Bluerating | June 2022

Financial networks have survived, unharmed, the outbreak of the war in Ukraine. Besides, their rampant growth has yet to come to a halt.

The first three months of 2022 have registered a positive balance (€13,9 billion), with an increase of 7,2% as compared to 2021, a record year in itself (source: Assoreti).

A few days after the Russian attack, FINER started a monitoring of the clients of financial advisors aimed at identifying the reasons of this success.

The week after 24 February registered an increase of 75% in the number of interactions between financial advisors and their clients.

In particular, 29% of clients contacted their financial advisors, while 46% of financial advisors got in touch with their clients.

The number of interactions has increased by 34% compared to the average. The means of communication are mainly the phone (98%), emails (64%) and WhatsApp messages (42%).

In 29% of cases, an in-person meeting followed remote interactions.

Among the reasons for the increase in the number of interactions between clients and their advisors are requests for clarification about investments (74%), the desire to settle their position (21%) or to increase their investments (17%).

Over the following weeks, the numbers settled. However, the number of interactions between advisors and clients kept growing (25%) compared to the average.

The outcome of these interactions is quite interesting: 85% of clients felt reassured by the explanations provided by their financial advisor.

Thus, identifying the secret behind the success of the model of financial networks is quite easy.

Constant interaction, which intensifies when the market situation gets complicated. After all, some financial networks have turned such moments into profitable occasions to collect assets.

The majority of financial advisors has adopted a mantra: in moments of high volatility of the market, never panic; instead act opportunistically, investing to a minimum.

Numbers speak for themselves. And, most importantly, they confirm an unequivocal element: with no professional reassuring the most susceptible clients, every change in the market would lead to a true carnage of portfolios.

Another clear element: the ability of single professionals to identify different types of investors among their clients.

There are susceptible clients, who need constant reassurance; rational clients, who need numbers and evidence to support their decisions; finally, some clients tend to delegate and do not worry much.

The universe of end investors is very heterogeneous. Each client deserves a different approach and to discuss the time horizon of their investments. Moreover, today discussing the risk profile is all the more necessary.

The pandemic represented an important test bench. Indeed, it implemented remote communications, contributing to the creation of a new client-advisor intimacy, based on closer contacts and immediate understanding.

Today, communication can and often does happen in person. However, the efficiency of remote communication, easily experienced over the past two years, has strengthened personal relations.

In the end, what counts is having a good word and financial advisors have one for each of their clients.

Nicola Ronchetti