Herbers & Company Study Reveals Disconnect Between Consumer Demands and Advisory Services

Consumer preferences point to need for enhanced tax, retirement planning services and adjusted investment focus

AUSTIN, Texas--(BUSINESS WIRE)--#AdviceOnCrypto--Herbers & Company, an independent, business management consultancy and research company, today announced the results of the 2023 Herbers & Company Service Market Growth Study. This comprehensive research, drawing responses from consumers and financial advisors, highlighted prevalent industry trends, and pointed out service gaps in relation to demand. Notably, a significant number of investors are seeking retirement and tax planning expertise, a need not fully catered to by existing firms.

Of the nearly 1,600 investors surveyed, a significant 90% voiced their need for tax planning assistance, and 72% expressed a desire for retirement planning support. However, advisors seem to be playing catch-up, with just 73% offering tax planning and shockingly only 67% providing comprehensive retirement planning services.

“The financial landscape is in a state of flux, especially with regards to tax policies and challenging economic winds. Investors, more than ever, are voicing their need for stability and clarity,” said Angie Herbers, managing partner of Herbers & Company. “Advisors should see this as an opportunity — a moment to not only bolster their existing tax and retirement planning services but to innovate and adapt, ensuring they remain trusted partners in their clients' financial journeys.”

Through a thorough examination of an extensive range of data points, the 2023 Herbers & Company Service Market Growth Study revealed five more notable findings:

• Client conversion disparities: The industry's top organic growers boasted a 73 percent conversion rate from prospect to client. However, the average advisory firm managed only a 33 percent conversion. Notably, companies embracing inorganic growth strategies, including mergers and acquisitions, experienced a 22 percent conversion. Meanwhile, firms emphasizing life planning saw only 10 percent of prospects transition to clients. Across the board, the yearly growth rate for total new clients in the last year averaged 14 percent.
• The client experience (CX) conundrum: Some of the fastest-growing firms expressed that their CX might not fully meet evolving client needs, suggesting a continual commitment to improvement. Meanwhile, around 36 percent of surveyed firms felt they were already delivering an exemplary client experience, aligning with or even exceeding industry standards. This variation underscores the industry's broad range of self-perceptions when it comes to client satisfaction and service excellence.
• The diminishing draw of investment management: While two-thirds (66 percent) of firms provide investment management services, just half of the investors surveyed demonstrated interest in such offerings. This disparity could spell challenges for firms that are exclusively aligned with investment management. As the market's needs evolve, it might be beneficial for these entities to diversify their services to accommodate the broader interests and concerns of today's investors.
• Misalignment of comprehensive wealth management definitions: Although 77 percent of firms self-identified as comprehensive wealth management firms, the study identified that financial advisory firms have vastly different beliefs about what comprehensive advice includes. The study revealed that there are over 250 differing combinations of services that advisors believe make their firms comprehensive. With such a disparity in what services comprise comprehensive advice, there’s a critical need for the industry to define “comprehensive” to minimize consumer confusion.
• The crypto advisory void: Of those with substantial assets—specifically, individuals with $250,000 or more in investible assets—a noteworthy 10 percent have expressed an interest in obtaining financial guidance on cryptocurrency. There's a void in the market, as none of the surveyed advisory firms offer this specific service. While cryptocurrencies might be a polarizing subject among professionals, there's an evident demand from clients. Filling this gap could pave the way for advisors to have deeper conversations with clients about the pros and cons of emerging asset classes, ensuring they remain relevant and adaptable to the evolving financial landscape.

“The insights from this study underscored a clear disparity between what the industry offers and what clients truly want,” explained Herbers. “It's evident that the emphasis on traditional investment management services is not resonating as strongly with today's investors. Now, there's a need to recalibrate and offer services that align more closely with investors. The firms that do so will have a competitive advantage."

The 2023 Herbers & Company Service Market Growth Study compiled feedback from 1,598 investors and 724 advisory firms. The data was collected throughout 2023. To ensure comprehensive insights, investor information was sourced through a reputable third-party data service, encompassing a balanced representation across age, income, and gender. For advisor data, Herbers & Company leveraged its mailing list, technology vendors, and media outlets catering to independent financial advisors.

Further research findings will be shared by Herbers & Company in a webinar on October 12, 2023, at 4:00 p.m. CT. To learn more about the study and sign up for webinar, register here.

About Herbers & Company

For more than two decades, Herbers & Company has been a leading management consulting firm serving independent financial advisory firms. Founded by industry influencer Angie Herbers, we consult on eight areas of practice management: leadership, succession, organic growth strategies, client experiences, operations, human capital, sales, and marketing. We have guided more than 1,000 advisory firms through the development and implementation of strategies that expand revenues, profits, and valuation. Herbers & Company includes a management consulting division, our online Academy, which trains advisory leaders, and our research division, which identifies trends impacting advisory firm growth.

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Allie Zendrian
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516-581-7202