Simplifying Investment Choices Might Earn Client Trust

Many of your clients might be grateful and/or reassured if you could simplify investment choices for them. That’s one conclusion that might be drawn from the 2017 Scottrade® Retirement Study.* The survey polled 1,030 American adults who are involved in investment decisions for their household and have $2,500 or more in investments with a full-service brokerage company, online brokerage company or independent financial advisor. The results reveal areas where financial advisors might improve their performance.  

The study showed that investors who are currently using an advisor are even more likely than those who are not using an advisor to say they feel overwhelmed by all of the retirement investment choices (52 percent vs. 42 percent). In addition, 43 percent of investors currently using an advisor said they don’t always understand why they have the retirement investments that they do.

Failure to understand might lead to a lack of trust. The study found that 43 percent of investors who are currently using an advisor said they feel their advisor sometimes recommends products and solutions that are in their advisor’s own best interest.

And the study indicates the feeling of being overwhelmed and the resulting erosion of trust can lead to a break in the client-advisor relationship. Of the investors who said they feel overwhelmed, 58 percent said the fees they pay for retirement investments are not worth the service they get.

The survey showed investors under 50 years old are much more likely than older investors to question the choices advisors are making on their behalf. Eighty percent of Millennials and 72 percent of Gen Xers said they wish they had access to a more trustworthy retirement advisor. That compares to 49 percent of Boomers and 40 percent of Seniors.

 “The results clearly show that being overwhelmed can impact investor confidence, highlighting the important role an advisor plays in an investor’s experience,” said Brian Stimpfl, senior vice president and head of Scottrade® Advisor Services. “The study results shed light on the fact that there is a gap in explaining the products, investments and decisions being made to clients. Advisors have an opportunity to deepen that relationship and strengthen the trust between themselves and their clients by addressing this confusion and cynicism head on.”

For more information on the 2017 Scottrade® Retirement Study, visit https://about.scottrade.com/media/research-findings/retirement-study.html.

* About the 2017 Scottrade® Retirement Study 
Scottrade’s Retirement Study was conducted online from January 4 – January 17, 2017. The survey was conducted by Harris Poll, an independent third party research firm not affiliated with Scottrade, Inc., its business units or subsidiaries. The online survey was conducted among a nationally representative sample of 1,030 adults in the U.S. aged 18 and older who are involved in investment decisions for their household and have $2,500 or more in investments with a full-service brokerage company, online brokerage company or independent financial advisor.

This online survey is not based on a probability sample, and therefore, no estimate of theoretical sampling error can be calculated. For complete survey methodology, please contact mediarelations@scottrade.com.