“It has been just over one month since COVID-19 was declared a global pandemic, and it is taking a toll on every aspect of our lives,” said John Carter, President and COO, Nationwide Financial. “People are struggling, they are making sacrifices, and we firmly believe that their health and safety should be everyone’s top priority right now. We are also committed to helping Americans protect their financial health for the long term. Our latest research identifies areas where they are challenged and looking for guidance.”

Roughly one quarter of respondents (24%) and the subset of investors (26%) are seeking help by engaging a financial advisor for the first time ever as a result of the pandemic. These are among the findings revealed by a new study from the Nationwide Retirement Institute of more than 2,000 American adults age 18+, including over 600 U.S. investors with investable assets of $100,000 or more, conducted online by The Harris Poll. The poll was conducted in April 2020.

“Right now, Americans feel a lack of control and a need for more guidance,” said Kristi Rodriguez, leader of the Nationwide Retirement Institute. “Even if they do all the right things to manage their finances and investments, the vast majority of Americans, including 80% of all respondents and 85% of investors, agree they can still be blindsided by outside events. According to 49% of respondents and 52% of investors, the COVID-19 pandemic made them realize that they need help managing their finances and investments to succeed in the future.”

Loss of Control and Need for Guidance

When asked how they feel about the impact of COVID-19 on their current personal finances, all respondents and investors are most likely to say they are cautious (38% and 41%, respectively) or uncertain (32% and 28%). If there is any silver lining, it is that roughly two in ten say they feel optimistic (18% respondents and 22% investors) and only a few say they feel hopeless (7% and 5%, respectively).

Advisors top the list of trusted sources for general financial and money management advice during the pandemic. All respondents say their top choices include a financial advisor (37%), friends & family (29%), online investment management/financial planning tools (20%) and their employer sponsored retirement plan (20%). Investors say their top choices include a financial advisor (55%), with friends and family a distant second (26%), followed by online investment management/financial planning tools (25%) and their employer sponsored retirement plan (24%).

Less than one-third of respondents (31%) already had an advisor, compared to more than half of investors (58%). More than one-third of respondents (35%) and nearly half of investors (49%) are now relying on a financial advisor more than ever due to the impact of the COVID-19 pandemic. But nearly two in ten respondents (19%) and 14% of investors say they don’t trust anyone for financial advice during the pandemic.

Top Financial Concerns and Meeting Immediate Needs

While roughly one-quarter of respondents (24%) and one-third of investors (31%) do not expect the pandemic to impact their ability to meet their financial obligations, the majority of Americans are now feeling pressure.

Among all respondents, the top three financial concerns related to the COVID-19 pandemic are being unable to pay bills or meet their financial obligations (45%), losing their life's savings (33%) and losing their employment (30%). Among investors, the top three financial concerns related to the pandemic include losing their life’s savings (41%), being unable to pay bills or meet financial obligations (34%), while they are equally worried about being unable to afford healthcare and being unable to retire as planned (both 28%).

When it comes to meeting their financial obligations if impacted by COVID-19, roughly one-third of Americans, including 32% of all respondents and 36% of investors, will tap their savings. Respondents overall are somewhat more likely than the subset of investors to need other sources such as delaying paying bills (24% vs 19%, respectively), relying on one-time payment from the stimulus package (22% vs 15%), relying on help from family and friends (19% vs 15%), and relying on unemployment insurance (13% vs 10%). Both are almost equally likely to increase credit card debt (18% vs 17%).

Solutions for Protecting Financial Futures and Loved Ones 

Heightened uncertainty and complexity are driving a need for greater financial protection. Roughly half of respondents and investors agree that the COVID-19 pandemic has made them recognize the need for annuities to protect their investments against market risk (47% and 51%, respectively) and to protect their retirement income (48% and 51%). More than half of respondents and investors also say the pandemic has made them recognize the need for life insurance (57% and 55%).

Americans are also worried about protecting their families and loved ones. Roughly four in ten of all respondents and investors are concerned the COVID-19 pandemic will impact their ability to fulfill potential caregiving responsibilities for others due to financial strain (44% and 41%) or due to their own illness caused by COVID-19 (42% and 40%). The majority of respondents and investors (56% and 57%) also say that the pandemic has made them recognize the need for long-term care insurance for themselves and the people they care about.

Staying the Course for the Long Term 

While the pandemic impacts immediate financial needs and the ability to care for family and loved ones, 42% of Americans say they are staying the course with their long-term investments.

When managing their qualified retirement savings plans, such as their 401(k), 403(b), 457 and IRA, in response to COVID-19, nearly half of all respondents and investors say they will make no change and stay the course (42% vs 50%, respectively). If making changes to their qualified plans, respondents and investors are somewhat more likely to move to a more conservative allocation (14% and 19%, respectively), and somewhat less likely to move to a more aggressive allocation (10% and 15%). However, respondents overall are less likely than the subset of investors to increase contributions (10% vs 16%) but also somewhat less likely to decrease contributions (10% vs 14%).

When managing their other investments, such as stocks, bonds, mutual funds and ETFs, in response to the COVID-19 pandemic, many respondents and investors also say they will make no change and stay the course (35% and 42%). If making changes to their other investments, respondents are most likely to move their portfolio to a more conservative allocation (14%) or invest more in the stock market (13%), while only 10% would take money out of the stock market and only 9% would move their portfolio to a more aggressive allocation. Investors making changes to their other investments are most likely to invest more in the stock market (22%) or move their portfolio to a more conservative allocation (19%), while 15% would take money out of the stock market and 14% would move their portfolio to a more aggressive allocation.

While respondents overall are somewhat less likely than the subset of investors to meet financial obligations, if impacted by COVID-19, by selling shares in qualified retirement plans (10% vs 16%), this may in part reflect the fact that nearly two in ten respondents (18%) don’t have a qualified retirement savings plan, whereas only 4% of investors do not. Likewise, while respondents overall are less likely than the subset of investors to meet their financial obligations by selling shares in non-qualified investments (8% vs 16%), this may also reflect the fact that nearly one quarter of respondents (24%) don’t have these other investments, whereas just 6% of investors do not.

Nationwide offers this resource to help consumers find a financial advisor that’s right for them.

Methodology

This survey was conducted online within the United States between April 8-10, 2020 among 2,042 adults (aged 18 and over) by The Harris Poll on behalf of Nationwide via its Harris On Demand omnibus product. This sample included 603 investors defined as those adults with investable assets of $100K+. Figures for age, sex, race/ethnicity, education, region and household income were weighted where necessary to bring them into line with their actual proportions in the population. Propensity score weighting was used to adjust for respondents’ propensity to be online.

Respondents for this survey were selected from among those who have agreed to participate in our surveys. Because the sample is based on those who agreed to participate in the online panel, no estimates of theoretical sampling error can be calculated.

About The Harris Poll

The Harris Poll is one of the longest running surveys in the U.S. tracking public opinion, motivations and social sentiment since 1963 that is now part of Harris Insights & Analytics, a global consulting and market research firm that delivers social intelligence for transformational times. We work with clients in three primary areas; building twenty-first-century corporate reputation, crafting brand strategy and performance tracking, and earning organic media through public relations research. Our mission is to provide insights and advisory to help leaders make the best decisions possible. To learn more, please visit www.theharrispoll.com.

“The trends are well known. As Boomers shift into retirement at a rate of 10,000 per day, both Millennials and Gen Xers are poised to grow more wealth and ultimately inherit their share of the $30 trillion Great Wealth Transfer,” said Craig Hawley, Head of Nationwide’s Annuity Distribution. “The opportunity is huge, and our latest Advisor Authority Special Report uncovers the key factors RIAs and fee-based advisors need to know to unlock greater growth by attracting and retaining the emerging market of Millennial and Gen X investors.”

More than one-third of Millennials (39%) and more than half of Gen Xers (52%) still don’t have an advisor—and could benefit from long-term holistic planning—according to this latest Advisor Authority Special Report, “Millennials and Generation X: Targeting the Emerging Market of New Investors.” So, what do advisors need to know?

Different Factors for Attracting Millennials and Gen Xers

From choosing an advisor to making life choices, these two generations often take a different approach and often have a different point of view. The majority of Millennials say they are the primary decision maker in their household when it comes long-term financial planning (85%) compared to just over half of Gen Xers (55%). Likewise, 45% of Millennial investors have never married, compared to just 17% of Gen X Investors. Studies show that many Millennials are going solo—delaying the decision to marry, have children, buy a home and more—and an important reason why is their overwhelming student loan debt.

When it comes to choosing an advisor, year over year both Millennials and Gen Xers say that experience matters most (31% and 47%) and both include personalized advice for a holistic financial picture (28% and 25%) among their top three factors. But the factors influencing their decision to work with a financial advisor also reflect strong differences in values and priorities.

While more Millennials than Gen Xers cite socially responsible investing (20% vs 8%) and increased use of mobile technology (19% vs 4%), fewer cite a fee-based fiduciary standard (18% vs 27%) among the top three factors that influence their decision to work with an advisor. When targeting Millennial investors, this may reflect an important knowledge gap—presenting an important opportunity to educate them on the benefits of working with an advisor who puts the client’s best interest first.

