What Advisors Are Saying About 'Work From Home' And Other New Trends

Direxion and ETF Trends conducted an advisor survey in October 2020 to see how 2020’s work from home environment, made necessary by the COVID-19 pandemic, has affected advisors and the ETF industry. It’s led to a radical transformation of the U.S. economy.

Click here to download the Work From Home Financial Advisor Survey.

Wealth management was uniquely positioned in this transformation. On the one hand, many of the core activities of running a financial advisory practice are location agnostic – reporting, research, accounting, portfolio management. Yet the most critical part – actually working with clients – is inherently a person-to-person activity.

The survey explored multiple aspects of working remotely during the COVID-19 pandemic. Of the 2,169 respondents, the majority describe themselves as either asset gatherers or portfolio managers, with 55% saying that their client portfolios are 1-40% ETFs – “light users” of ETFs, with another 35% reporting using ETFs for more than 40% of their client assets. The survey covered a broad range of advisory practices, from senior managers, portfolio managers to self-described asset-gatherers, from firms ranging from sub-$100mm under management to over $25 billion in AUM.

Most advisors never worked from home prior to this, and most firms had very few remote workers. When asked what the intention was once the Covid-19 pandemic had abated to the point where returning to the office was viable, 83% of respondents stated they would like to continue to work remotely at least one day a week going forward. More surprising, 43% of advisors would like to remain remote at least 3 days per week, permanently. The implication from this is quite clear: advisors are comfortable that they can do their jobs, and do them well, without the need to go to a physical office every day.

In determining, on average, whether the pandemic had been positive or negative for their relationships with clients, the vast majority of advisors believe their relationships with clients haven’t fundamentally changed just because they—and their clients – are working remote.

When asked how their communication changed, advisors have stated they’ve been talking to their clients more – 70% reported increasing their use of video, which makes sense, but more than 60% report also just making more plain old phone calls. The majority are using new technologies, and a third have leaned into social media, creating proprietary content, or completely changed their marketing strategies.

In regards to new technologies, 85% have attended a virtual event. 75% have learned a new tech platform. Additionally, the majority of advisors report either working later, starting earlier, or both on an average day. Some of this is just the logical replacement of a commute, however, it’s worth noting based on the time being saved.

In a 2019 survey of advisors, 83% ranked themselves as sophisticated or very sophisticated in their use of technology. That held in the current survey as well, with 87% now reporting the same. Covid-19 has been a catalyst for continued growth here, with just under half the sample saying they have improved their tech skills during the pandemic, and a sizable group has leaned into using brand new technology platforms to connect with their clients.

Still, most advisors report their level of productivity has at a minimum remained the same, with some 24% reporting higher productivity during the pandemic than before.  Overall, 78% of advisors feel like their highly productive.

A big part of being effective in a remote work environment is having everything you need to get the job done. The vast majority of advisors report having access to both the physical and digital necessities to get their job done, whether that’s VPNs and file shares or simply having the right desk. Looking to the future, firms looking to make remote work permanent would do well to note that 26% of advisors still think they could have better computing hardware and software.

In understanding how the relationship between the issuers of ETF products and the advisors who use them has changed, the short answer is that the work from home environment has accelerated already existing trends in the marketplace.

Consistent with prior years, third-party ETF websites remain the most used source for advisors conducting research, along with industry publications, issuer websites and white papers, and webinars. When asked what issuer resources advisors have increased their reliance on, the digital components stand out.

Already the “gold standard” for advisor education, nothing has come close to replacing the importance of the webcast in this remote work environment, although there remain a small class of advisors who continue to lean into their personal contact with the ETF issuer’s representatives.

The unprecedented scenario found in 2020 has led to a major transformation for wealth management. The ways to handle sales, customer service, problem-solving, and reporting have been tested. While it was an unexpected situation, it’s also a good indication of what’s to come for the next generation of financial advisors. Remote work is going to continue to transform the economy, but the beginning of that transformation has clearly taken place fast than expected.

Click here to download the Work From Home Financial Advisor Survey.