Press release
FlexShares Releases Behavioral Research for Financial Advisors on Growing Wallet Share
New study explores how to increase existing client assets Research identified five unique personality types driving behavior CHICAGO--(BUSINESS WIRE)--
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[{"type":"text","content":"\nNew study explores how to increase existing client assets\n\nResearch identified five unique personality types driving behavior\n\n CHICAGO--(BUSINESS WIRE)--\nNorthern Trust Asset Management’s FlexShares® Exchange Traded Funds announced today the findings from its latest research on how financial advisors can grow wallet share with existing high-net-worth (HNW) clients. While current research suggests that advisors need to improve their services to attract more assets, FlexShares’ study found that a client’s decision to increase his or her managed assets is driven more by emotions than advisor resources.\n\nFlexShares’ two-part behavioral study included both in-depth interviews with HNW investors as well as an online survey of them to determine the driving factors behind increasing wallet share. The research revealed that clients often bring to an advisor relationship strong feelings about what is “safe” or comfortable and how much they want their advisor to manage. In fact, 63% of investors based their initial investment on \"an amount that felt comfortable\" rather than an informed strategy. These feelings aren’t always well-articulated and can be unconsciously motivated. Further, these emotions aren’t consistent based on any single factor like net worth, the scope of services, or the source of wealth. This indicates advisors need to tailor their client conversations to personality, not assets under management.\n\nThrough its client interviews, FlexShares uncovered five key “personas” that drive behavior. The firm suggests that advisors be mindful of them when engaging each client type, as they will help address the emotional aspect of asset allocation. Market distribution percentages in the following client types represent approximations rather than exact percentages of the population.\n\n\nThe Verifier: Making up approximately 40% of the market, this is someone who generally trusts the industry and is likely to have some investment expertise. Verifiers are open to consolidating their assets with an advisor who wins their trust over time by demonstrating expertise and personal connection. Advisors can engage this group by proactively identifying any gaps in their wealth plan, having more holistic planning conversations, and offering incentives for increased assets like lower fees or access to restricted investment opportun...