Advisor Pulse/media/90E512A8907448E7A6FE35B9A0… · This presentation has been prepared by...

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Advisor Pulse

May 2020 Survey Report: How Advisors Are Operating in This New Era of Uncertainty

Brought to you by

http://www.incapital.com/

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Table of Contents

Introduction 3

Key Findings 4

Economic & Industry Sentiments 5-6

Office Operations 7-13

Client Meetings & Communications 14-16

Business Outlook 17-19

Marketing & Prospecting 20-23

Methodology & Demographics 24-25

About Incapital 26

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Introduction

Incapital has partnered with Red Zone Marketing to conduct research on how financial advisory businesses are adapting and changing in response to crisis conditions.

Survey Respondents:301 financial advisors from 37 broker-dealers and banks as well as RIAs were surveyed from May 14-19, 2020. The respondents came from 42 states across urban, suburban and rural locations. The average age of respondents was 55 years old with a gender breakdown of 23% female, 77% male.

Survey Objective: To collect insights designed to help advisors navigate through this time of great uncertainty and move their business forward.

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Key Findings

The research uncovered that there is uncertainty amongst advisors regarding when they will be meeting face-to-face again with clients, how they will operate with safety standards, and how they will continue to market their businesses.

As advisors continue to navigate the landscape of their operations, the survey uncovered that most advisors do not have a plan for safely returning to the office for clients and employees. 71% of advisors surveyed do not have a plan and 48% have not announced safety measures for clients or employees. We see this as opportunity for advisors moving forward to develop a written plan addressing safety measures and business continuity while instilling confidence with their key constituents.

60% of advisors will not mandate health status sharing amongst employees or clients, however 71% of advisors agree or strongly agree that they will be handling their older and at-risk clients differently.

The study also found that advisors are uncertain about their revenue in 2020 and the number of households that they will be serving. 32% of advisors see their business revenue declining in 2020, while 35% believe their revenue will grow more than 10%. 33% project their revenue increasing between 0% and 10%. And while 58% of advisors do not see the number of households they serve as changing from 2019 to 2020, 34% see a decrease and 8% see an increase in households served.

Most advisors are certain that they will be back to work in their offices in 2020 with 89% stating they will be returning to a normal, in-office schedule for all team members sometime in 2020. These results differed when looking at types of locations. Advisors in urban locations do not anticipate having their team members fully back in the office as quickly as those in suburban and rural locations with 20% stating that they would not be back in the office fully until sometime in 2021. More than 50% of advisors in both suburban and rural areas believe they will be fully back in the office in June.

As for prospect and client outreach, 54% of advisors have conducted a virtual prospect meeting and 83% have a moderate to a great deal of comfort in meeting with prospects virtually. And, 81% of advisors plan to communicate more with clients in 2020 than in 2019.

On a positive note for the industry, 72% of advisors surveyed feel supported by their broker-dealer and by their wholesaling partners.

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In the Economy?

1 10

6

On a scale of 1-10 with 10 being the highest

What Is Your Confidence Level...

About the State of the Financial Services Industry?

On a scale of 1-10 with 10 being the highest

1 10

7

6

5%No

72%Yes

23%Somewhat Broker-Dealer?

Do You Feel Supported by Your…

5%No

72%Yes

23%Somewhat

Wholesaling Partner?

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Employee Security

4%of advisors plan to lay off

or furlough employees

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71% Do NOT have a plan

A Plan for Returning to the Office

48% Have NOT announced safety measures for clients or employees

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What Safety Measures Will You Employ?

92%

38%

72%

44%

42%

41%

18%

Hand sanitizer

Changes in waiting room procedures

Spacing out appointments

Face masks required

Face masks optional

Face masks provided

Other solutions

!

?

10

60%

!

When an In-Person Meeting is Set with a Client or Prospect

Will require the client or prospect to show proof of recent testing

25%

15%

Will share with the client or prospect the

recent health tests of their

team

Will not require any health status sharing

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44%

17%

8%13%

5%1% 1%

11%

June July August September October November December Sometimein 2021

Team/Employees Fully Returning to the Office

By Type of Location

27% 20%7% 16% 10% 0% 0%

20%


53%13% 7% 14% 3% 0% 1% 9%


54%8% 15% 0% 8% 0% 0% 15%


URBAN

SUBURBAN

RURAL

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States where a majority of advisors plan to havetheir team back to the office by June 2020

Team/Employees Fully Returning to the Office

CALIFORNIA

IDAHO

COLORADO

TEXAS

OKLAHOMAMISSOURI

MINNESOTAWISCONSIN

PENNSYLVANIA

OHIO VIRGINIA

NORTH CAROLINA

SOUTH CAROLINA

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When Will You Allow…

33%

14%

7%10%

6% 7%

2% 3%

18%

Now June July August September October November December Sometimein 2021

Vendors in Your Office?(Copy Machine, etc.)