Greater Optimism Does Not Mean Fewer Concerns

Despite their outsize debt and other financial challenges, more Millennials than Gen Xers had an optimistic financial outlook for 2019 overall (64% vs 49%). The fifth annual study also shows that more Millennials than Gen Xers had an optimistic outlook on the U.S. economy for the next 12 months (47% vs 31%). Yet, both Millennials and Gen Xers were equally concerned about a U.S. economic recession over the next 12 months (61% each).

Likewise, more Millennials than Gen Xers also had an optimistic outlook on the U.S. stock market for the next 12 months (53% vs 36%). Yet Millennials were more concerned than Gen Xers about a bear market in the next 12 months (61% vs 57%). Roughly two-thirds of Millennials and Gen Xers agreed that market volatility would increase over the next 12 months (67% and 62%).

Concerns about a declining economy, falling markets and market volatility can raise concerns about protecting assets and increase the need for guided advice. When asked the number-one benefit of working with an advisor when markets are volatile, Millennials and Gen Xers with a financial advisor report different views. Among those with a financial advisor, more Millennials than Gen Xers say the most important benefit is protecting their assets against market risk (23% vs 20%) tied with helping them stay focused on long term goals (23% vs 15%). Meanwhile, roughly one-third of Gen Xers (32%) say the most important benefit of working with an advisor when markets are volatile is to help them make more informed decisions, while only 15% of Millennials say the same.

Protect Against Top Concerns to Drive Client Satisfaction

Millennials and Gen Xers share similarities in their top financial concerns for the next 12 months, but the younger generation identified a wider range of issues among their top three. Millennials again say that taxes (31%) are their number one financial concern. Despite their younger age, longer time horizon and reputation as “young invincibles,” Millennials say saving enough for retirement (25%) and cost of healthcare (25%) are tied for second.

Protecting assets (19%) moved up to Millennials’ number-three concern from number-seven the previous year. Perhaps due to their growing concerns about rising volatility and a looming bear market, this younger generation seems to be taking protection seriously. Given their outsize debt, it is no surprise that Millennials say financing a home (19%) is one of their top three concerns and financing another large expense (19%) also tied among their top three.

Meanwhile, Gen Xers again say that saving enough for retirement (36%) is their number-one concern. Taxes (32%) are their number-two financial concern, moving up from number-three the prior year. The cost of healthcare (30%) moved to Gen Xers’ number-three financial concern, from number-two the prior year.

Protecting Retirement—and Addressing the Preparation Gap

Despite their young age and longer time horizon, Millennials are already thinking about retirement—perhaps more than some Gen Xers. Many Millennials came of age, graduated college and struggled to enter the workforce during the Market Crash of 2008 and the Great Recession, and watched their parents’ retirement accounts decline as the safety net disappeared. Meanwhile, Gen Xers entered the workforce during the boom years between the mid-80s and the late-90s, when the workforce, market and economy were thriving.

These differences may account for the fact that 65% of Millennials already say that concerns about the need for guaranteed retirement income to supplement Social Security keeps them up at night, compared to only 45% of Gen Xers. Likewise, nearly three-quarters of Millennials (73%) say they have a strategy to protect against outliving their savings, as compared to roughly half of Gen Xers (54%). With the oldest Gen Xers roughly a decade away from traditional retirement age, advisors can help address this preparation gap.

Among those who have a strategy to protect against outliving their savings, more Millennials than Gen Xers say their plan includes sophisticated solutions like Variable Annuities with Living Benefits (36% vs 27%), Deferred Income Annuities (DIAs, 30% vs 8%), Single Premium Immediate Annuities (SPIAs, 20% vs 11%), Qualified Longevity Annuity Contracts (QLACs, 27% vs 9%), and Contingent Deferred Annuities (CDAs, 20% vs 9%).

To learn more about younger investors, and how they compare to their older counterparts, financial professionals can download the Advisor Authority Special Report, “Millennials and Generation X: Targeting the Emerging Market of New Investors.”

https://know.nationwideadvisory.com/AdvisorAuthority2019Ch3Report

For additional insights on the Emerging Market of Millennial and Generation X investors, financial professionals can also download the latest Advisor Authority infographic at:

https://know.nationwideadvisory.com/AdvisorAuthority2019Ch3Infographic

The fifth annual Advisor Authority study explores the investing and advising issues confronting RIAs, fee-based advisors and investors—and the innovative techniques that they need to succeed in today’s complex market. This is the eighth release and final Special Report from the fifth annual study.

About Advisor Authority: Methodology

The fifth annual Advisor Authority Survey was conducted online within the United States by The Harris Poll on behalf of Nationwide Advisory Solutions from February 15 – March 4, 2019 among 1,021 financial advisors and 824 investors, ages 18+. Among the 824 investors, there were 165 Millennials, 213 Gen Xers, 379 Baby Boomer and 67 Matures. Advisors are weighted where necessary by employment status and active management to bring them in line with previous years’ profile. Investors are weighted where necessary by age by gender, race/ethnicity, region, education, income, marital status, household size, investable assets and propensity to be online to bring them in line with their actual proportions in the population. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated.

About The Harris Poll

The Harris Poll is one of the longest running surveys in the U.S. tracking public opinion, motivations and social sentiment since 1963 that is now part of Harris Insights & Analytics, a global consulting and market research firm that delivers social intelligence for transformational times. We work with clients in three primary areas; building twenty-first-century corporate reputation, crafting brand strategy and performance tracking, and earning organic media through public relations research. Our mission is to provide insights and advisory to help leaders make the best decisions possible. To learn more, please visit www.theharrispoll.com.

About Nationwide Advisory Solutions

Nationwide Advisory Solutions is a recognized innovator with a mission to help RIAs and fee-based advisors build their practice by helping their clients to potentially accumulate more wealth and reach their financial goals. Nationwide Advisory Solutions does this by developing and delivering value-added investment products, services and technologies that dovetail with fiduciary obligations—wrapped in an industry-leading customer experience. To learn more, please visit www.nationwideadvisory.com

Nationwide, Nationwide is on your side, the Nationwide N and Eagle are service marks of Nationwide Mutual Insurance Company. © 2020

“As the first digital natives, Millennials have spent their entire lives with instant online access to almost everything, giving them a distinct advantage when it comes to leveraging new technology to stay a step ahead. And this becomes clear in our latest Advisor Authority findings, showing that Millennial advisors are three times more likely than Boomer advisors to say technology is among their top three factors for enhancing profitability,” said Craig Hawley, Head of Nationwide’s Annuity Distribution. “But they can learn from each other. Just as Boomers can take a page from Millennials’ playbook, by adopting AI, robo and other technology, Millennials can follow the lead of more experienced advisors, by not losing sight of the human connection, building strong one-on-one relationships and working with their clients’ family and children to build a more profitable practice.”

When asked which solution they are most interested in integrating into their practice over the next 12 months, Millennial advisors are more than twice as likely as Boomer advisors to say mobile websites and/or mobile apps (48% vs. 23%), more likely to say tools for risk management, risk monitoring and portfolio stress testing (46% v 33%), and nearly twice as likely to say interactive websites and/or client portals (40% vs. 23%). Younger advisors are also twice as likely to say Artificial Intelligence (34% vs. 17%) and almost twice as likely to say robo advisors (22% vs. 11%).

Millennial Advisors Favor Tech to Attract Next Generation of Clients

While they differ on the importance of using technology to enhance profitability, both Millennials and Boomers agree that the number-one driver of profitability is adding new clients. Millennial advisors say their top-three factors for enhancing profitability are adding new clients (36%), adding new technology (29%) and targeting high net worth clients (28%). Boomers, on the other hand, say their top-three drivers of profitability are adding new clients (55%), adding a younger generation of clients (30%) and attracting and retaining clients’ heirs (28%).

Millennial advisors are not only much more likely than Boomer advisors to have a strategy to retain client’s heirs (85% vs 64%), and nearly twice as likely to have changed their marketing strategy to attract a next generation of investors (71% vs 38%), these younger advisors are also more likely to use technology to help drive client acquisition in their pursuit of greater profitability.

To attract the next generation of investors, Millennial advisors are somewhat more likely than Boomer advisors to increase their use of mobile technology (25% vs 19%), over three times more likely to make enhancements to current websites and/or client portals (20% vs 6%), more than twice as likely to offer robust cyber security procedures (12% vs 5%) and more than twice as likely to leverage robo-advisors or other digital portfolio allocation tools (12% vs 5%). Millennials are also somewhat more likely than Boomers to increase their use of Social Media to attract the next generation (28% vs 22%).

Alternatively, to attract the next generation of investors, Boomer advisors are far more likely than Millennial advisors to work more with a client’s family and children (44% vs 20%) and focus on their years of experience (27% vs 13%), while somewhat more likely to focus on personalized advice for a holistic financial picture (25% vs 19%).

Among the factors that may lead to this digital divide on client acquisition is that Millennials and Boomers also differ on which generation of investor will be their primary target in the next 12 months. Millennial advisors are most likely to target fellow Millennial investors (51%), followed by Generation X (26%), Generation Z (10%) and Baby Boomers (9%). Baby Boomer advisors are most likely to target fellow Baby Boomer investors (47%), followed by Generation X (33%), Millennials (12%) and Generation Z (1%).

Millennial Advisors Tout Tech to Gain Client Insights and Engineer Investing Strategies

Both Millennial and Boomer advisors agree that the number-one way technology helps them to better serve clients over the next 12 months is understanding clients’ current needs and behaviors (30% and 35%). However, Millennials are somewhat more likely than Boomers to say technology helps them deliver better service by analyzing and understanding clients’ expectations (29% vs 19%), protecting client’s assets against market risk (29% vs 23%), providing more personalized holistic planning (26% vs 18%), and predicting the impact of investing decisions (24% vs 17%).

