According to research from WisdomTree Investments and shared in an article by Nick Peters-Golden on VettaFi’s Modern Alpha Channel, the volatile markets and uncertainty about the economy in 2020 yielded some insights and lessons that can be applied today.

2020 was particularly challenging for advisors given the outbreak of the coronavirus and aggressive policies to deal with it, including massive amounts of fiscal and monetary stimulus. There were other practical challenges, such as maintaining communication with clients virtually. 

The research results in some surprising takeaways. For one, investors didn’t seem more panicked despite the steep drop in stock prices amid the initial lockdowns. Additionally, surveys showed that investors were satisfied with their advisors’ performance over this period. 

WisdomTree attributes this satisfaction due to constant communication with clients and reassurance about their long-term plans. Most advisors increased communication with clients and were able to increase confidence by using model portfolios. 

As a result, the number of investors who said advisors using third-party model portfolios was ‘absolutely acceptable’ rose to 86% from 90%. Additionally, advisors got high marks from clients about their accessibility and responsiveness than prior to the crisis. 

Finsum: Research from WisdomTree Investments shows that clients were satisfied with advisors’ performance in 2020 despite a challenging environment.