89% of advisors said clients do not understand the volatility of these types of investments
Advisors & Vaccination: 60% will tell clients about team vaccination status, 37% said they consider being fully vaccinated a competitive advantage
Palm Beach County, FL – June 1, 2021 – According to the latest survey of 346 financial advisors released today by Incapital, LLC, a wholly-owned subsidiary of InspereX Holding Co., 67% said their clients are confused by their adult children who are encouraging them to invest in cryptocurrencies, and/or meme stocks, and/or hot ETFs.
The vast majority (89%) of advisors said their clients do not understand the volatility of these types of investments.
And while 58% of advisors said their clients are curious about cryptocurrency, or meme stocks, or hot ETFs, and 35% said their clients want to invest in these opportunities, 54% of advisors said that they “refuse” to let their clients invest in these types of investments.
Just 43% of advisors said their firms provide them with sufficient information to educate investors about these types of investments. And 47% of advisors also reported that their clients have opened electronic trading accounts at other firms.
These findings are from the fifth Incapital Pulse Survey conducted online between April 19 and April 25, 2021.
“The popularity of investments like cryptocurrencies has taken everyone by storm and reveals a generational divide,” said Chris Mee, Managing Director and Head of Wealth Management Solutions Distribution at Incapital. “Younger investors have time on their side and can afford to take the potential risks that accompany these types of investments. Older investors approaching or in retirement might be tempted to take the risk, but they may lack the time needed to recover from the impact of substantial losses, and not just from an investment like cryptocurrency, but even from over-exposure to equity market risk. Retirement-minded investors may benefit from risk-managed strategies that help them stay invested for growth, but with protection from too much downside risk exposure.”
Advisor 6-Month Risk/Opportunity Outlook
The financial advisors surveyed see the greatest risks over the next six months in cryptocurrencies (34%), followed by bonds (29%), and meme stocks (19%).
They see the greatest opportunities over the next six months in equities (41%), large cap value (25%), and emerging markets (20%).
Advisors, Vaccination and Back to the Office
At the time of the survey, 78% of advisors were fully or partially vaccinated, 10% were planning to be vaccinated, and 12% said they will not be vaccinated.
Asked if they will require their staff to be vaccinated, the advisors were divided: 32% said they will, 34% were unsure, while 34% will not. Another 31% said that they will fully reopen their office once their team is vaccinated.
Six-in-ten advisors said they will tell their clients about their team’s vaccination status; 40% will encourage clients/prospects to meet in person once they are fully vaccinated; and 37% said they consider being fully vaccinated a competitive advantage.
The majority (53%) of advisors said they are back to a normal, in-office schedule, up from 42% in December. Just 13% said they will not have their team fully back in the office in 2021.
In terms of client meetings, 26% said they are having in-person meetings with clients now, up from just 12% in December; while 46% plan to wait until the second half of 2021, and 21% said they will likely start in 2022.
Two-thirds said they believe prospecting and selling can be done effectively via virtual meetings. So far, 27% of advisors said they have held more than 10 virtual prospecting meetings in 2021, 49% have hosted between 1-10; and 24% said they have not hosted any.
“The good news is we’re seeing a lot of progress,” Mr. Mee said. “More advisors are back to the office, more are meeting with clients in person, and as more people are vaccinated this trend will continue. It’s been a challenging time, and advisors have been incredibly resourceful and committed to helping their clients manage volatile markets, all while being displaced from the office. Working virtually, we learned invaluable lessons about client communications; about being flexible, accessible, and responsive. The industry will take these lessons into the future and transform how it creates the client experience, and investors everywhere will benefit.”
About the Survey
The Pulse Survey sponsored by Incapital was conducted online via Qualtrics by Red Zone Marketing. A total of 346 financial professionals, including wealth managers, fiduciaries, financial planners and brokers from more than 50 broker-dealers and RIAs, completed the survey between April 19 and April 25, 2021. Responses were from financial professionals residing in 41 states. Click here to obtain the survey report.
About Incapital
Incapital was founded in 1999 and today is a leading underwriter and distributor of securities to more than 500 broker-dealers, institutions, asset managers, RIAs and banks. The firm represents more than 300 issuing entities and has underwritten more than $550 billion in securities. Incapital has offices in Palm Beach County, FL, and Chicago.
On February 28, 2021, Incapital announced its merger with 280 CapMarkets at the holding company level to form a new financial technology company, InspereX. The merger of the firms’ broker dealer businesses is expected in the second quarter of 2021, subject to customary regulatory approval.