5 challenges for financial advisors in the current economic environment

Finances are probably top of mind for many right now, as COVID-19 decimates economies and disrupts industries all around the world. Some situations are more chaotic than others, but a looming sense of uncertainty and fear has led many individuals, business owners and investors to make ineffective financial decisions. Even investors that have an investment account with a Self-Serve platform might require additional knowledge and guidance from a seasoned advisor. Financial advisors may be feeling overwhelmed by demands for guidance. Here are a few challenges that advisors need to take note of and overcome.

Greater demand for special services

Are you a financial advisor who provides wealth management services?

Customers with specific needs look for specialist knowledge-based advisors, so designing your services around a particular niche can actually attract ideal clients. In fact, research from CEG Worldwide revealed that 70 per cent of advisors earning at least $ 1 million a year focus on a niche, but only 35 per cent of those earning less than $150,000 a year are specialized. This data suggests that it might be a good idea to hone down on a niche focus to grow your company’s offerings and bottom line if you haven’t already. 

A good example of providing specialized services might relate to knowledge on the divorce process and access to ancillary advisors. You may be better positioned to serve individuals who are experiencing a marital breakup. Another solution is to merge with complementary services and expertise from other advisory firms. You can present a more comprehensive service offering to customers looking for that “one-stop-shop,” by forming teams.

Financial Advisors

Keeping top of mind

It’s common practice to have your clients’ and prospects’ details stored – keeping a record is just the beginning of the process. If advisors want to remain relevant in times of crisis, it’s time to reach out on a consistent basis, providing value whenever and wherever necessary. Clients will appreciate that you go the extra mile for them. It’s important that they hear from you on a regular basis, if only just to be reassured that you’re working for them and staying on top of things. This also means that you are showing you care about the changes taking place in their lives.

When it comes to your prospects, it’s also crucial that you stay on top of their list of considerations. Those who aren’t in need of services right now may eventually need them down the line. When that happens, you’ll want them to call your number before anyone else.

Having a process for regularly scheduled professional emails and social media postings is among the most efficient ways to keep your network top of mind. Automated marketing services make it even easier for financial advisors to keep in touch with their networks without social media marketing requiring hours a day.

Keeping clients calm

Essentially, the main point is that financial advisors are uniquely positioned to help clients – nearly most of whom are currently under unusually high stress – by making mid-course alterations to their plans, by keeping the focus on the broader picture, by developing contingency plans, and generally by giving them some sense of security in these highly unpredictable times. More commonly, doing something – in terms of the financial plan – can help clients feel more confident and in control (even as advisors guide clients not to panic-sell from their portfolios).This too will pass as with everything, but the vital point is for clients to take steps to control those things that are in their control.

Neglecting the human touch in a digital age

The rationalization for traditional channels of distribution in the digital age remains one of the most significant long-term challenges that financial service firms face. Trying to determine how to mix the advantages of online and mobile channels with the need for human involvement (providing trustworthy advice, creative solutions, attempting to solve difficult issues, showing empathy) remains a significant challenge across subsectors of industries. For example, banks are struggling to optimize their massive real estate investments, as they have actively migrated basic transactions to mobile and online channels.

Even with all the technology that has made self-service alternatives possible, firms recognize that higher-value communication channels often require interpersonal interaction — a human to direct and advise the customer. Just as the retail industry has discovered, the winners in today’s dynamic marketplace are largely financial firms that effectively combine the advantages of digital tools and a physical presence (including human interactions).

Lack of regulatory preparation

You are well aware the financial firms are regulated by the SEC. Yet there have been controversies like the Enron and Wells Fargo scandals, Bernie Madoff and the financial crisis of 2008—and we can expect similar events to inevitably occur. In the future, most advisers expect more, not less, regulations.

It’s important to keep up with what’s going in the industry, as additional regulations would require intensive planning and resource allocation to ensure compliance will not derail your company’s profitability.


Hampton Wealth specialises in sourcing high quality, listed bonds and funds with a focus on providing returns in excess of normal off the shelf investment options.

Find out more at HamptonWealth.com

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