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Advisors Desperately Need More Product Expertise, Guidance, From Solutions Providers

More than 1,000 independent financial advisors took part in the Curian survey.

As advisors expand their array of investing options, solutions providers must offer better product expertise, according to the Curian Capital Advisor Survey of more than 1,000 independent financial advisors.

Advisors are increasingly gravitating towards alternative strategies, and are pining for more help from vendors to assist them in navigating the resources available to them, Mark Schoenbeck, VP of Marketing for Curian, a registered investment advisor in Denver, Colo., said.

Currently, only 3% of advisors have more than 25% of their assets under management allocated to alternative investments. But 60% said they expect to increase their use of alternative asset classes this year, and two-thirds expect to increase their use of variable annuities.

Among the 1,009 advisors who participated in the survey, 69% indicated that they turn to financial services companies for expertise on investment strategies.

Despite a plethora of available social media platforms for financial professionals, virtual chat rooms, networks and message boards barely registered a mark on the advisor community, with only 5% saying they relied on their social networks to learn about investment strategies.

Still, when asked about the importance of a provider’s online capabilities, they cited items such as website functionality and ease of use as very likely to impact their use of a product. “Advisors are trying to consolidate when and how they do business,” Schoenbeck said. The quality of solutions and particularly of product expertise becomes especially important since advisors “are not doing business with lots of different firms, but rather with two or three specific firms,” he added.

Meanwhile, advisors reported that government spending and market volatility are the biggest threats to their client’s retirement accounts, with only 4% concerned most about the housing market.

In 2010, the biggest perceived threat to their clients’ retirement plans was not generating enough income.

Melanie Rodier has worked as a print and broadcast journalist for over 10 years, covering business and finance, general news, and film trade news. Prior to joining Wall Street & Technology in April 2007, Melanie lived in Paris, where she worked for the International Herald ... View Full Bio

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