NAIFA Survey: NAIFA Members Serve Main Street Americans

The National Association of Insurance and Financial Advisors (NAIFA) surveyed its members to determine who their clients are and how those clients are served. Of particular interest was how NAIFA members serve middle-market households as well as those with lower or moderate incomes. The survey of 694 NAIFA members was conducted between Dec. 19, 2018, and Jan. 8, 2019. To learn more about how NAIFA members serve Main Street Americans, visit www.AdvisorsYouCanTrust.org.

Press Release (.pdf)

Survey Results (.pdf)

Survey Results

Q1 How long have you been a financial advisor or agent?

N=694
0-5 years 32 4.61%
6-10 years 51 7.35%
11-20 years 142 20.46%
21+ years 469 67.58%
 

Q2 What markets do you currently serve? Select all that apply.

N=694
Affluent individuals and families 382 55.04%
Middle-income individuals and families 624 89.91%
Lower-income individuals and families 291 41.93%
Small businesses 538 77.52%
Mid-sized businesses 230 33.14%
Large businesses 51 7.35%
Senior Market 472 68.01%
Baby Boomers 448 64.55%
Millennials 300 43.23%
Other 48 6.92%
 

Q3 Which job titles do you use in your marketing or professional identification materials (website, business cards, social media accounts, advertisements, etc.)? Select all that apply.

N=694
Financial Advisor or Adviser 228 32.85%
Financial Consultant 51 7.35%
Financial Planner 70 10.09%
Financial Services Representative 156 22.48%
Registered Representative 233 33.57%
Wealth Manager 27 3.89%
Financial Manager 7 1.01%
Investment Advisor Representative 88 12.68%
Insurance Agent 424 61.10%
Broker 112 16.14%
Vice President or President 77 11.10%
Financial Coach 12 1.73%
Wealth Planner 10 1.44%
Benefits Manager 11 1.59%
Other 87 12.54%
 

Q4 What products and services have you recommended during the past 12 months? Select all that apply.

N=694
Whole life 558 80.40%
Term Life 658 94.81%
Universal Life 490 70.61%
Group Life 178 25.65%
Indexed Universal Life 212 30.55%
Supplemental Life 59 8.50%
Health Insurance 251 36.17%
Group Health 172 24.78%
Individual Health 218 31.41%
Medicare Supplements 312 44.96%
Long-term Care 484 69.74%
Disability Income Insurance 473 68.16%
Critical Illness Insurance 97 13.98%
Health Savings Accounts 164 23.63%
Dental 194 27.95%
Vision 165 23.78%
International Medical 44 6.34%
Retirement 383 55.19%
Fixed Annuities 438 63.11%
401(k) or 403(b) 250 36.02%
IRA (Roth or Traditional) 434 62.54%
Investment/Other 264 38.04%
Bonds 92 13.26%
Stocks 92 13.26%
Mutual Funds 372 53.60%
Group Benefits 81 11.67%
529 Plan 226 32.56%
P/C Products 127 18.30%
Voluntary and Work-site Benefits 110 15.85%
 

Q5 Which of the following best describes your registration to sell securities?

N=694
I am a registered investment adviser 88 12.68%
I am a broker-dealer or a registered representative of a broker-dealer 247 35.59%
I am dual registered as a registered investment adviser and a registered representative 110 15.85%
I am not registered to sell securities 249 35.88%
 

Q6 What is the typical annual household income of family or individual clients you serve? (I.e., in which income range do most of your clients fall?)

N=665
Less than $50,000 26 3.91%
$50,000 - $100,000 299 45.00%
$100,000 - $150,000 225 33.80%
More than $150,000 115 17.29%
 

Q7 What is your typical family or individual client’s level of liquid financial assets (includes cash, stocks, bonds, and mutual funds; does not include real estate, vehicles, and other fixed assets)?

N=663
Less than $50,000 116 17.50%
$50,000 - $100,000 170 25.64%
$100,000 - $250,000 161 24.28%
$250,000 - $500,000 119 17.95%
$500,000 - $2 million 83 12.52%
More than $2 million 14 2.11%
 

Q8 What percentage of your family or individual clients have annual household incomes of $100,000 or less?

N=661
0 – 25% 242 36.61%
26 - 50% 206 31.16%
51 – 75% 148 22.39%
76 – 99% 59 8.93%
100% 6 0.91%
 
Q9 Why did you choose to serve clients with household incomes of $100,000 or less?
N=665
To make a positive difference in people’s lives 410 61.65%
To help ordinary Americans work toward achieving the American Dream 305 45.86%
To help as many Americans as I can 240 36.09%
To help members of my community 292 43.91%
Other (please specify) 111 16.69%
 

Q10 What strategies do you use to successfully serve this market?

N=666
I serve as a resource of financial education and information to them. 549 82.43%
I teach them savings strategies. 322 48.35%
I try to be available to them 24/7—by social media, telephone and the U.S. mail 191 28.68%
Other (please specify) 83 12.46%
 

Q11 Are there any barriers that discourage you as an advisor from serving more clients with lower or moderate household incomes? Select all that apply.

N=664
No barriers 268 40.36%
Lack of suitable products for lower and moderate income clients 82 12.35%
Lower and moderate income clients are not seeking advice 164 24.70%
Lower and moderate income clients are not profitable for my practice 156 23.49%
Government regulations and restrictions make it difficult to serve lower and moderate income clients 180 27.11%
Other (please specify) 63 9.49%
 

Q12 Which of the following services do you provide for clients? (Choose all that apply)

N=653
Retirement planning 541 82.85%
College savings/planning 395 60.49%
Financial risk management 432 66.16%
Financial literacy education 329 50.38%
Health care planning 278 42.57%
Wealth management 329 50.38%
Inheritance or succession planning 417 63.86%
Other (please specify) 78 11.94%
 

Q13 Which of the following is the service you provide that you feel is most important to the majority of your clients? (Choose only one)

N=653
Retirement planning 298 45.64%
College savings/planning 0 0.00%
Financial risk management 144 22.05%
Financial literacy education 61 9.34%
Health care planning 56 8.58%
Wealth management 21 3.22%
Inheritance or succession planning 23 3.52%
Other (please specify) 50 7.66%
 

Q14 What forms of compensation do you receive? Select all that apply.

N=647
Sales commissions 634 97.99%
Salary 62 9.58%
Assets Under Management Fees 256 39.57%
Hourly or other non-commission, non-AUM fees 48 7.42%
Cash bonuses 71 10.97%
Non-cash bonuses 23 3.55%
Other (please specify) 41 6.34%
 

Q15 What is your primary form of compensation? Select only one.

N=648
Sales commissions 541 83.49%
Salary 27 4.17%
Hourly or other non-commission fees 5 0.77%
Assets Under Management Fees 75 11.57%
Sales commissions 541 83.49%
 

Q16 Media sources and industry research report a trend in the financial services industry of advisors moving from commission-based compensation models to fee-based models. Over the past five years, has your practice seen such a shift, receiving less commission-based compensation and more fee-based compensation?

N=650
Yes 192 29.54%
No 443 68.15%
Have not been in business five years 15 2.31%
 

Q17 Do you currently serve a greater proportion of affluent clients than you did before the shift from commission-based to fee-based compensation? (Asked of respondents who answered “Yes” to Q16.)

N=192
Yes 83 43.23%
No 109 56.77%