Financial Professionals Focus on Human Dynamics in Response to Growing Digital Competition

Human skills matter in an increasingly digital world
Robo-advisors. Industry disruptors. Enhanced do-it-yourself tools. How can financial professionals differentiate themselves in an increasingly digital world?

Counterintuitively, many say that improving the human dimensions of their practice may be the key to standing out as the world becomes more automated. They say that competing in the digital age means they’ll need to focus more and more on client relationships and communication. And they know in order to succeed, they’ll need to continue to adapt and evolve.

Our recent Global Survey of Financial Professionals sheds light on how they plan to navigate their biggest challenges and make stronger client connections by enhancing their soft skills.

The competitive landscape is changing. Dramatically.
In response to their rapidly changing industry, many financial professionals are reevaluating what their business might look like in the next five years.

	Now	In five years
Traditional financial professionals	69%	31%
Automated advice platforms	14%	24%
Improved tools for self-directed investors	8%	23%
Industry disruptors	7%	21%

They’re facing a number of challenges, from changing regulatory requirements and client management issues to a range of business pressures, including:

• Integrating digital services (68%)
• Increased fee pressures (62%)
• Greater client demand for passive investments (41%)

Financial professionals will have to adapt
That means they’ll need to be one part investment expert—and one part business manager. Especially since 3/4 believe that the real route to business growth will be found in winning new client assets.

How will financial professionals respond to growing business pressure?

• 45% Drop lower balance clients from their book of business
• 20% Adopt third-party portfolio models
• 18% Add an automated advice front end to their service model
• 12% Find strength in numbers and merge with another firm
• 11% Leave the advice business altogether

Soft skills may help financial professionals stand out

• 7 in 10 advisors say they need to develop client communication skills
• 8 in 10 describe their role as guiding clients through the emotional side of investing
• Fewer than 20% forsee losing clients based on industry disruption or the quality of digital advice

Many financial professionals see soft skills as core to their role with clients. 86% of financial professionals believe their success depends on their ability to manage client return expectations. And 81% feel it’s their job to help prevent clients from making emotional decisions—something that’s critical during times of market volatility.

What role do financial professionals play with clients?

Guide clients through emotional side of investing	78%
Provide ongoing education	68%
Guidance on identifying and achieving life goals	64%
Help navigating life events	57%
Help with family-related affairs	41%

When it comes down to it, financial professionals understand that these skills are essential to working with clients and could help them retain and/or grow business. In fact, they say that the lack of soft skills actually contributes to losing clients.

Top reasons financial professionals lose clients

• 70% not communicating frequently enough
• 56% not listening to client needs
• 53% failing to demonstrate value beyond asset allocation

Emotional intelligence tops artificial intelligence
Financial professionals can find many opportunities to put these new soft skills into action as they look to enhance the service experience for clients. For example:

1. Risk needs to be seen in more personal terms
2. Estate planning needs to go beyond just the will
3. Investing in values with ESG (Environmental, Social & Governance) investments will become more important

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Read the full report
Learn more about how financial professionals are differentiating themselves in an increasingly digital world.

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About the survey
Natixis Investment Managers Global Survey of Financial Professionals, conducted by CoreData Research in March 2018. Survey included 2,775 financial professionals in 16 countries with the aim of better understanding the perspectives, challenges, and needs of this key collective of individuals to the financial services industry.