Notably, Millennials are more than twice as likely as Boomers to use technology to engineer investing strategies for better returns (21% vs 9%). Alternatively, Boomers are far more likely than Millennials to say the top way technology helps them provide better service is to free up time to focus on one-on-one relationships with clients (38% vs 26%).

When asked which tech enabled solutions will help them to better support clients’ needs over the next 12 months, two generational differences are most prominent. Millennial advisors are over four times more likely than Boomer advisors to use artificial intelligence and/or data analytics to understand client behavior (18% vs. 4%). And while 12% of Millennials say they use robo advisors to provide better service, only 1% of Boomers do the same.

Millennial and Boomer advisors have more similarities around other types of technology to better support clients’ needs. They agree the number-one solution is financial planning software (23% and 27%), are equally likely to use budgeting and cash management tools (both 17%) and closely aligned around tools for risk management, risk monitoring and portfolio stress testing (20% vs. 21%) and tax optimization tools (19% vs. 18%). Millennials are somewhat more likely than Boomers to support clients’ needs with mobile websites and/or mobile apps (20% vs 14%), cyber security (20% vs 12%) and real-time data alerts (19% vs 14%). Millennials are somewhat less likely than Boomers to use, retirement accumulation tools (16% vs 20%) and retirement income distribution planning tools (15% vs 21%). (Q1205)

The fifth annual Advisor Authority study explores the investing and advising issues confronting RIAs, fee-based advisors and investors—and the innovative techniques that they need to succeed in today’s complex market. These latest findings will be followed by a final special report, to be released in the first quarter of 2020.

About Advisor Authority: Methodology

The fifth annual Advisor Authority Survey was conducted online within the United States by The Harris Poll on behalf of Nationwide Advisory Solutions from February 15 – March 4, 2019 among 1,021 financial advisors and 824 investors, ages 18+. Among the 1,021 financial advisors, there were 507 Registered Investment Advisors and 514 Broker/Dealers, including 622 Millennials, 299 Generation X and 94 Baby Boomers. Advisors are weighted where necessary by employment status and active management to bring them in line with previous years’ profile. Investors are weighted where necessary by age by gender, race/ethnicity, region, education, income, marital status, household size, investable assets and propensity to be online to bring them in line with their actual proportions in the population.

About The Harris Poll

The Harris Poll is one of the longest running surveys in the U.S. tracking public opinion, motivations and social sentiment since 1963 that is now part of Harris Insights & Analytics, a global consulting and market research firm that delivers social intelligence for transformational times. We work with clients in three primary areas; building twenty-first-century corporate reputation, crafting brand strategy and performance tracking, and earning organic media through public relations research. Our mission is to provide insights and advisory to help leaders make the best decisions possible. To learn more, please visit www.theharrispoll.com.

About Nationwide Advisory Solutions

Nationwide Advisory Solutions is a recognized innovator with a mission to help RIAs and fee-based advisors build their practice by helping their clients to potentially accumulate more wealth and reach their financial goals. Nationwide Advisory Solutions does this by developing and delivering value-added investment products, services and technologies that dovetail with fiduciary obligations—wrapped in an industry-leading customer experience. To learn more, please visit www.nationwideadvisory.com.

Helping more affluent investors address top concerns and manage the dynamics of today’s complex markets are key for gaining their trust and earning their business. Among the HNW, with investable financial assets ranging from $1 million to less than $5 million, and the Ultra HNW, with investable financial assets of $5 million or more, roughly one-fourth still do not have a financial advisor (27% and 22%). The opportunity is substantial. Advisor Authority reveals actionable insights and proactive strategies to help RIAs and fee-based advisors compete more effectively for this valuable client segment, by profiling the unique needs of the HNW—and how their needs change as they ascend to the ranks of the Ultra HNW.

“While managing taxes and protecting assets remain among their top financial concerns, High Net Worth and Ultra High Net Worth investors need help to identify potential blind spots and bridge the preparation gap, especially in times of uncertainty. More affluent investors say the top benefit of working with an advisor when markets are volatile is staying focused on long-term goals,” said Craig Hawley, Head of Nationwide’s Annuity Distribution. “RIAs and fee-based advisors say targeting the High Net Worth and Ultra High Net Worth is among the top three factors that will enhance the profitability of their practice, and our latest Advisor Authority study uncovers the key factors they need to attract and retain these more affluent clients.”

Identify Blind Spots and Bridge Preparation Gap

With volatility top of mind, having more wealth does not always translate into a substantially more optimistic financial outlook. While the optimism of Mass Affluent investors fell eight percentage points, to 52% in 2019 from 60% in 2018, optimism of HNW investors fell ten percentage points, to 55% in 2019 from 65% in 2018, as concerns about markets, economics and politics at home and abroad, continued dominating the headlines. Optimism of Ultra HNW investors increased six percentage points, to 64% in 2019 from 58% in 2018, potentially fueled by the prospects of a finance-friendly tax plan, cuts to regulations and a business-friendly majority in the Senate.

The HNW are less optimistic than the Ultra HNW, yet they are less aware of the potential risks in the market and the economy, and they are less prepared. The HNW are less likely than the Ultra HNW to say their outlook for the U.S. Stock Market over the next twelve months is optimistic (47% vs. 58%) and less likely to say their outlook for the U.S. economy over the next twelve months is optimistic (51% vs. 58%). And yet, HNW investors are less likely than Ultra HNW investors to be concerned about a U.S. bear market over the next 12 months (54% vs. 63%.) and less likely to be concerned about a U.S. economic recession over the next 12 months (56% vs. 66%).

Protecting Assets: Top Priority to Attract the More Affluent

More wealth means affluent investors have more to lose as markets fall and the economy slows. Protecting assets is a top financial concern for investors at every level—especially for the more affluent. While the number-one financial concern of the HNW and Ultra HNW this year is taxes (38% vs. 34%), protecting assets is a close second (37% vs. 33%), and the cost of healthcare is a more distant third (30% vs. 19%). Protecting assets was HNW investors’ number-one financial concern by a wide margin in prior years (45% in 2018, 41% in 2017, 41% in 2016). Likewise, protecting assets has been Ultra HNW investors’ number-one or number-two financial concern in prior years (28% in 2018, 40% in 2017, 33% in 2016).

More than one-fourth of HNW investors (26%) and more than one in ten Ultra HNW investors (14%) don’t have or don’t know if they have a strategy to protect their assets, but a solid majority do have a proactive strategy to protect their assets against market risk (74% and 86%). The HNW and Ultra HNW are equally likely to rely on diversification to manage market risk (64% and 63%). However, the Ultra HNW are far more likely than the HNW to employ a more diverse range of solutions. This includes fixed annuities (54% vs 22%), liquid alternatives (49% vs 27%), market linked CDs (41% vs 25%), fixed index annuities (37% vs 15%), and smart beta ETFs (31% vs 8%).

Even the More Affluent Need to Protect Lifetime Income

The retirement income challenge is real—even for the more affluent. The typical investor is nearly twice as likely to say that saving for retirement is a top financial concern compared to more affluent investors (23% All vs 13% HNW and 12% Ultra HNW). Yet typical investors and more affluent investors are equally likely to say that generating reliable income during retirement is a top financial concern (13% All Investors, 15% HNW, 12% Ultra HNW). In fact, more than one-fourth of HNW investors (28%) and one in ten Ultra HNW investors (10%) don’t know or are not sure which solutions they should use for generating retirement income during periods of market volatility.

While the vast majority of more affluent investors do have a strategy in place to protect against outliving their savings, the Ultra HNW are more likely to be prepared than the HNW (93% vs. 84%). The Ultra HNW are less likely than the HNW to rely on Social Security (66% vs. 77%) and they are far more likely to employ a diverse range of different income generating annuities. These include variable annuities with living benefit riders (42% vs 25%), Longevity Insurance/Deferred Income Annuities (or DIAs 35% vs 9%), Qualifying Longevity Annuity Contracts (or QLACs 32% vs. 8%), Single Premium Immediate Annuities (or SPIAs 30% vs 11%) and Contingent Deferred Annuities (CDAs 29% vs 7%).

The More Affluent Seek Holistic Unbiased Advice

Year-over-year, more affluent investors consistently say by a wide margin that the single most important reason for having a financial advisor is to feel more confident in their financial future, cited by roughly one-third of HNW and Ultra HNW investors (35% and 30%) in this year’s study. In recent years, more affluent investors most frequently cite advisor experience, personalized advice for a holistic financial picture and a fiduciary standard among their top three reasons for choosing to work with an advisor. This creates a clear opportunity for RIAs and fee-based advisors. In fact, this year’s study shows that nearly three-fourths of the HNW (72%) and more than 8 in ten Ultra HNW (82%) say there should be one federal fiduciary standard across the financial industry.

For additional insights on the issues HNW and Ultra HNW investors face and the innovations RIAs and fee-based advisors can use to create safe havens in an uncertain world, download the latest Advisor Authority infographic at: https://know.nationwideadvisory.com/AdvisorAuthority2019_HNW_UHNW_Investors_Infographic

The fifth annual Advisor Authority study explores the investing and advising issues confronting RIAs, fee-based advisors and investors—and the innovative techniques that they need to succeed in today’s complex market. These latest findings are to be followed by a series of ongoing reports that will be released through the first quarter of 2020.

