairs fully or mostly online. Only 10 per cent claim never to use online wealth management tools. Sixty percent like to receive mobile notifications from their financial provider and the figure rises to 79 per cent for young investors.

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