I recently read a survey about investor satisfaction levels with their financial advisors.  The interesting twist was how sentiment has changed, pre- and post- (well, current, anyway) the COVID pandemic.
 
The article’s slant was that investors are less satisfied with their advisors now (“post” pandemic) than they were in January, even though the markets are recovering from their dramatic drop in the first part of the year.  Why would this be so?  If an advisor can show growth in a client’s investment account, but the client still isn’t happy, what gives?
 
The survey results indicated there are several key factors to investor satisfaction and confidence in a post-pandemic world.  Here, I’ll share three.
 
First, investors who worked with Independent Investment Advisors (RIA’s like Shadowridge) reported feeling more satisfied than those who worked with brokers, accountants, bankers, etc. 
 
This is not surprising to me, because I have observed that smaller, independent firms have the flexibility to respond quickly and adapt positively to changes, while larger brokerages often find it more challenging to do so.  Moving business online, for example, was natural for many of us who already had that technology in place and a company culture that leans in to change.  We had adopted DocuSign, GoToMeeting, and Zoom (to name a few) years ago to improve our efficiency.  As a small business, we have been able to be truly customer-focused rather than having to navigate a web of corporate bureaucracy.  This benefits our clients in helping them to adapt, too.
 
Second, according to the study, investors who feel they are working with an investment expert have a greater level of confidence than those who feel they are working with a firm of generalists. 
 
Again, this made sense to me (and made me happy to be working with a firm of specialists – see more below).  To think of it in personal terms, if you are concerned about an unusual medical condition, would you feel more confident working with a doctor who specializes in that condition, or a generalist?  Both are competent professionals, certainly, but you will likely feel more confident in the suggestions and observations of the specialist. 
 
Similarly, when you are working with your finances in an especially challenging environment, you are likely to feel more confident if you believe you are working with an expert, rather than a generalist.  This could be why the majority of our clients say they feel relatively calm in the face of uncertainty: each of us at Shadowridge has taken the extra time and care to dig deep into our training and intimately understand certain areas.  Ryan earned the Chartered Financial Consultant designation (and hopes to finish the Chartered Market Technician designation later this year) to deepen his understanding of the markets.  Phil earned the Behavioral Finance designation to understand how investor behavior, values, emotions, and goals work together to create better outcomes.  I earned the CERTIFIED FINANCIAL PLANNER™ (and am working on the Certified Financial Transitionist) designation to understand the tools to craft a holistic plan and navigate the psychology of change.  Our expertise goes far beyond simply selling mutual funds, and I believe our clients know that.
 
Lastly, and perhaps most importantly, the study reported that investors who have a financial plan are calmer and more confident amid uncertainty than investors who don’t. 
 
Ah, yes.  There certainly is something to be said about the power of a plan.
 
Planning can help you address emergency cash needs, or medical needs, or any number of financial life changes.  Again, I believe our clients are well served here because we’ve had these conversations.
 
Need to know what to do when the unexpected pops up?  Having stress-tested scenarios and different approaches can help you do this.
 
Need help focusing and putting current events into perspective?  Having a long-term plan to refer back to helps you remember what’s important and what’s just noise.
 
Need clarity on how to move forward when times are challenging?  Having a deeper understanding of the reasoning behind your financial and investment decisions makes those decisions easier.
 
Planning can also help you deal with changes in the stock market: market volatility isn’t something you can control, but having a plan for when it is prudent to be out of the market, and when it is prudent to get back in (like we have) can bring comfort.  Our clients tell us that recalling their plan – and not trying to guess what might happen next in a stressful situation – gives them peace of mind.
 
In the end, reading this survey helped me to reflect upon what builds investor confidence. 

People who are doing well at weathering the financial part of the COVID storm report feeling more confident because they are working with independent firms, who are staffed with experts and who have financial and investment plans in place—a simple yet powerful formula.
 
If you or a loved one are feeling less than confident in about your financial future at the moment, I hope you reach out to us.