About Advisor Authority: Methodology

The fifth annual Advisor Authority Survey was conducted online within the United States by The Harris Poll on behalf of Nationwide Advisory Solutions from February 15 – March 4, 2019 among 1,021 financial advisors and 824 investors, ages 18+. Among the 1,021 financial advisors, there were 507 Registered Investment Advisors and 514 Broker/Dealers. Among the 824 investors, there were 340 female investors and 484 male investors, and there were 205 Mass Affluent (Household Investable Assets of $100,000 to less than $500,000), 205 Emerging High Net Worth ($500,000 to less than $1 Million), 207 High Net Worth ($1 Million to less than $5 Million) and 207 Ultra High Net Worth ($5 Million or more). Advisors are weighted where necessary by employment status and active management to bring them in line with previous years’ profile. Investors are weighted where necessary by age by gender, race/ethnicity, region, education, income, marital status, household size, investable assets and propensity to be online to bring them in line with their actual proportions in the population.

About The Harris Poll

The Harris Poll is one of the longest running surveys in the U.S. tracking public opinion, motivations and social sentiment since 1963 that is now part of Harris Insights & Analytics, a global consulting and market research firm that delivers social intelligence for transformational times. We work with clients in three primary areas; building twenty-first-century corporate reputation, crafting brand strategy and performance tracking, and earning organic media through public relations research. Our mission is to provide insights and advisory to help leaders make the best decisions possible. To learn more, please visit www.theharrispoll.com.

NARIA now offers Nationwide Lifetime Income Rider^® Advisory (Nationwide L.inc^SM Advisory), a new optional living benefit with a 7% interest roll-upⁱⁱⁱ—one of the highest in the industry—to guarantee lifetime income that will never decrease and that clients can never outlive, even if their contract value falls to zero.^iv Nationwide L.inc^SM Advisory can provide a balance between growth potential and income protection with a competitive increase of at least 7% simple interest on the client’s income benefit base^v every year during the accumulation phase on the rider anniversary, even when the market is flat or down. When the client’s contract returns above 7% on the rider anniversary, the contract value is the benefit base.

Nationwide L.inc^SM Advisory is designed to help RIAs and fee-based advisors provide a retirement income solution compatible for a shorter accumulation period, which is important during those critical years between the ages of 65 to 75, when most clients start taking retirement income and need income protection.

“The retirement income challenge is real and growing, and research shows that allocating a portion of the portfolio to guaranteed income improves client outcomes. The challenge for RIAs and fee-based advisors is finding insurance and annuities that are built to fit the way they work,” said Craig Hawley, head of Nationwide Advisory Solutions. “More companies continue to claim they offer insurance solutions for RIAs and fee-based advisors, but none have our proven 10-year track record of innovating products, integrating them into advisors’ workstations, and removing friction points around fee-management and licensing. By serving more than 5,500 RIAs and fee-based advisors for more than a decade, and helping them create more value for their clients, we have become a dominant player.”

In an important new enhancement, NARIA can now offer unconstrained 100% equity exposure when combined with Retirement Income Developer^SM (RIDER), a lower cost optional living benefit^vi launched earlier this year. RIDER also includes a potential step-up feature that gives clients the ability to participate in market growth while protecting income from possible market losses. RIDER is designed for longer accumulation periods, with newly increased equity exposure providing an even greater investment flexibility to proactively manage through various market cycles.

In another new enhancement, NARIA now offers tiered pricing for its low-cost platform funds. More than 30 funds, including investment options from DFA, DoubleLine, Vanguard and Nationwide, are now available for competitive cost of 10 bps – 35 bps, in addition to NARIA’s M&E of 20 bps. In total, NARIA offers more than 150 underlying funds from more than 25 fund families, provides more choice and greater investing flexibility than the majority of traditional VAs with living benefits.^vii

Nationwide Advisory Solutions is committed to helping RIAs and fee-based advisors incorporate insurance into the holistic planning process, by eliminating key friction points for advisors while creating greater value for clients. Nationwide Advisory Solutions offers a licensed insurance agent concierge at no additional cost for RIAs who don’t hold an insurance license. They launched Nationwide Advisory Income^SM, the industry’s first single premium immediate annuity (SPIA) for RIAs and fee-based advisors, and pioneered Monument Advisor^®, the industry’s first^viii Flat-Fee^ix Investment-Only Variable Annuity (IOVA).

Nationwide Advisory Solutions has also developed an innovative end-to-end process adopted by more than 5,500 RIAs and fee-based advisors for more holistic planning, including an online application, web-enabled account management, and comprehensive integration capabilities with more than 95% of all fee-based advisory platforms and technologies. Nationwide Advisory Solutions’ award-winning advisor experience^x is built using advanced analytics and artificial intelligence, based on more than a decade of expertise in meeting the unique needs of RIAs and fee-based advisors.

--

ⁱ 0.20% annually (0.15% mortality and expense charge; 0.05% administrative charge)

ⁱⁱ Each adjustment for amounts subsequently surrendered will reduce the living benefit in the same proportion the contract value was reduced on the date of the partial surrender.

ⁱⁱⁱ This is not an increase of the actual contract value, but is an increase of the original benefit base.

^iv All guarantees are subject to rider terms and conditions. If clients take early, excess withdrawals, excess advisory fees, or non-lifetime withdrawals, especially in a down market, loss of income is a possibility. Fees are assessed annually on the income benefit base. Maximum Cost is 1.50% for Nationwide L.inc Advisory and an additional 0.40% for Nationwide L.inc Advisory with the Joint Option.

^v The income benefit base is a numerical value used to determine lifetime withdrawals. This is not a cash value. The calculation may be adjusted for additional purchase payments, excess or non-lifetime withdrawals and the annual step-up opportunity. Refer to the prospectus for more information.

^vi Additional fees apply. See the prospectus for details.

vⁱⁱ Morningstar Data as of 03/01/19.

viⁱⁱ Mogel, Gary S. (2005, June 6), Flat-fee variable annuity makes its debut. Investment News. Retrieved from http://www.investmentnews.com/article/20050606/SUB/506060708

i^x Jefferson National’s Monument Advisor has a $20 monthly flat insurance fee. Additional low-cost fund platform fees ranging from .10% - .35% will be assessed for investors wishing to purchase shares of low-cost funds. See the prospectus for details.

x 2018 WealthManagement.com Innovation Award.

Not a deposit. Not FDIC or NCUSIF insured. Not guaranteed by the institution. Not insured by any federal government agency. May lose value.

All guarantees and protections are subject to the claims paying ability of the issuing company.

An investor should carefully consider the investment objectives, risks, charges and expenses of the investment before investing or sending money. For a prospectus and underlying fund prospectuses containing this and additional information, please contact your financial professional or visit www.nationwideadvisory.com. Read it carefully before investing. The summary of product features is not intended to be all-inclusive. Restrictions may apply. The contracts have exclusions and limitations, and may not be available in all states or at all times.

Variable annuities are investments subject to market fluctuation and risk, including possible loss of principal. Your units, when you make a withdrawal or surrender, may be worth more or less than your original investment.

Variable annuities are long-term investments to help you meet retirement and other long-range goals. Withdrawals of tax-deferred accumulations are subject to ordinary income tax. Withdrawals made prior to age 59½ may incur a 10% IRS tax penalty. Nationwide does not offer tax advice.

Nationwide Advisory Retirement Income Annuity is a variable annuity issued by Nationwide Life Insurance Company, Columbus, Ohio. The general distributor is Nationwide Investment Services Corporation, member FINRA. Products might not be available in all states or territories.

Nationwide Advisory Income is issued by Nationwide Life Insurance Company, Columbus, Ohio.

Monument Advisor is issued in all states, except NY, by Jefferson National Life Insurance Company (Louisville, KY). In New York, Monument Advisor is issued by Jefferson National Life Insurance Company of New York (New York, NY). The general distributor is Jefferson National Securities Corporation, FINRA member. All companies are affiliates of Nationwide Life Insurance Company.

Nationwide, the Nationwide N and Eagle, Nationwide is on your side, Nationwide Advisory Retirement Income Annuity, NARIA, Nationwide Lifetime Income Rider, Nationwide L.inc, and Retirement Income Developer are service marks of Nationwide Mutual Insurance Company. © 2019 Nationwide.

###

This new Special Report, “Successful Advisors: The Year Over Year Trends,” reveals how top performing RIAs and fee-based advisors create greater value for their clients and drive greater growth for their firms. Since the launch of the Advisor Authority study in 2015, the highly successful RIAs and fee-based advisors who earn more and manage more AUM have consistently shared seven traits that help them to drive growth, set the trends and stay one step ahead of the competition.

“Year over year, Advisor Authority has shown that the RIAs and fee-based advisors poised to succeed in the face of increasing competition and the complex dynamics of today’s uncertain world, are those who can differentiate themselves by adopting new technology, adapting to new trends and—perhaps most importantly—putting clients first,” said Craig Hawley, Head of Nationwide Advisory Solutions. “By combining our most recent data with the hands-on knowledge we’ve gained from serving RIAs and fee-based advisors for more than a decade, our latest Advisor Authority Special Report provides a playbook for advisors at every level to learn the seven traits of highly successful advisors, including actionable insights to meet consumer demand, enhance profitability now—and position their firm for the future.”

