According to a global research carried out by Natixis Global Asset Management (NGAM), financial advisory in Italy is a sector in good health compared to the average recorded in other countries and shows signs of rapid growth. The survey, which involved approximately 1.300 financial advisors from nine different countries, of which 150 in Italy, provides a snapshot of the state of financial advisory in our country and the approach of
promoters and independent consultants towards the profession and customer management.
Growth of financial advice in Italy
Despite the persistence of the financial crisis, the financial consultancy sector in Italy shows clear signs of development and growth compared to foreign realities as well. In fact, 75% of the promoters interviewed recorded business growth over the last few years compared to an international average of 60%. Of these, as many as 23% said they had a very considerable development, against a global average of 13%.
“These data confirm to us how the financial advisory sector is assuming ever greater importance in our country” – says Antonio Bottillo, Managing Director for Italy of Natixis Global Asset Management. "The role of the financial advisor and the independent consultant appears to be central not only in the relationship with the customer, but also for the correct construction of the portfolio".
Customer relationship
The activities of Italian financial advisors are developed in three areas: the construction of portfolios that are able to satisfy the client's risk/return profile; understanding the investor's appetite for risk; the analysis of the general macro-economic situation and market trends. For 63% of those interviewed, these three components represent the heart of their business.
Furthermore, the relationship with the customer appears to be central for Italian financial advisors: on average they dedicate over 52 hours a month to meetings with existing customers or to looking for new ones, against a global average of 49 hours. It is interesting to note how the advisors
Italians carefully follow the world of media, including social media, with about 15 hours a month.
The daily work of Italian consultants is divided (on average) into:
• Meeting with existing customers: 38 hours per month compared to about 34 overall;
• Search for new customers: 14 hours a month
• Analysis, monitoring and use of media and social media: 15 hours per month compared to an average of 11 hours
• Administrative activity: 13 hours per month
The challenges of financial advice
The enduring volatility that characterizes the markets and the consequent need to build portfolios capable of dealing with different market scenarios increasingly appear to be the central challenges for Italian financial advisors. For as many as 58% of respondents, building stronger portfolios appears to be their biggest challenge. Linked to this, arises the need to face and know how to manage the volatility of the markets by supporting the customer with adequate consultancy. Indeed, Italian investors, today more than in the past, show an interest in tackling the issue of risk (45% compared to an average of 35% in other countries).
To cope with this different scenario, over half of Italian advisors (53%) believe that the traditional 60/40 approach between stocks and bonds is no longer the best way to achieve investor objectives and to address portfolio risk . As many as 65% of respondents believe that it is useful to look at new portfolio construction methodologies and techniques to meet the needs of investors, compared to a general average of 58%.
“In the current context, a correct perception of investment risk is the basis for adequate portfolio construction that makes diversification the key to dealing with different market cycles” – underlines Bottillo. “A diversification that, in our
In my opinion, it is not only limited to considering different geographical areas and sectors, but that it knows how to include in the portfolio different investment strategies and methodologies that are less correlated with market trends”.
