Insights in Investment Management

Late last year, kasina, a strategy consulting firm in the financial-services industry, conducted its biannual Financial Advisor Vision survey of 2,521 advisors. The study revealed many interesting findings, including the fact that many Americans’ retirement nest eggs have been detrimentally impacted during the past few years, and quite a few middle-class Americans should expect to work well into their Golden Years. Advisor Today Blog recently interviewed kasina CEO Steven Miyao to discuss the findings in greater detail and to get some insights into how advisors should work with their asset managers to successfully meet the investing needs of their clients.

Advisor Today Blog: Your research indicates that the top concern for many of the advisors you surveyed is helping their clients accumulate enough assets for retirement. How is this concern different from other findings identified in past kasina surveys?

Steven Miyao: In the past, advisors were more concerned about short-term political as well as economical events that impacted the markets. The positive is that advisors care about the long-term success of their clients. The negative is the lack of clarity advisors have about how to get their clients to accumulate enough assets for retirement. This is where asset managers need to show more leadership in guiding these advisors, as well as in developing solutions that enable advisors to reach their clients’ goals.

ATBlog: How should advisors help their clients address this issue?

Miyao: This depends on their individual clients’ situations. Broadly, advisors need to reconsider modern portfolio theory and understand that most assets are highly correlated. Advisors need to include more non-traditional investment solutions to help mitigate risk.

ATBlog: We recently managed to avoid the much talked-about fiscal cliff. But what is the potential fallout from a fiscal cliff, and how should advisors and their clients address this issue?

Miyao: Advisors have to understand the limitations of our government and move beyond the political ideologies of the two parties. There are significant investment opportunities available, no matter what the government does. It is important to keep a long-term perspective.

ATBlog: More than 33 percent of the advisors surveyed expect their clients to retire at or after age 68, and some at or after age 71. This is a rather advanced “retirement age.” What is causing this need to delay retirement?

Miyao: There are a number of different factors at work here. On one side of the wealth spectrum, investors will have to work longer because they don’t have enough money to retire. On the other side of the spectrum, investors will be able to work longer.

ATBlog: How does this delayed retirement age affect the planning and investment advice advisors should give to their clients?

Miyao: The average investor is going to need the time to accumulate enough money to retire on, probably even more than what the advisors are estimating. Advisors understand that the main fear is that the investor will outlive his or her assets.

ATBlog: What are some of the digital communications tools advisors would like to use with their asset managers?

Miyao: There are two main underutilized digital communications:

1. Mobile tools. Advisors are increasingly utilizing tablets. From 2011-2012, the number of advisors using mobile devices to access business content increased from 69.9% to 76.8%. Furthermore, the percentage of advisors using at least two devices has increased from 20.9% to 32.4%. Asset managers need to build tools to help the advisor better understand new and more complex investment solutions. These should be delivered in such a way that they are directly usable with an advisor’s client.

2. Social media. Most asset managers are only using social media to broadcast content. Asset managers should start to mine advisors’ social content to get a better understanding of their advisors. Another opportunity exists to use the advisor’s network and preferences to provide more relevant content to the advisors.


By Ayo Mseka
Advisor Today