From among the seven traits of successful advisors found in this new Advisor Authority Special Report, RIAs and fee-based advisors can start to create their own competitive advantage and forge their own path to greater success by focusing on these four:

STAY ONE STEP AHEAD. Year over year, successful advisors prove they’re the ones spotting the latest trends and setting new ones. When it comes to enhancing profitability, year over year, RIAs and fee-based advisors continue to say that the push for new clients is the top driver. Meanwhile, successful advisors stay a step ahead of all other advisors and diversify their plans for profitability by putting more importance on adding new hires (22% vs 11%) and consolidating technology (21% vs 15%). In fact, year over year data shows that successful advisors have consistently relied less on adding new clients than all other advisors (37% vs 46%) and consistently put more focus on adding new technology (27% vs 25%), consolidating technology (21% vs 15%) and adding new hires (22% vs 11%).

BE A TECH INNOVATOR. Successful advisors recognize the value of adopting new technology. On the technology front, successful advisors are a clear step ahead of all other advisors in integrating Artificial Intelligence (AI) (41% vs 27%) and robo-advisors (26% vs 17%) into their practice. Successful advisors are also somewhat more likely than all other advisors to integrate interactive websites and/or client portals (47% vs 38%), mobile websites and/or mobile apps (45% vs 40%), tax optimization tools (38% vs 35%) and account aggregation systems (34% vs 31%). They use technology to transform every aspect of the customer experience, from the front-end to the back office, opening the door to a new category of client, offering a new universe of products and solutions—and ultimately gaining an edge over the competition.

PUT CLIENTS FIRST. By aligning with clients’ best interest, successful advisors earn their trust, deepen the advisor/investor relationship, create greater loyalty—and ultimately bring more assets under management. Putting clients first is the foundation for a thriving practice. It all begins with a fiduciary standard. While the DOL, the SEC and various states have been engaged in their own definition of best interest, and implementing their own version of a fiduciary standard, successful advisors are somewhat more likely than all other advisors to agree that there should be one federal fiduciary standard across the financial industry (82% vs 74%).

COMMIT TO AN EXCEPTIONAL CUSTOMER EXPERIENCE. From the first contact with a new client, to daily communications and their annual review, successful advisors are committed to creating exceptional experiences for their clients. Most importantly, successful advisors are leveraging technology to enhance the experience for their clients. In 2019, successful advisors are somewhat more likely than all other advisors to say that technology helps them free up more time to focus on one-on-one relationships with their clients (35% vs 28%). They are also somewhat more likely to use technology to protect clients against market risk (33% vs 26%) and to provide them with more holistic planning (29% vs 25%).

To learn more about all seven traits of highly successful advisors, financial professionals can download the Advisor Authority 2019 Special Report, “Successful Advisors: The Year Over Year Trends”: https://know.nationwideadvisory.com/AdvisorAuthority2019Ch2

For key insights on the seven traits of successful advisors, financial professionals can also download the latest Advisor Authority 2019 infographic at: https://know.nationwideadvisory.com/AdvisorAuthority2019Ch2Infographic

Nationwide Advisory Solutions was built from the ground up to serve RIAs and fee-based advisors.

Their fifth annual Advisor Authority study explores the investing and advising issues confronting RIAs, fee-based advisors and investors—and the innovative techniques that they need to succeed in today’s complex market. These latest findings are to be followed by a series of ongoing reports that will be released through the first quarter of 2020.

About Advisor Authority: Methodology

The fifth annual Advisor Authority Survey was conducted online within the United States by The Harris Poll on behalf of Nationwide Advisory Solutions from February 15 – March 4, 2019 among 1,021 financial advisors and 824 investors, ages 18+. Among the 1,021 financial advisors, there were 507 Registered Investment Advisors and 514 Broker/Dealers. Among these respondents, a “trended group” of 766 RIAs and fee-based advisors, who meet the same qualification criteria as in prior years of our Advisor Authority research, continue to be the primary focus in this year’s series of Special Reports. Advisors are weighted where necessary by employment status and active management to bring them in line with previous years’ profile. Investors are weighted where necessary by age by gender, race/ethnicity, region, education, income, marital status, household size, investable assets and propensity to be online to bring them in line with their actual proportions in the population.

About The Harris Poll

The Harris Poll is one of the longest running surveys in the U.S. tracking public opinion, motivations and social sentiment since 1963 that is now part of Harris Insights & Analytics, a global consulting and market research firm that delivers social intelligence for transformational times. We work with clients in three primary areas; building twenty-first-century corporate reputation, crafting brand strategy and performance tracking, and earning organic media through public relations research. Our mission is to provide insights and advisory to help leaders make the best decisions possible. To learn more, please visit www.theharrispoll.com.

“Nationwide has been committed to achieving this favorable ruling on behalf of RIAs, fee-based advisors and their clients, and now can provide them with an important benefit that they have been seeking for years,” said Craig Hawley, Head of Nationwide Advisory Solutions. "While Nationwide Advisory Solutions has always been one of the only carriers with a technology platform that gives advisors an automated solution to be paid their fee directly from the annuity, this favorable ruling on the tax-treatment of advisory fees is another milestone in our mission to truly meet the unique needs of RIAs, fee-based advisors and the clients they serve.”

This new IRS ruling essentially conforms the tax treatment of properly structured advisory fees from non-qualified annuities with those from qualified accounts such as 401(k)s, 403(b)s and IRAs, which typically are not treated as taxable distributions. By securing this new ruling, Nationwide helps cut costs and complexity and eliminates a key friction point, allowing RIAs and fee-based advisors to incorporate insurance and annuities into the holistic planning process, to help their clients prepare for and live in retirement.

Among important guidelines cited in the ruling, the advisory fees for the non-qualified annuity cannot exceed 1.5% of its cash value. The ruling applies only to fee-based non-qualified annuities, where the advisor does not receive a commission related to the sale. The fee is paid with respect to the investment advice received by the contract owner specifically related to the non-qualified annuity.

Nationwide Advisory Solutions is the innovator of Nationwide Advisory Retirement Income Annuity^SM (NARIA)^SM, one of the industry’s first variable annuities (VAs) with an income guarantee designed expressly for RIAs and fee-based advisors including fee-management capabilities that will not erode the client’s benefit base. Jefferson National, now doing business as Nationwide Advisory Solutions, is the innovator of Monument Advisor, the industry’s first Flat-Fee Investment Only Variable Annuity (IOVA).

In addition to pioneering product design, Nationwide Advisory Solutions has developed an innovative end-to-end process adopted by more than 6,500 RIAs and fee-based advisors for more holistic financial planning. It features an online application, web-enabled account management and fee-management, comprehensive integration capabilities with more than 95 percent of all fee-based advisory platforms and technologies, including direct data feeds into the advisor’s workstation. Nationwide Advisory Solutions’ award-winning advisor experience is built using advanced analytics and artificial intelligence, based on more than a decade of expertise in meeting the unique needs of RIAs and fee-based advisors.

About Nationwide Advisory Solutions

Nationwide Advisory Solutions is a recognized innovator with a mission to help RIAs and fee-based advisors build their practice by helping their clients to potentially accumulate more wealth and reach their financial goals. Nationwide Advisory Solutions does this by developing and delivering value-added investment products, services and technologies that dovetail with fiduciary obligations—wrapped in an industry-leading customer experience. To learn more, please visit www.nationwideadvisory.com

“There is a disconnect between a woman’s degree of concern and her level of preparation—regardless of her access to an advisor—and the tension is clearly highlighted in Nationwide Advisory Solutions’ Advisor Authority study,” said Kristi Rodriguez, leader of the Nationwide Retirement Institute. “It’s clear that women are highly attuned to the uncertainty in the market and the economy, and that they need more help to protect against these potential risks.”

Less Optimistic, More Concerned—and Less Prepared

Given their less optimistic outlook for the markets and the economy, it follows that women investors are somewhat more concerned than men investors about a US bear market (57% vs 51%) and a US economic recession over the next 12 months (60% vs 57%). Two-thirds of women and men investors (66%) anticipate that market volatility will increase over the next twelve months. Likewise, women are nearly as likely as men to say that protecting assets is among their top financial concerns (26% vs 28%). Yet despite an obvious need, women are far less likely than men to have a strategy in place to protect their assets against market risk (56% vs 71%).

Women investors are also somewhat more likely than men investors to say that outliving retirement savings is a top financial concern (15% vs 9%) but are far less likely than men to have a strategy in place to help protect against outliving their savings (62% vs 76%). Women and men both say that Social Security is their top solution, but women are far more reliant than men (78% vs 66%) on Social Security to help protect themselves against outliving savings. Women are also far less likely than men to use other guaranteed income solutions to protect against outliving savings, such as deferred income annuities (DIAs; 6% vs 18%) and qualified longevity annuity contracts (QLACs; 5% vs 14%), and somewhat less likely to use single premium immediate annuities (10% vs 14%).

“As seen year over year, more women are seeking the help of advisors to solve their concerns, from protecting assets and saving for retirement, to managing volatility,” said Craig Hawley, Head of Nationwide Advisory Solutions. “These advisors have an opportunity—and a responsibility—to understand women’s needs and help them establish a holistic plan that can help them manage through the current uncertainty while helping them remain focused on long term goals.”

