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Most Advisors Believe Clients Value Financial Planning Over Portfolio Performance

June 13, 2019

The majority of financial advisors believe that their clients care more about their financial planning services than their ability to outperform the market — and most advisors use model portfolios to allow them more time to focus on planning, according to a recent survey.

Seventy-eight percent of advisors believe their clients value planning, service and support more than beating the market, according to a study by Broadridge Financial Solutions, InvestmentNews writes. And 83% of advisors believe that resorting to model portfolios helps them spend more time on financial planning, the company said, according to the publication.

It’s not surprising, then, that 85% of advisors already use model portfolios, accounting for 54% of advised assets managed by the portfolios, according to Broadridge, InvestmentNews writes.

Sixty-five percent of advisors using model portfolios say their top reason to do so is business scalability; 50% say it’s for leveraging investment management expertise; 47% say it’s for attracting and retaining clients and 36% say the portfolios allow them to better address compliance and regulation, Broadridge found, according to the publication.

But among the 15% of advisors not using model portfolios, 69% say they definitely or probably will not start over the next two years, according to the survey cited by InvestmentNews. Fifty-one percent of advisors eschewing model portfolios believe using them complicates their ability to set themselves apart from robo-advisors, while 46% believe model portfolios are less effective during downturns or period of volatility, 45% say the portfolios complicate risk assessment and 35% are concerned that using them will make clients think they’re lazy, Broadridge found, according to the publication.

By Alex Padalka
  • To read the InvestmentNews article cited in this story, click here.