J.D. Power Wealth and Lending Intelligence Managemen… · Mobile Website Investor Digital Engagement Increases Modestly COVID-19 impact on firm/advisor website and mobile app usage

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J.D. Power Wealth and Lending Intelligence

Wealth Management COVID-19 Investor Pulse Study


COVID-19 and Markets

• COVID-19 caused a rapid and steep decline in equity markets in March. While markets have recovered much of those losses, volatility and economic uncertainty remain very high.

• This survey was fielded between May 27 and June 5, and provides insights based on responses from 521 U.S. investors on experiences and perceptions during the period since the emergence of COVID-19 on a range of topics:

• Advisor contact frequency and channel usage

• Portfolio management decisions

• Digital engagement

• Confidence and loyalty

2

Survey Period

(5/27-6/5)

Market Volatility Creates Investor Uncertainty S&P Weekly Trend (Jan-June 2020)


Advisor Contact

• Nearly two-thirds (62%) of respondents indicated they work with a financial advisor.

• Among those working with an advisor 31% have not been in contact with their advisor since COVID-19 emerged.

3

Advisor use

Nearly One-Third of Advised Clients Have Not Heard From Their Advisor Since COVID-19

31%

28%

23%

18%

No recent advisor contactOne contactTwo contactsThree or more contacts

62%

38%

I work with a financial advisor

I don't work with a financial advisor

Advisor contact among

those working with an

advisor


Advisor Channel Usage

4

0%

1%

2%

2%

7%

10%

10%

12%

57%

74%

1%

2%

5%

5%

5%

41%

17%

19%

55%

71%

Other

Social Media

Chat

Mobile App/SecureMessaging

Postal Mail

In person meeting

Text

Video conference

Email

Phone call

Desired contact channel Recent contact channel

• With social distancing drastically reducing in person meetings, phone and email have remained by far the most used channels for advisor/client communication.

• While traditional channels remain most desired, advisors are still significantly trailing what clients want in terms of the use of emerging digital channels, especially video and texting.

Despite COVID-19, advisors

have not embraced channels

like video and texting to the

degree their clients would prefer

Despite COVID-19, Advisors Slow to Adopt Digital Channels Many Investors Want

Advisor contact channels used since COVID-19 and desired by investors


Advisor Contact and Portfolio Management

5

4%8%

16%

59%

13%8% 8%

32%

44%

8%

Decreaseinvestment (e.g.allocate more to

cash)

Increaseinvestment

Re-balanceportfolio based

on marketchanges

Nothing Undecided

No advisor or no recent advisor contactOne or more recent advisor contacts

Advisor Interaction Drives Re-Balancing

• While advisors are often viewed as counseling investors to “stay the course” and avoid taking rash actions during difficult markets, investors having advisor contact since COVID-19 were much less likely to say they would do nothing with their portfolio as a result.

• Investors with recent advisor contact were twice as likely (32% vs. 16%) to say they had or planned to re-balance in response to COVID-19.

Advisor contact and actions planned or taken due to COVID-19


Digital Engagement

6

3%

12%

63%

2%

20%

2%

6%

42%

1%

49%

I use it a lot more often

I use it a little more often

No change

I use it less often

I don't use it

Mobile Website

Investor Digital Engagement Increases Modestly

COVID-19 impact on firm/advisor website and mobile app usage

• 15% of investors say they have used their firm or advisor’s website more often since COVID-19, vs. just 8% saying they use the firm’s mobile app more.

• Nearly half of investors (49%) still don’t use their firms mobile app at all, highlighting the critical importance of improving the mobile experience and driving greater engagement with this channel.

COVID-19 has driven higher web

engagement among investors but

less so for mobile apps


Investor Confidence

7

22%

44%

22%

9%

3%

Strongly agreeAgreeNeither agree nor disagreeDisagreeStrongly disagree

Most Investors Remain Confident They Are On Track

Investor confidence in being on track to achieve long-term goals

• Two-thirds (66%) of investors either Agree or Strongly Agree they are on track to achieve long-term goals.

• Just 12% Disagree or Strongly Disagree.


Perceptions of COVID-19 Responses

8

8%10%

79%

3%0%

Very positivechange

Somewhatpositive change

No change Somewhatnegative change

Very negativechange

Few Investors Highly Impressed by Firm COVID-19 Response

Impact of firm/advisor’s response to COVID-19 on investor perceptions

• Nearly four in five (79%) investors had no change in the perceptions of their firm or advisor based on their response to COVID-19.

• Most of the remainder (18%) had a positive change, with just 3% having a negative change.


Impact on Loyalty

9

1%5%

76%

5%

13%

Much more likelyto considerswitching

Somewhat morelikely to consider

switching

No change Somewhat lesslikely to consider

switching

Much less likelyto considerswitching

Impact of COVID-19 on intention to switch firms

• More than three-quarters of investors (76%) indicate COVID-19 has had no impact on their intention to switch firms.

• Nearly one in five (18%) are either “somewhat” or “much” less likely to switch now.

Investors Somewhat Less Likely To Leave Firm Now

Appendix

10


11

25%

41%

17%

17%

Less than $100,000 $100,000-$499,999 $500,000-$999,999 $1,000,000+

Investable Assets of Respondents

Affluence Distribution of Survey Respondents


12

Age of Respondents

Age Distribution of Survey Respondents

0%

4%

24%

24%

47%

< 18 18-29 30-44 45-60 > 60


13

Gender of Respondents

Gender Distribution of Survey Respondents

57%

43%

Male Female


14

Region of Respondents

Regional Distribution of Survey Respondents

5%

18%

18%

6%19%

4%

5%

8%

16%

New England Middle Atlantic East North CentralWest North Central South Atlantic East South CentralWest South Central Mountain Pacific


15

Q1: Which of the following ranges best describes your total household's investable assets (please exclude 401k, real

estate, and employer stock plans)

Q2: Which of the following best describes what you have done or are planning to do with respect to your investment

portfolio as a result of COVID-19 and/or recent market volatility?

Q3: How frequently have you communicated with your financial advisor since COVID-19 emerged?

Q4: If you have a financial advisor, which of the following ways have you communicated with your advisor since COVID-

19 emerged?

Q5: How do you feel about the following statement: I am confident that I am on track to achieve my long-term financial

goals

Q6: How has your use of your primary investment firm or advisor’s website changed due to recent events?

Q7: How has your use of your primary investment firm’s mobile app changed due to recent events?

Q8: How has your primary investment firm’s or advisor’s response to the COVID-19 situation impacted your impression

of them?

Q9: How likely are you to consider switching primary investment firms now vs. prior to COVID-19?

Q10: How would you like to communicate with your primary investment firm and/or advisor going forward ?

Q11: Age

Q12: Gender

Q13: Household Income

Q14: Region

Q15: Device Type

Survey Questions

© 2020 J.D. Power. All Rights Reserved.

Michael Foy Senior Director

Wealth Management Intelligence [email protected]

646.703.3868

mailto:[email protected]

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J.D. Power Wealth and Lending Intelligence Managemen… · Mobile Website Investor Digital Engagement Increases Modestly COVID-19 impact on firm/advisor website and mobile app usage