Independent Financial Advisor Market Research

Financial Advisor Market Research

Who are Independent Financial Advisers (IFAs)?

Independent Financial Advisors are professionals that provide financial recommendations, advisory and financial services to consumers.  They are not part of global banking networks, and therefore considered independent.

The financial services industry has undergone sweeping changes over the last few years. The current landscape constantly makes reference to the maturity and siloed nature of technology applications that reside within many financial services organizations.

Furthermore, as financial institutions assimilate legacy systems through M&A, add new customers in new markets, and begin to offer a wider array of new products, such as brokerage and insurance services, they (in particular the larger players) are reevaluating how they manage customer relationships and taking an integrated look at customer value.

Small and Midsized Businesses

Small and medium sized organizations (SMBs) such as general insurance brokers, life and pensions brokers, fund managers, and foreign banks are under increasing pressure to remain viable as large banks and insurance companies continue to make inroads into their markets.

Furthermore, demanding compliance requirements and increasing competition from within their ranks are placing additional pressures on these organizations to remain viable. Their overarching goal is to maintain their appeal as the local market alternative to upper tier firms and in order to do this, they need to be proactive in how they manage their customer relationships and also how they can derive more accurate customer value.

Customer Relationship Management with Independent Financial Advisor Market Research

A logical solution for the two aforementioned issues comes in the form of Customer Relationship Management (CRM) systems.  Effective and efficient CRM solutions that are specifically created for and targeted at the SMB space, can help smaller financial organizations increase revenue while maintaining their forte of superior customer service.

Opportunities and Challenges in Mature Markets

Consumers in mature markets such as the UK, US and Western Europe are running out of steam. American and British spenders have weak balance sheets – low savings, high debts and fear of rising interest rates. Independent financial advice suggests that we are shopped out. But the Asian consumer has built up high savings and has little or no debt, while the credit card culture is in its infancy. They’ve been putting money away since the late 1990s Asian debt crisis, but they are going to want to spend it some time.

Digital Innovation and Disruption

Technology will be a key issue in the race to improve profitability. Although the IFA industry has followed the main technological trends of increased speed and easier access to data, there is a general feeling that providers have failed to improve technology to make things easier for advisors, and instead are competing against each other to the detriment of the advisory industry.

However, if administration is improved, the income IFAs derive through sales will have a higher impact, and will enable them to achieve high levels of repeat business through improving their communications and information systems.

Another key issue affecting the long-term future of the business is the problem of an aging profession. There are not enough new advisors coming into the market, which seriously threatens the future of the industry. Because the average IFA is a lot nearer to 55 than 25, their perspectives tend to be narrower and their goals more short-term, making them less responsive to change and less keen to take advantage of new products such as wraps, which require a long-term view.

However, some fear that technology may eventually reduce the need for financial advice. With the rise of Robo Advisors and Artificial Intelligence, the Financial Advisory and Wealth Management industries are being disrupted.  On some insurance websites, for example, the entire term assurance application can now be completed online, removing the need for an advisor.

Competitive Landscape

A more competitive and complex landscape for financial services providers is forcing many organizations to reevaluate existing channel strategies. This is especially true of small and medium sized organizations looking to remain a viable alternative to their larger counterparts.

Strategic investments / upgrades in CRM systems can help smaller financial organizations such as independent financial advisors, life and pension brokers, general insurance companies, building societies and similar firms improve revenue generation while reducing costs and maintaining superior customer service advantages.

Channel Intelligence

Even though the internet is a significant and cost effective sales and service delivery channel, fund managers, IFAs and other smaller players cannot afford to rely only on one channel over another because this would limit functionality and product options and hence, customer service. With customers using any combination of the channels available to them, it is essential that SMBs form a coherent multi-channel strategy. While offering a range of channels may be seen as a positive attribute, if they remain siloed and are not fully coordinated they can have a negative impact on customer experience and ultimately on the financial organization itself as well.

About Independent Financial Advisor Market Research

Independent Financial Advisors are important decision makers who influence the decision to purchase or trade securities.  They can influence decision making on a large amount of assets, and their opinions matter.  Market Research uncovers the decision making processes of IFAs.  Research also uncovers insights into consumers seeking Financial Advisory services.

We conduct Qualitative, Quantitative and Strategy Research.  Qualitative Research includes Focus Groups, Customer Interviews, Ethnography and Online Communities.  Quantitative Research includes mobile, telephone and online surveys. Strategy Research provides Competitive Analysis, Market Opportunity, New Product Concept Research and Go To Market Strategy.

Contact us for your next Market Research and Strategy Consulting Project.

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