Remote work has been a challenge for advisors trying to
serve clients during the COVID-19 pandemic, a recent study revealed. More
specifically, nine out of 10 advisors said that not being able to meet with
clients in person has had the biggest impact while social distancing measures
are in effect.
Market factors including low interest rates and increased
market volatility have also been disruptive to advisors’ practices, the study
This study, “COVID-19 Social Distance and Distribution:
Advisor Survey Summary of Results,” was conducted by LIMRA, the Insured
Retirement Institute, Oliver Wyman and the National Association of Insurance
and Financial Advisors. In May 2020, more than 400 financial professionals in
distribution selling insurance, annuities and investment products were surveyed
to determine the biggest challenges they face while adhering to social
distancing guidelines during this pandemic.
“For many advisors the human connection is a critical part
of developing a trusted relationship with clients. According to our research,
nearly two-thirds of advisors are now working from home creating new challenges
in the advisor-client relationship,” said David Levenson, president and chief
executive officer, LIMRA, LOMA and LL Global. “Our study shows carriers and the
industry have helped advisors continue to drive successful client outcomes
through customized training and digital tools designed to help them operate
optimally in this virtual environment.”
The survey also found:
Revenue, profitability, and bringing on new staff are the
most challenging business aspects advisors face in the current environment.
Despite those challenges, advisors have a positive outlook on maintaining
operations and their existing clients and staff. They also remain somewhat
positive towards prospecting and bringing on new clients.
Across most products, advisors are expecting a 1%-10%
decline in sales in the second quarter compared to what they forecast for the
second quarter prior to COVID-19. Advisors believe that working from home makes
them less effective at selling products. However, advisors remain optimistic
that they will hit their pre-COVID sales volumes for life insurance products.
Meeting with clients in person is the biggest disruption to
their practice. Advisors current work environments are evenly split among
working from home full time, working from home part time, and continuing to
work from their offices. The study respondents view prospecting new clients,
initial planning meeting with clients and product sales meetings to be a
moderate challenge in times of social distancing. Advisors have been able to
navigate changes to products and virtual meetings with staff and wholesalers
with minimal disruption.
Advisors are looking for support in reducing or changing
compliance requirements and switching to digital fulfillment. More than 90% of
advisors said they have support for changing or reducing compliance
requirements. Nearly all (97%) said they had support in switching from paper to
digital fulfillment. Almost all (98%) said they wanted support from their
wholesalers, and 94% said they wanted webinars on investment and insurance
volatility is the top client concern, followed by low interest rates and
questions about policy coverage related to COVID-19.
Clients Worried About The Economy
As the pandemic spread and social distancing measures were
implemented, 7 in 10 advisors increased their communications with their
clients. They said their clients’ top two concerns were stock market volatility
(74%) and low interest rates (45%). Other things on clients’ minds include job
and income security, current and future income stability, and life insurance
coverage issues — including whether their policies will cover COVID-19.
“Even under normal conditions, consumers worry about making
the right financial decisions,” said Wayne Chopus, IRI president and chief
executive officer. “These are extraordinary times and consumers need the
support and guidance of their financial advisors to help them make sound
choices about their investments and take steps to protect their families. As
advisors communicate more with clients, they can help alleviate anxiety by
reinforcing the benefits of a comprehensive financial plan that includes
products providing guaranteed lifetime income and financial protection.”
How The Pandemic Shifted Business Activity
Eight in 10 advisors say they are selling more to their
existing clients, with a quarter selling exclusively to their existing clients.
Less than 1 in 4 have reported selling more financial solutions to new clients.
Most advisors say social distancing has made it more challenging to find new
clients and conduct initial planning activities with them. Advisors surveyed
said they would value more help with virtual prospecting and lead generation.
“It is not surprising that social distancing measures have
impeded advisors’ ability to gain new clients,” said Scott Campion, partner,
Oliver Wyman. “Especially since we don’t know when or how business will return
to normal, the industry needs to identify ways to help advisors virtually
connect with consumers who need the solutions to achieve their financial
Despite the challenges, the study reveals 8 in 10 advisors
are optimistic about their ability to maintain their practices and serve
existing clients. While many expect investment and annuity sales to fall less
than 10% in the second quarter (compared with pre-COVID-19
expectations/forecasts), advisors expect sales of life insurance to remain
“The pandemic has disrupted business practices across all
industries, driving companies to seek innovative solutions to connect with
their customers. Our industry is no different,” said Kevin Mayeux, chief
executive officer, NAIFA. “While traditionally, our industry has relied on the
face-to-face model to help Americans address their financial concerns, the
silver lining in all this is we are seeing advisors adapting and leveraging
digital platforms to stay engaged with their clients.”
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