Adviser Preferences Study Denotes Commitment to Clients

Advisers have a lot of choice when it comes to fine-tuning their business model, but they must know what matters most to which clients.  

Jefferson National’s second annual “Advisor Authority Study,” based on a Harris Poll survey of registered investment advisers (RIAs) and fee-based advisers, underscores the “tremendous change” facing all segments of the U.S. advisory industry.

Even as an influx of new technologies and the increasing influence of the Department of Labor (DOL) fiduciary ruling reshape the advisory industry, one priority highlighted consistently by advisers in the survey remains “knowing what matters most to clients.”

Mitchell Caplan, CEO of Jefferson National, explains that advisers utilizing various business models are all focused on providing personalized planning and comprehensive guided advice. There may be some disagreement among advisers when determining how best to accomplish that goal, he adds, but there can be little doubt the advisers across the board are searching out ways to boost personalization and responsivity in the client service effort.  

Looking across the U.S. adviser and client population, the study identifies two predominant investor profiles, dubbed “Return Seekers,” who tend to be younger and wealthier, and “Relationship Seekers,” concentrated among the older and less affluent.

The survey data shows the Return Seekers make up about 24% of investors who were profiled. Nearly three-fourths (73%) of Return Seekers are Millennials—and 69% have $1 million or more in investable assets. Important to note, 32% in this group say adherence to the fiduciary standard is their top factor for selecting an adviser. At the same time, 82% think volatility will increase—and 81% feel pressure to revise their strategy in response. The strong majority (72%) are confident that robo-advisers can manage volatility—and leveraging robos is one of their top factors for selecting an adviser.

NEXT: The relationship seekers 

The Jefferson National study goes on to suggest about 44% of investors profiled can be classified as “Relationship Seekers.”

This group favors passive investing strategies and high-touch engagement from advisers. Fully half (50%) of relationship seekers are Boomers—and 70% have less than $1 million in investable assets. In the group, most (74%) say years of experience is their top factor for selecting an adviser, while 65% think volatility will increase in the years ahead. Interestingly, only a fairly small minority in this group (14%) are confident that robos can manage volatility—and 33% are not familiar with robo-advice at all.

Beyond the investor profile types, the study identifies three adviser architypes that may be helpful to keep in mind when establishing new adviser-client relationships. The Tactical Managers, representing about 36% of advisers who were profiled, prefer active investing strategies and low-touch engagement. The second group, dubbed the Active Advisers (22% of advisers who were profiled), favors active investing strategies coupled to high-touch engagement. Finally, the Relationship Builders (36% of advisers who were profiled) favor passive investing strategies and high-touch engagement .

The study concludes there is “strong alignment between certain investor and adviser profiles,” as described above.

“For example, the Return Seeker investors and the Tactical Manager advisers, who prioritize active investing and low-touch engagement, tend to anticipate an increase in volatility, are likely to revise their strategy in response, and are more confident in robo-advisers,” the study concludes. “The Relationship Seeker investors and Relationship Builder advisers, who prefer passive investing and high-touch engagement, tend to be more concerned about low returns on investment, less likely to respond to volatility, and less confident in robo-advisers.”

To download their own copy of the study, financial professionals can visit