Adviser Delivery Methods Crucial for Potential Clients

LIMRA finds that consumers want a one-stop-shopping approach to financial advice, which allows them to receive guidance on all aspects of their financial life from a single source.

One third of consumers say delivery methods and costs are the most important factors they consider when seeking financial advice, according to a study by LIMRA. The organization also found that robo-advisers rank more favorably than human financial advisers, and the low costs usually associated with automated tools may be particularly attractive to consumers. However, LIMRA notes that, “While consumers recognize the need for professional advice, not all are willing to pay top dollar for it. Some consumers are willing to forgo a dedicated financial professional for the sake of cost.”

These findings seem to contrast a separate Millennial-focused study which recently found that return on investment (ROI) was the main value proposition among consumers who use robo-advisers and those who work with human advisers.

Still, a hybrid approach that combines robo-advice with the human touch received a score nearly identical to that of low-cost online tools. LIMRA says, “This may foreshadow a consumer preference for team-based practice models over solo practices.”

But regardless of how money management advice is delivered, trust remains a crucial value proposition, according to the LIMRA study. The organization says, “Whether the consumer is using an online tool or meeting in person, leveraging this inclination by using testimonials and focusing on building relationships that foster trust is essential.”

Advisers can generate trust through social media and some studies show that this is boosting client-adviser relationships.

Moreover, the organization finds brand recognition and company reputation play huge roles in getting consumers interested in seeking professional financial advice. In fact, the study found that even if consumers had at least heard of a company, they would rank it higher than one they’ve never heard of. LIMRA notes that “a company with strong brand recognition will have significant advantage over a company with a weaker brand even if the consumer doesn’t have a strong opinion going into the search.”

LIMRA also found that consumers prefer a one-stop-shopping approach to financial advice. They want to receive insight and guidance on everything money-related from a single source rather than going to multiple professionals. These findings suggest advisers can benefit from being versed in various factors in a person’s financial life from budgeting to planning for retirement and making sure tax efficiency comes into play.  

However, the LIMRA study found that referrals ranked lowest in importance when examining different factors consumers consider when seeking financial advice. However, the organization points out that referrals can also heighten trust and brand recognition – two of the leading components driving consumer decision making, according to the study.

These key selling points will be increasingly important for advisers to hone in on as they reach out to a potentially underserved market. LIMRA’s own research suggests that 45% of consumers admit lacking financial knowledge, but only one in four is working with a financial professional.

“Five Important Factors Consumers Consider when Seeking Financial Advice” can be found at