by The results were so shocking that YCharts ran its survey twice, and the results were similar: 75% of advisory clients in a February survey reported either leaving or considering ditching their advisor in 2023.
More than half (54%) actually did, while 9% merely thought about going to a robo advisor or a new firm. Another 12% made the move from a robo to a living advisor.
It’s a dramatic increase from the same survey last year when a “striking” 47% of respondents were found to have either switched or contemplated switching financial advisors between 2020 and 2022. That sample size was 671 respondents, compared with 775 in the 2024 survey.
“It’s important for us to note that these results may not be universally applicable due to the small sample size,” cautioned the report’s authors. “But the overarching theme remains clear: clients are seriously considering leaving their advisors.”
In its latest look at how advisors and their clients are communicating, investment research platform YCharts focused on learning what specific client segments are looking for when it comes to style and medium, as well as what strategies lead to stickier clients and better outcomes.
Eight in 10 clients would like to hear from their advisor at least four times a year, while only 63% do. Half of that contingent would prefer monthly outreach, compared with 28% that are getting it. Illustrating this point, two-thirds said they take the initiative and contact their advisor at least every two or three months, with 34% reaching out monthly or more.
Clients with more than $500,000 invested or over the age of 45 tend to want more communication, and they’ll be more proactive about getting it.
Just 5% of respondents were happy with how their advisors connect with them, even while the mix of virtual, in-person and hybrid meeting styles they collectively prefer closely resembled those being offered. This suggests advisors may benefit from allowing clients to choose from a menu of options.
Communication “holds the key to retention and referrals,” according to the YCharts report. The survey found that around eight in 10 clients would be more confident in (77%), more likely to keep (78%) and more willing to refer (81%) an advisor who communicates more often or more personally. This is especially true for clients between 30 and 44 or with more than $500,000.
Digging deeper, the report also found that having a “deep understanding” of clients and their goals is of paramount importance, slightly edging out investment performance with 56% of respondents. From there, it’s a stair-step down through financial advice received, accessibility, holistic planning service and fees charged at the bottom with 43%.
One clear link between communication and client satisfaction is around financial clarity. While a majority of advised clients in all identified cohorts said they primarily receive information about the markets from their advisor and the investment/CRM platform they interact with, social media, podcasts and blogs were also identified by anywhere from 5% to 38% of respondents. Further, they indicated that they’re understanding less of the information their advisors are sharing.
In aggregate, clients are only understanding an average of 64% of the content advisors are sharing with them, down from 70% last year. That percentage climbs back up to 71% for both clients with more than $500,000 and those who are contacted frequently.
Half said more informative emails would be helpful, while four in 10 want detailed reports. One-on-one conversations and visual education materials would be appreciated by 36% and 32% of clients, respectively. Online webinars were cited by almost a quarter, about the same percentage who said clarification on industry jargon and terminology would increase their comprehension.
Notably, 74% are investing some portion of their wealth independent of their advisor, a number that seems to grow with both the level of wealth and the need for attention.
One in five said they are uncertain or uncomfortable about the effect a recession could have on their retirement plan. The topics they’re most interested in learning about include investment opportunities, market trends and news, interest rates and economic insights, and tax planning techniques. But they also want to know the reasoning behind the management of their portfolio (29%) and the impact advisor fees are having on their account (25%).
To improve communications, YCharts says to “serve some clients champagne, others sparkling water.” Other recommendations include “commit to a cadence,” “explore other communication channels,” and “prioritize knowing your clients and their goals.”
“It would be time-consuming to send a personal note to every client over any period of time,” according to YCharts. “But serving those higher-value clients champagne (a lot of personalized communication) shows how much you value your relationship with them. Other clients might not warrant as much personalized contact, but would still appreciate sparkling water every now and then.”
However, an increasing number of advisory firms are looking to innovative tech to keep the champagne flowing without the onerous expenditure of time. Just this week, Keebeck Wealth announced a new partnership with a fledgling firm called Qdeck that provides asset management, research and client relationship management tools as CEO Bruce K. Lee works to create a “digital army.”
Three-quarters of wealth and asset managers in a smaller survey conducted by EY and Parthenon are already building or mobilizing generative AI teams—and enhancing the client experience was the main priority for 69%. Just 16% said they don’t currently plan to invest in the technology.
Qdeck is just one of the proliferating number of AI-aided client communication fintech tools, including Catchight and SIFA, seeking to make it easier for advisors to both scale and personalize communications.