Gaps Persist Regardless of Access to Advisor or Affluence

The percentage of women investors working with a financial advisor has increased 14 percentage points between 2016 (44%) and 2019 (58%). Still, women are somewhat less likely to work with a financial advisor than men (58% vs 64%). Even when women work with an advisor, this optimism gap persists. Women investors with an advisor are somewhat less likely than men investors with an advisor to say their outlook for the US market over the next 12 months is optimistic (41% vs 55%) and are far less likely to say their outlook for the US economy over the next 12 months is optimistic (34% vs 52%). In turn, over the next 12 months, they are somewhat more likely to anticipate that market volatility will increase (70% vs 66%), be concerned about a US bear market (65% vs 53%) and be concerned about a US economic recession (69% vs 60%).

The optimism gap narrows for more affluent investors but is still apparent. More affluent women investors are somewhat less likely than more affluent men investors to say their outlook for the US market (44% vs 55%) and US economy (48% vs 57%) over the next 12 months is optimistic. In turn, they are somewhat more likely to anticipate that market volatility will increase (65% vs 59%) and be concerned about a US bear market (61% vs 56%), but only marginally more concerned about a US economic recession (61% vs 60%).

The preparation gap also persists, regardless of access to an advisor or affluence. Even women investors with an advisor are somewhat less likely than men investors with an advisor to have a strategy in place to protect their assets against market risk (63% vs 74%) and to have a strategy in place to help protect against outliving their savings (68% vs 79%). Meanwhile, more affluent women investors are also far more likely than more affluent men investors to say that protecting their assets is a top concern (45% vs 31%), yet they are still somewhat less likely to have a strategy in place to protect their assets against market risk (75% vs 81%). While affluent investors are the cohort most likely to have a strategy in place to help protect against outliving their savings, affluent women investors are still marginally less likely than affluent men investors to have such a strategy (86% vs 88%).

For additional insights on women investors, download the latest infographic from the fifth annual Advisor Authority study at: https://know.nationwideadvisory.com/AdvisorAuthority2019WomenInvestorsInfographic

The fifth annual Advisor Authority study explores the investing and advising issues confronting RIAs, fee-based advisors and investors—and the innovative techniques that they need to succeed in today’s complex market. These latest findings are to be followed by a series of ongoing reports that will be released through the first quarter of 2020.

About Advisor Authority: Methodology

The fifth annual Advisory Authority Survey was conducted online within the United States by The Harris Poll on behalf of Nationwide Advisory Solutions from February 15 – March 4, 2019 among 1,021 financial advisors and 824 investors, ages 18+. Among the 1,021 financial advisors, there were 507 Registered Investment Advisors and 514 Broker/Dealers. Among the 824 investors, there were 340 female investors and 484 male investors, and there were 205 Mass Affluent (Household Investable Assets of $100,000 to less than $500,000), 205 Emerging High Net Worth ($500,000 to less than $1 Million), 207 High Net Worth ($1 Million to less than $5 Million) and 207 Ultra High Net Worth ($5 Million or more). Advisors are weighted where necessary by employment status and active management to bring them in line with previous years’ profile. Investors are weighted where necessary by age by gender, race/ethnicity, region, education, income, marital status, household size, investable assets and propensity to be online to bring them in line with their actual proportions in the population.

About The Harris Poll

The Harris Poll is one of the longest running surveys in the U.S. tracking public opinion, motivations and social sentiment since 1963 that is now part of Harris Insights & Analytics, a global consulting and market research firm that delivers social intelligence for transformational times. We work with clients in three primary areas; building twenty-first-century corporate reputation, crafting brand strategy and performance tracking, and earning organic media through public relations research. Our mission is to provide insights and advisory to help leaders make the best decisions possible. To learn more, please visit www.theharrispoll.com.

About Nationwide Advisory Solutions

Nationwide Advisory Solutions, formerly known as Jefferson National, is a recognized innovator with a mission to help RIAs and fee-based advisors build their practice by helping their clients to potentially accumulate more wealth and reach their financial goals. Nationwide Advisory Solutions does this by developing and delivering value-added investment products, services and technologies that dovetail with fiduciary obligations—wrapped in an industry-leading customer experience. To learn more, please visit www.nationwideadvisory.com

These are among the findings in a new Special Report, “Safe Havens in an Uncertain World,” from the fifth annual Advisor Authority Study of more than 1,600 RIAs, fee-based advisors and individual investors, commissioned by Nationwide Advisory Solutions and conducted online by The Harris Poll. This 360-degree view on the top factors causing financial concerns, impacting portfolios and driving volatility—and the top proactive strategies to meet clients’ complex needs—can help RIAs and fee-based advisors compete more effectively in times of rising uncertainty.

“More than a decade after the Financial Crisis of 2008, concern about volatility is again top of mind for advisors and investors alike, and uncertainty is on the rise,” said Craig Hawley, Head of Nationwide Advisory Solutions. “Our latest Advisor Authority Special Report uncovers the key factors that RIAs and fee-based advisors need to understand investors’ top concerns, confront the complex dynamics of a challenging market and create the ‘safe haven’ investors seek—unlocking greater loyalty and attracting new clients to drive greater growth.”

The opportunity is substantial. In the face of rising uncertainty, the number of investors who say they have an advisor is on the upswing, increasing eleven percentage points in four years, to 62% in 2019 from 51% in 2016.

Understanding Investor and Advisor Outlook and Concerns

Optimism was high leading into 2018, fueled by the prospects of a finance-friendly tax plan, the administration’s promise to cut regulation and a business-friendly majority in both the House and the Senate. But investor and advisor optimism both declined leading into 2019 as uncertainty has prevailed—aggravated by uncertainty around interest rates, the less promising reality of tax-reform, the growing partisan divide and an escalating trade war with China.

Now investors, RIAs and fee-based advisors are cautious, yet clear-eyed. Nearly six in 10 investors (58%) and more than half of RIAs and fee-based advisors (54%) are concerned about a U.S. economic recession over the next 12 months. Over half of investors (54%) and RIAs and fee-based advisors (56%) are concerned about a U.S. bear market over the next 12 months. Likewise, two-thirds of investors (66%) and more than half of advisors (56%) expect market volatility to increase over the next 12 months.

At the same time, they are focused on practical matters impacting their wallets and their portfolios. Investors say cost of healthcare (33%) is their number-one financial concern, followed by taxes (31%), protecting assets (27%), saving enough for retirement (23%) and inflation (16%). RIAs and fee-based advisors also most commonly cite cost of healthcare (27%) as their clients’ number-one financial concern, followed closely by taxes, protecting assets and saving enough for retirement in a three-way tie for second place (all at 26%). Rising interest rates are a close third at 24%—and as other findings from this survey show, interest rates are a recurring concern for RIAs and fee-based advisors.

Causes of Volatility: Gridlock in Washington & Global Instability

Without a doubt, some investors are losing sleep over market volatility. More than one-fourth of investors (28%) say that market volatility keeps them up at night when they think of protecting their assets and saving enough for retirement (30%).

Headlines about lawmakers at home and abroad are top of mind—and impacting the markets—according to investors. Gridlock in Washington is the number-one factor most likely to cause volatility, selected by nearly half (45%) of investors. Global instability is second, selected by 38% of investors, and U.S. economic performance is a close third, selected by 32%.

RIAs and fee-based advisors have a somewhat different viewpoint. According to advisors, interest rates are the number-one factor most likely to cause market volatility, selected by one-third (33%). This is followed closely by gridlock in Washington and U.S. economic performance, tied for second at 30% and global instability is a close third at 29%.

Managing Volatility: Strategies & Solutions

As noted, the number of investors who say they have an advisor is growing year over year. Asked to identify what would increase the likelihood that they would work with an advisor over the next 12 months, over half of investors (54%) say market volatility is the number-one scenario. Asked to identify the most important benefit of working with an advisor when markets are volatile, investors with an advisor say that helping them stay focused on long-term goals (21%) is number-one. This is followed closely by helping them make more informed decisions (20%) and protecting their assets against market risk (20%).

With volatility on the rise, the vast majority of RIAs and fee-based advisors (88%) have a strategy to protect their clients’ assets against market risk. While only 65% of investors in 2019 say they have a strategy to protect their own assets, this is up eight percentages points from just 57% of investors in 2018.

To protect assets against market risk, nearly two-thirds of advisors (62%) and investors (63%) agree that diversification is their most utilized solution. However, RIAs and fee-based advisors are more focused than investors on a diverse range of solutions—including fixed annuities (53% vs. 30%), fixed index annuities (48% vs. 23%) and liquid alternatives (44% vs. 26%).

To learn more about the factors driving key concerns and top proactive strategies, financial professionals can download the Advisor Authority 2019 Special Report, “Safe Havens in an Uncertain World” at: https://know.nationwideadvisory.com/AdvisorAuthority2019Ch1

For additional insights, financial professionals can also download the latest Advisor Authority 2019 infographic at: https://know.nationwideadvisory.com/AdvisorAuthority2019Ch1Infographic

The fifth annual Advisor Authority study explores the investing and advising issues confronting RIAs, fee-based advisors and investors—and the innovative techniques that they need to succeed in today’s complex market. It features a special focus on the most successful advisors and the most affluent investors. These latest findings from the fifth annual study are part of an ongoing series of Special Reports that will be released through the first quarter of 2020.

