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Fewer than six in 10 advisors and financial professionals expect the profitability of their practice to increase in the next 12 months. This number is down significantly from 81 percent in 2019.
"What stands out in 2020 is that the pandemic was an outsized challenge for advisers and financial professionals at every level, even the most successful," said Craig Hawley, head of annuity distribution for the Nationwide Retirement Institute.
The institute recently polled more than 2,500 advisors, financial professionals and individuals about their strategies for success in the current economic environment. Among the findings:
Focus on solutions. When asked what will be most important to enhance profitability over the next 12 months, successful advisors and financial professionals were more likely than the previous year to say that the push for new clients remained their top driver (50 percent in 2020 vs. 41 percent in 2019).
Along the same lines, attracting and retaining clients' heirs (29 percent) and targeting high-net-worth clients (28 percent) were a distant second and third.
Technology also is important for successful advisors and financial professionals to enhance profitability over the next 12 months, including adding new technology (22 percent) and consolidating technology (17 percent).
Putting technology to work. When asked which technology would help them better serve clients over the next 12 months, "e-signature" solutions were most prevalent (29 percent), with financial planning software (26 percent), tools for risk management (19 percent) and CRM (19 percent) also among their top choices.
Protecting clients. Most successful adviseors and financial professionals (96 percent) said they had a strategy to protect their clients' against outliving their savings. Likewise, nearly eight in 10 said their clients likely would feel more secure if a portion of their portfolio were invested in an annuity to protect against outliving their savings.
Targeting new clients. To drive greater growth of their business and build a strong base for the future of their practice, successful advisors continued to target a new generation of clients and adopt strategies to retain the heirs of their current clients.
Asked which generation of investor would be their primary target over the next 12 months, they moved away from millennials (28 percent) to Gen Xers (37 percent) and also increased their focus on boomers (19 percent).
Marketing innovation. To extend their reach, build brand equity and capture their share of new clients, successful advisors and financial professionals are more likely to have changed their marketing strategies to attract the next generation (58 percent vs. 52 percent).
Their top strategies included working more with clients' family and children (28 percent), increased use of mobile technology (26 percent), increased use of social media (26 percent) and socially responsible investing (24 percent).
"There is one thing that comes through crystal clear," Hawley concluded. "It is more important than ever to adapt your practice and adopt the CEO mindset of successful advisers and financial professionals in order to manage today's complex dynamics and position your firm for future profitability."
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