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Although fees are an important part of the conversation betweenfinancial advisor and client, a holistic menu of services and a focuson financial planning are stronger indicators of value for topadvisors, according to a studyreleased Wednesday by Carson Coaching, a financial advisor coachingand resource program.

The study found that clients who believe their financialadvisors provide more services and lead with planning areconsistently more confident about their own retirement, and arelikelier to be highly satisfied with their advisor and to believethey receive adequate value for the fee they pay.

However, many advisors in the study were not exhibiting thelevels of planning and transparency that clients said providedvalue for cost.

"With a notable uptick in individuals reaching out to financial advisors forthe first time in their lives due to the coronavirus and marketupheaval, there's no better time for advisors to reexamine andadjust their value proposition and how they engage with clients,"Jamie Hopkins, managingdirector of Carson Coaching, said in a statement.

Hopkins said some of the study's data challenged what he viewedas industry best practices. For example, value was stronglycorrelated with the number of interactions between an advisor and aclient.

Hopkins noted that many of these interactions have had to shiftto phone and videoconferencing because of social distancing effortsto combat the spread of COVID-19, indicating that in times ofuncertainty human connection is critically important.

"The traditional once or twice a year reach out is simply notenough for most clients," he said.

Carson Group conducted and analyzed surveys in December among129 advisors and more than 1,000 investors with at least $100,000in investable assets. 

Key findings

Ninety-four percent of respondents who said they knew how theiradvisor was compensated felt they received adequate value, comparedwith only 82% who did not have that transparency.

The survey results showed that conversation around compensationincreased with wealth. Three in five respondentswith more than $1 million in investable assets said knowing theiradvisor's compensation model was extremely important, versus halfof those with $100,000 to $299,000 in investable assets.

The study also found that straightforward language was importantin communicating with clients. Many respondents were not clear onthe meaning of "fiduciary," and were likelier to understand whentheir advisor used common vernacular, such as acting in their "bestinterest."

Long-term care and estate planning are often the last planningtopics covered between an advisor and client, yet 61% ofrespondents with an estate plan in place reported high confidenceabout retirement and 74% expressed high satisfaction with theiradvisor.

Moreover, 65% of clients who said they had received a formalwritten plan from their advisor felt highly confident aboutretirement, compared with 54% without a written plan.

"The research shows that advisors should lead with planning ifthey want more satisfied clients, and they should document thoseplans meticulously and communicate them thoughtfully and often,"Hopkins said.

"The new best practices uncovered in our study will be criticalas advisors seek to reinvent their value and guide their clientsforward in 2020 and beyond."

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