About Advisor Authority: Methodology

The fifth annual Advisor Authority Survey was conducted online within the United States by The Harris Poll on behalf of Nationwide Advisory Solutions from February 15 – March 4, 2019 among 1,021 financial advisors and 824 investors, ages 18+. Among the 1,021 financial advisors, there were 507 Registered Investment Advisors and 514 Broker/Dealers. Among these respondents, a “trended group” of 766 RIAs and fee-based advisors, who meet the same qualification criteria as in prior years of our Advisor Authority research, continue to be the primary focus in this year’s series of Special Reports. Included in this group of financial advisors is a new segment of 255 Wirehouse Broker/Dealers that is excluded from trended data to allow for year-over-year comparisons. Among the 824 investors, there were 205 Mass Affluent (Household Investable Assets of $100,000 to less than $500,000), 205 Emerging High Net Worth ($500,000 to less than $1 Million), 207 High Net Worth ($1 Million to less than $5 Million) and 207 Ultra High Net Worth ($5 Million or more). Results of this new research are compared to results from similar 2016, 2017 and 2018 studies conducted online by The Harris Poll on behalf of Nationwide Advisory Solutions. Detailed methodologies from these studies are available upon request.

Advisors are weighted where necessary by employment status and active management to bring them in line with previous years’ profile. Investors are weighted where necessary by age by gender, race/ethnicity, region, education, income, marital status, household size, investable assets and propensity to be online to bring them in line with their actual proportions in the population.

About The Harris Poll

The Harris Poll is one of the longest running surveys in the U.S. tracking public opinion, motivations and social sentiment since 1963 that is now part of Harris Insights & Analytics, a global consulting and market research firm that delivers social intelligence for transformational times. We work with clients in three primary areas; building twenty-first-century corporate reputation, crafting brand strategy and performance tracking, and earning organic media through public relations research. Our mission is to provide insights and advisory to help leaders make the best decisions possible. To learn more, please visit www.theharrispoll.com.

About Nationwide Advisory Solutions

Nationwide Advisory Solutions is a recognized innovator with a mission to help RIAs and fee-based advisors build their practice by helping their clients to potentially accumulate more wealth and reach their financial goals. Nationwide Advisory Solutions does this by developing and delivering value-added investment products, services and technologies that fit the fiduciary standard—wrapped in an industry-leading customer experience. To learn more, please visit www.nationwideadvisory.com

This year, the percentage of RIAs and fee-based advisors who expect RIA industry M&A to increase has declined nine percentage points—to 59 percent in 2019 from 68 percent in 2018—following a peak of 70 percent in 2017, 68 percent in 2016 and 65 percent in 2015. This is the lowest percentage of RIAs and fee-based advisors to predict increased activity since the study was commissioned five years ago, suggesting there may be concern that issues with the market and the economy may erode valuations and decrease opportunities for transactions. In fact, among RIAs and fee-based advisors, 56 percent anticipate that market volatility will increase over the next 12 months and 56 percent are concerned about a U.S. Bear Market over the next 12 months, followed closely by 54 percent who are concerned about a U.S. economic recession over the next 12 months.

“Since launching our Advisor Authority study in 2015, a growing number of RIAs and fee-based advisors were saying that M&A activity would increase—so this year’s sharp reversal in the trend could be an indicator of greater uncertainty about the market and the economy,” said Craig Hawley, Head of Nationwide Advisory Solutions. “But at the same time that RIAs and fee-based advisors are less bullish about the pace of consolidation and M&A activity, the majority still say that these deals will have a positive impact on their business. Consolidation among firms is driven by a variety of factors—including increasing competition, rising fee compr][ession, the need for greater scale, as well as succession planning for a generation of older advisors.”

Serving Clients and Achieving Scale

The RIAs and fee-based advisors who say that M&A will positively impact their business is up slightly in recent years (51% in 2019, 51% in 2018, 49% in 2017, 47% in 2016). Consistently, sentiment surrounding M&A activity in the RIA industry shows that advisors remain focused on delivering excellent service in their clients’ best interest and achieving greater scale. Year over year, among RIAs and fee-based advisors who feel positively about the effect of M&A activity impacting their business in the next 12 months, the top two reasons include greater resources to serve their clients (31% in 2019, 38% in 2018, 42% in 2017, 36% in 2016) and greater resources to expand and scale their businesses (31% in 2019, 35% in 2018, 32% in 2017, 34% in 2016).

Foreshadowing the “Silver Exit”

As ten thousand Baby Boomers a day turn 65 and prepare to retire, an early indicator of the RIA industry’s looming “Silver Exit” may be foreshadowed in the positive sentiment around M&A. Year over year, RIAs and fee-based advisors who indicate positive sentiment about the effect of M&A activity are slightly more likely to say it allows them to create a succession plan (28% in 2019, 26% in 2018, 25% in 2017, 24% in 2016) and it increases opportunities to sell their business (27% in 2019, 25% in 2018, 20% in 2017, 21% in 2016). Meanwhile, they are slightly less likely to say it increases opportunities to buy another practice (26% in 2019, 25% in 2018, 29% in 2017, 32% in 2016).

A Path to Success

Year over year, Advisor Authority has also shown that the most successful advisors—defined as those who earn more than $500,000 or individually manage total AUM of $250 million or more—eagerly adapt to industry trends like M&A to benefit the growth of their firm. They are more optimistic than all advisors about the pace of M&A and its impact on their practice to tap into greater potential. As this year’s study shows, the successful advisors who expect RIA industry M&A to increase has declined only four percentage points—to 71 percent in 2019 from 75 percent in 2018—following 76 percent in 2017, 73 percent in 2016 and a peak of 77 percent in 2015.

Successful RIAs and fee-based advisors are more likely than all RIAs and fee-based advisors to say that M&A will positively impact their business (64% in 2019, 57% in 2018, 61% in 2017, 62% in 2016). Successful advisors who indicate positive sentiment about the effect of M&A activity also say top reasons include greater resources to serve their clients (36% in 2019, 32% in 2018, 35% in 2017, 35% in 2016) and greater resources to expand and scale their businesses (35% in 2019, 30% in 2018, 39% in 2017, 29% in 2016). Of note, in 2019 successful advisors are somewhat more likely than all RIAs and fee-based advisors to say M&A activity has a positive impact because it increases opportunities to buy another practice (31% vs. 26%) and somewhat less likely to say it increases opportunities to sell their business (25% vs. 27%).

Challenges and Concerns

A relatively small percentage of RIAs and fee-based advisors feel negatively about the impact of consolidation and M&A activity on their business in the next 12 months (12% in 2019, 12% in 2018, 12% in 2017, 15% in 2016). This year, the number-one reason cited by those who feel negatively was a preference to manage their business independently without oversight, which directionally increased compared to prior years (33% in 2019, 20% in 2018, 19% in 2017, 22% in 2016). In prior years, the number-one reason cited by those who feel negatively was the challenges of competing as a small independent firm (32% in 2019, 48% in 2018, 43% in 2017, 39% in 2016). Year over year, increased pressure to “sell” products that might not be right for clients is also cited among the top three factors for negative sentiment about the impact of M&A (32% in 2019, 39% in 2018, 37% in 2017, 36% in 2016).

“There is an industry-wide shift toward a fee-based model as more investors demand personalized, holistic financial advice that is in their best interest,” added Hawley. “Our findings show that overall, RIAs and fee-based advisors believe consolidation and M&A creates more opportunity for independent shops and is not synonymous with increasing pressure to compromise their fiduciary standard.”

For additional insights on RIA Industry M&A, financial professionals can also download the latest infographic from the fifth annual Advisor Authority study at:

https://know.nationwideadvisory.com/AdvisorAuthority2019/MAInfographic

The fifth annual Advisor Authority study explores the investing and advising issues confronting RIAs, fee-based advisors and investors—and the innovative techniques that they need to succeed in today’s complex market. It features a special focus on the most successful advisors and the most affluent investors. These latest findings are to be followed by a series of ongoing reports that will be released through the first quarter of 2020.

About Advisor Authority: Methodology

The fifth annual Advisory Authority Survey was conducted online within the United States by The Harris Poll on behalf of Nationwide Advisory Solutions from February 15 – March 4, 2019 among 1,021 financial advisors and 824 investors, ages 18+. Among the 1,021 financial advisors, there were 507 Registered Investment Advisors and 514 Broker/Dealers. Among the 824 investors, there were 205 Mass Affluent (Household Investable Assets of $100,000 to less than $500,000), 205 Emerging High Net Worth ($500,000 to less than $1 Million), 207 High Net Worth ($1 Million to less than $5 Million) and 207 Ultra High Net Worth ($5 Million or more). Advisors are weighted where necessary by employment status and active management to bring them in line with previous years’ profile. Investors are weighted where necessary by age by gender, race/ethnicity, region, education, income, marital status, household size, investable assets and propensity to be online to bring them in line with their actual proportions in the population.

About The Harris Poll

The Harris Poll is one of the longest running surveys in the U.S. tracking public opinion, motivations and social sentiment since 1963 that is now part of Harris Insights & Analytics, a global consulting and market research firm that delivers social intelligence for transformational times. We work with clients in three primary areas; building twenty-first-century corporate reputation, crafting brand strategy and performance tracking, and earning organic media through public relations research. Our mission is to provide insights and advisory to help leaders make the best decisions possible. To learn more, please visit www.theharrispoll.com.

