2006 Across Generations Survey Assigns Premium to Soft Skills

New York, NY – December 4, 2006 –Financial advisors should deliver more than solid investment performance if they want to retain clients, finds “The Five Attributes of Highly Successful Financial Advisors”, the latest executive summary of MainStay Investments 2006 Across Generations survey.  MainStay found that an advisor’s ability to provide meaningful advice, build trust, and attend to personal needs are considered “top advisor must-haves” by over 85 percent of investors who use a financial advisor.  The report also addresses investor perception of advisors’ professional credentials, and behaviors that advisors ought to avoid. 

“Investors are deciding whether they will work with a particular advisor based on factors such as trust and personal attention; quantitative metrics and product offerings are irrelevant if these ‘softer’ attributes are not there,” notes Christopher Blunt, president of MainStay Investments. “Our results suggest that advisors need to rely on interpersonal and counseling skills to forge deeper relationships with their existing clients and cultivate new ones with potential clients.”

Added Blunt, “Baby Boomer investors, who are grappling with uncertainties about their retirement today, are particularly sensitive to advisors’ relational skills.  They want to work with advisors who demonstrate concern for more than just the current performance of the investment portfolios; 73 percent say they want someone who will counsel them on preparing for retirement and 60 percent say they seek advice on generating income in retirement.”

Top Five Attributes

Listed below are the top five attributes of financial advisors, as reported by the 1078 respondents to the 2006 Across Generations survey who indicated they already have an advisor or are considering working with one.  Each of the five attributes listed below were ranked as being “extremely important” or “very important” by more than 80 percent of these individuals.

1. Tailor YourAdvice: When it comes to investing, clients want advisors to weigh in with knowledgeable advice and expertise, and to refrain from taking a one-size-fits-all approach (88 percent).
2. Be Trustworthy: Today’s investors want their advisors to convey a feeling of trust from the onset and work to build that trust throughout the relationship (85 percent).
3. Address Personal Needs: Investors want advisors to ask about their concerns – i.e., caring for aging parents, paying for college, saving for retirement - and to address them (85 percent).
4. Control Expectations: Investors expect to achieve above average returns (82 percent).
5. Communicate Frequently: Investors want advisors to maintain consistent and ongoing communication, be responsive to their concerns, and demonstrate a thoughtful and genuine interest in their well being (80 percent).

The study found that 52 percent of investors are looking for more than investment planning advice from their financial advisors whether it be college savings or retirement planning.  These findings explain investors’ interest in working with advisors with whom they feel at ease and who take a longer-term, relationship building approach to their business.

The Role of Credentials

The 2006 Across Generations survey found that an advisor’s affiliation with a firm, and his or her professional credentials, are criteria that are simply baselines for consideration by investors, not differentiators. For example, 50 percent of investors surveyed find firm affiliation “extremely important” or “very important” when choosing to work with a financial advisor. 

In addition, 56 percent of investors placed similar importance on advisors holding professional designations.  It is worth noting that while 71 percent of mass affluent investors currently work with advisors who have at least one professional designation, 40 percent admitted not completely understanding the benefit of the designation.  Advisors who take the time to illustrate the benefits of their firm affiliation and their professional designations to clients and potential clients will deepen these relationships.    

Meeting Your Clients Growing Expectations

The survey indicates that, despite his or her technical expertise or financial acumen,  advisors may not be able to win new clients or retain existing accounts without an emphasis on the “high touch” communication skills that are critical to facilitating relationships.

Advisors should consider the following when working with clients:

•          Avoid indulging your inner salesperson – Nearly half (48 percent) of investors believe that advisors focus on making money instead of helping clients.        

•          Don’t be a stranger – Surprisingly, 43 percent of investors said that advisors don’t stay in touch. 

•          Avoid the cookie-cutter approach – Some 40 percent of investors complain that advisors take a one-size-fits-all approach. 

•          Show interest in all clients – Another 40 percent of mass affluent investors think advisors only care about their wealthy clients. 

In the eyes of the mass affluent, successful advisors embrace a skill set that goes beyond product selling and hitting the numbers.  Mass affluent investors value advisors who are client-centered and take a personal approach to building relationships.  An advisor’s ability to draw on these skills can result in better client retention, an increase in referrals, and additional assets.

About 2006 Across Generations Research

In its sixth year, the MainStay Across Generations survey continues to measure the differences in investment behaviors and attitudes among generations. The 2006 Across Generations study was conducted by an online research firm in May 2006. The study polled 1,512 individuals between the ages of 27 and 83, covering four different age groups: GenXers (born 1965-1979), Late Baby Boomers (1956-1964), Early Baby Boomers (1946-1955), and Seniors (1945-1923). Respondents had at least $250,000 in investable assets. The analysis was broken down by generational cohorts and sub-divided by gender. The research has a confidence level of 95 percent.      

About MainStay Investments

With over $20 billion in assets under management, MainStay Investments is the retail arm of New York Life Investment Management, its subsidiaries and affiliates. We offer individual investors an uncommon opportunity: inherent product diversification over 30 mutual funds, captained by boutique portfolio managers across different institutional investment engines. 

Media Contact:

Nancy Paris                                                                  Alyson Nikulicz
New York Life Investment Management LLC                     Makovsky + Co.
Nancy_Paris@nylim.com                                               anikulicz@makovsky.com
(973) 394-4410                                                               (212) 508-9616

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