19%

4%

11% 11%8%

12%

3% 1%

31%

Now June July August September October November December Sometimein 2021

Wholesalers in Your Office?

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Mostly In-Person Meetings with Clients by What Month…

13% 7% 10%30%

14% 3% 3%20%


14% 12% 13% 12% 12%1% 3%

33%


15% 8% 15% 16% 15%0% 0%

31%


URBAN

SUBURBAN

RURAL

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The Main Way You Will Meet with Clients in 2020

36%Virtually

48%Phone

16%In-Person

Top 3 Virtual Communication Tools

70%

48%38%

Zoom Webex GoToWebinar

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Client Communications

81% of advisors will be

communicating MOREwith clients in 2020

than in 2019

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4%

28%33%

29%

6%

-20% or less -20% to 0% 0 to 10% 10% to 29% 30%+

REVENUE INCREASEDECREASE

Revenue Increase or Decrease in 2020

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34%

58%

8%

Lower Same Higher

Number of Households You Will Serve in 2020 vs 2019

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Barriers to Success for Financial Advisors

1. Volatile markets

2. Social/physical distancing requirements

3. Repeated shutdowns due to resurgence of COVID-19

4. Unemployment

5. Robo advisors

6. Competition from other financial advisors

7. Shrinking margins

8. Lower fees

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Marketing Strategies

No definitive marketing strategies for moving forward

15% 14%11% 11% 10%

Asking forReferrals

VirtualEducational

Seminars

LinkedInProspecting

EmailCampaigns

All Others(individuallybelow 10%)

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Live In-Person Events

57% will NOT behosting live,

in-personevents in 2020

25%believe events will begin in September

43% will be hosting live, in-person events in 2020

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Have You Conducted a Virtual Prospect Meeting?

46% NO

54% YES

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Virtual Prospecting

What is your comfort level in meeting with prospects virtually?

20%

29%34%

16%

1%

A great dealA lotA moderateamount

A littleNone at all

COMFORT LEVEL VERY HIGHVERY LOW

Do you feel you have the proper tools and resourcesto conduct business virtually?

40%38%

10%10%

2%

Definitely yesProbably yesMight or mightnot

Probably notDefinitely not

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Survey Methodology

May 14 - May 19, 2020 301 Financial Advisors

AVERAGE AGE GENDER

37 Broker-Dealers + RIAs

CERTIFICATIONS

55

41%CFP®

23%77%

Survey research, design and analysis completed by Red Zone Marketing, May 2020.

RESPONDENTSSURVEY COLLECTION

AFFILIATIONS

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Geography of Participants

26%

64%

9%1%

Urban Suburban Rural Other

42STATES

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This presentation has been prepared by Incapital LLC or an affiliate thereof (“Incapital”). This presentation is for general information purposes only and should not be construed as specific tax, legal or investment advice. The information in this presentation is subject to change without notice. Incapital does not warrant the accuracy or completeness of any information contained herein and provides no assurance that this information is, in fact, accurate. Data provided by third-party sources is believed to be reliable and there is no representation or warranty as to the current accuracy of, or liability for, decisions made based on this material. Neither Incapital LLC, its affiliates nor its partners make any representations or guarantees as to the accuracy or completeness of data from third-party sources.

Incapital LLC and its affiliates explicitly disclaim any responsibility for product suitability or suitability determinations related to individual investors. This information should not be regarded by recipients as a substitute for the exercise of their own independent judgment and the information provided herein is not an offer, solicitation or a recommendation to buy, sell or hold any security or investment strategy. There can be no assurance that the investments shown herein were or will be profitable and this material does not take into account any investor’s particular investment objectives, financial situation, particular needs, strategies, tax status or time horizon.

The information contained herein does not constitute an offer to sell or a solicitation of an offer to buy securities. Investment products described herein may not be offered for sale in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful or prohibited by the specific offering documentation. The survey was conducted by Red Zone Marketing, a full-service marketing research consultancy. Incapital LLC and Red Zone Marketing are not affiliated.

©2020 Incapital. All rights reserved. Securities offered through Incapital LLC, Member FINRA/SIPC.

About Incapital

Questions?Contact Incapital at 888-849-5732 or [email protected]

Founded in 1999 by Tom Ricketts, our Chairman as well as the Executive Chairman of the Chicago Cubs, Incapital today

is a leading distributor of investments to more than 500 broker-dealers, institutions, asset managers, banks and

registered investment advisors. Since inception, the firm has represented more than 400 issuing entities and has

distributed more than $520 billion in new issue securities.

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