Bluerating | October 2023
In 2023, the level of satisfaction with the remunerative aspects of financial consultancy has been decreasing, as evidenced by the latest edition of FINER® CF Explorer, a yearly survey based on a sample of over 3.000 financial advisors.
The front fee, which rewards the acquisition of new clients, has been especially affected together with the management fee, which rewards the stock of assets under management in the portfolios of financial advisors.
There is nothing to worry about, at least for now. This is the result of the combination of market volatility (which has notoriously accompanied 2022 with negative consequences in terms of performance) and the rate hike.
More than any other financial professional, financial advisors remain today the bastion of asset management. However, over the first ten months of 2023, financial advisors have had to cope with a rise of assets under administration, the fall of life insurance policies, as well as the return of deposit accounts and bank bonds.
The predominance of assets under administration over assets under management (which will persist until rates decrease) has resulted in several financial advisors indulging the requests of their clients to subscribe BTPs, thus reducing the added value and consequently the remuneration of valuable consultancy.
In this rather bleak context, there are also some lights.
In 2023, the level of satisfaction with immaterial aspects of financial consultancy such as the involvement financial advisors in business decisions, the number of opportunities for discussion among colleagues, premiums and recognitions bestowed during conventions and plenary meetings has been rising.
Thus, paraphrasing a sentence from the Gospels, “not by bread alone shall live the financial advisor,” who is currently in need, maybe more than other professionals, of immaterial recognition.
Public recognition improves the reputation and the self-esteem of financial advisors, two key propellants that motivate professionals to reach new and increasingly challenging goals in challenging times.
Moreover, the importance of recognition as compared to retribution and premiums lies in its ability to grow the financial advisor’s sense of loyalty towards his/her bank/network.
In turn, loyalty contributes to building a team able to face daily challenges effectively and to guarantee continuity and a future to the business by generating a shared vision and perspective.
This is why, this year more than ever before, all ventures – be them traditional meetings, conventions, public award ceremonies promoted by banks/networks within and without companies themselves – have been gaining increasing importance and meaning.
The real value of money, meritocracy and economic recognition remain necessary conditions to motivate established professionals and attract new ones. And we are well aware of how much the sector of financial consultancy needs them.
However, money alone is not sufficient to ignite the sacred fire leading each professional through new daily challenges with a tailwind.
The world of financial consultancy realized this earlier and better than other sectors and this is the secret of their success.
Nicola Ronchetti