About Nationwide Advisory Solutions

Nationwide Advisory Solutions, formerly known as Jefferson National, is a recognized innovator with a mission to help RIAs and fee-based advisors build their practice by helping their clients to potentially accumulate more wealth and reach their financial goals. Nationwide Advisory Solutions does this by developing and delivering value-added investment products, services and technologies that dovetail with fiduciary obligations—wrapped in an industry-leading customer experience. To learn more, please visit www.nationwideadvisory.com

“When the 2017 Tax Cuts & Jobs Act was passed, the vast majority of RIAs and fee-based advisors anticipated clients’ anxieties and began taking action. But as our latest Advisor Authority study shows, the benefits of tax reform were not as widespread as originally expected, and both advisors and investors continue to say that taxes are a top concern,” said Craig Hawley, Head of Nationwide Advisory Solutions. “Taxes present a prime opportunity for advisors to use new strategies and tech solutions to mitigate the impact on clients—at the same time that they can expand their services and generate more business. By remaining focused on holistic planning and proactive solutions, RIAs and fee-based advisors can serve their clients’ best interests as well as their own.”

Impacts and Increasing Concerns

Investors remain less confident about tax reform, with just 53 percent of all investors in 2019 saying they will benefit as compared to 56 percent of all investors in 2018. One of the biggest shifts in investors was among the Ultra High Net Worth, with those who say they will benefit from tax reform declining nearly 10 percentage points—to 65 percent in 2019 from 74 percent in 2018. To alleviate clients’ anxiety about the impact of tax reform, the vast majority of RIAs and fee-based advisors have been taking action, with 75 percent in 2019 and 79 percent in 2018 saying that they have adapted their approach to tax-advantaged investing in response.

Year-over-year, RIAs and fee-based advisors rate taxes among their clients’ top financial concerns and say that their clients’ level of concern is increasing. RIAs and fee-based advisors say that taxes rose to a number-two concern for clients in 2019, from a number-three concern in 2018, a number-four concern in 2017, and their number-six concern in 2016. Likewise, investors also say that taxes are among their top financial concerns year-over-year and that their level of concern has increased. Investors rated taxes as a number-two financial concern in 2019 and 2018, rising from a number-four concern in 2017 and number-three concern in 2016.

RIAs and fee-based advisors say that taxes are the number-five cause of volatility, and taxes are inexorably tied to portfolio performance, with both advisors and investors alike citing a negative impact. When asked what macro factors will most adversely impact their clients’ portfolios over the next 12 months, RIAs and fee-based advisors rated taxes number-three in 2019 and 2018, rising from number-five in 2017 and 2016.

Investors cited even greater concerns, rating taxes as the number-two macro issue that will adversely impact their portfolio in 2019 and 2016, with taxes rising to the number-one macro issue in 2018 and 2017. Ultra High Net Worth investors rated taxes the number-three macro factor that will most adversely impact their portfolio in 2019, dropping from the number-one macro issue in 2018, 2017 and 2016. Taxes continue to be complex and can be one of the biggest investment expenses a client may face, as much as 40 percent or more when federal and state taxes are combined.

Opportunities and Solutions

Just as they are now less likely to believe that their clients will benefit from tax reform, the RIAs and fee-based advisors who believe that they will benefit from tax reform have also declined nearly 10 percentage points—to 68 percent in 2019 from 77 percent in 2018. But in spite of the challenges, nearly two-thirds of RIAs and fee-based advisors (60%) say that tax reform will provide them with the opportunity to expand their services and generate more business related to tax planning.

The most likely ways that the 2017 Tax Cuts & Jobs Act will impact RIAs and fee-based advisors’ business over the next 12 months include the way they generate retirement income for clients (28%) and the products or solutions advisors use with clients (22%). As a result of the 2017 Tax Cuts & Jobs Act, RIAs and fee-based advisors said that the products they are most likely to use to generate retirement income over the next 12 months include:

• Fixed income ladder/bond ladder (22%)
• Variable annuities with living benefits (20%)
• Qualified longevity annuity contracts (QLACs) (20%)
• Yield generating ETFs/income generating ETFs (20%)
• Dividend yielding stocks (19%)

Only 2 in 10 RIAs and fee-based advisors (21%) said that the 2017 Tax Cuts & Jobs Act will not impact their business.

Year-over-year, Advisor Authority shows that adding new technology is important to enhancing profitability and technology can help advisors better serve their clients. One in four advisors believe technology will help them provide more personalized, holistic financial planning over the next 12 months. Year-over-year, tax optimization tools are consistently rated among the top four or five types of technology RIAs and fee-based advisors are interested in integrating into their practice over the next 12 months.

For additional insights on the impact of taxes and tax reform, financial professionals can also download the latest Advisor Authority 2019 infographic at: https://know.nationwideadvisory.com/AdvisorAuthority2019TaxInfographic

The fifth annual Advisor Authority study explores the investing and advising issues confronting RIAs, fee-based advisors and investors—and the innovative techniques that they need to succeed in today’s complex market. It features a special focus on the most successful advisors and the most affluent investors. These initial findings are to be followed by a series of ongoing reports that will be released over the next 12 months.

About Advisor Authority: Methodology

The fifth annual Advisory Authority Survey was conducted online within the United States by The Harris Poll on behalf of Nationwide Advisory Solutions from February 15 – March 4, 2019 among 1,021 financial advisors and 824 investors, ages 18+. Among the 1,021 financial advisors, there were 507 Registered Investment Advisors and 514 Broker/Dealers. Among the 824 investors, there were 205 Mass Affluent (Household Investable Assets of $100,000 to less than $500,000), 205 Emerging High Net Worth ($500,000 to less than $1 Million), 207 High Net Worth ($1 Million to less than $5 Million) and 207 Ultra High Net Worth ($5 Million or more). Advisors are weighted where necessary by employment status and active management to bring them in line with previous years’ profile. Investors are weighted where necessary by age by gender, race/ethnicity, region, education, income, marital status, household size, investable assets and propensity to be online to bring them in line with their actual proportions in the population.

About The Harris Poll

The Harris Poll is one of the longest running surveys in the U.S. tracking public opinion, motivations and social sentiment since 1963 that is now part of Harris Insights & Analytics, a global consulting and market research firm that delivers social intelligence for transformational times. We work with clients in three primary areas; building twenty-first-century corporate reputation, crafting brand strategy and performance tracking, and earning organic media through public relations research. Our mission is to provide insights and advisory to help leaders make the best decisions possible. To learn more, please visit www.theharrispoll.com.

About Nationwide Advisory Solutions

Nationwide Advisory Solutions, formerly known as Jefferson National, is a recognized innovator with a mission to help RIAs and fee-based advisors build their practice by helping their clients to potentially accumulate more wealth and reach their financial goals. Nationwide Advisory Solutions does this by developing and delivering value-added investment products, services and technologies that dovetail with fiduciary obligations—wrapped in an industry-leading customer experience. To learn more, please visit www.nationwideadvisory.com

NARIA can help RIAs and fee-based advisors incorporate insurance into the holistic planning process with a simple, transparent, low-costⁱ VA to help clients prepare for and live in retirement. NARIA is one of the industry’s first “advisory friendly” VAs with fee-management capabilities that will not erode the client’s benefit baseⁱⁱ, eliminating a key friction point for advisors while creating greater value for clients. For RIAs who don’t hold an insurance license, Nationwide Advisory Solutions provides a licensed insurance agent service direct to the advisor and their client at no additional cost, to help them enhance their client relationship and eliminate the unnecessary expense of any third party.

“As 10,000 Boomers a day leave the workforce to start a retirement that could last 20 to 30 years or more, saving enough for retirement and outliving their savings are among their greatest fears. To help clients accumulate more for retirement and generate guaranteed income they can’t outlive, NARIA is a new insurance solution designed to fit the way RIAs and fee-based advisors work,” said Craig Hawley, head of Nationwide Advisory Solutions. “While more companies claim to offer insurance for the independent fee-based channel, none have our proven track record. We have become a dominant player by serving more than 5,500 RIAs and fee-based advisors and helping them create a competitive advantage.”

With NARIA, RIAs and fee-based advisors can provide more holistic planning, by incorporating insurance that combines tax-deferred growth potential, downside protection and guaranteed retirement income for life. NARIA Retirement Income Developer^SM, an optional living benefitⁱⁱⁱ, is designed for pre-retirees and retirees who need future income guaranteed for life but also desire market participation. This guaranteed lifetime withdrawal benefit with a potential step-up feature gives clients the ability to benefit from potential market growth while protecting income from possible market losses. Withdrawing income will not change the client’s benefit base, but certain types of withdrawals can impact income, contract value and death benefits. Offering more than 130 underlying funds from more than 25 fund families, NARIA provides more choice and greater investing flexibility than the majority of traditional VAs with living benefits.^iv

In addition to innovating product design, Nationwide Advisory Solutions has developed an innovative end-to-end process adopted by more than 5,500 RIAs and fee-based advisors. This includes an online application, web-enabled account management, and comprehensive integration capabilities with more than 95 percent of all fee-based advisory platforms and technologies, including direct data feeds into the advisor’s workstation, allowing RIAs and fee-based advisors to manage a client’s insurance assets alongside other investments in their portfolio, for more holistic financial planning. Nationwide Advisory Solutions’ award-winning advisor experience^v is built using advanced analytics and artificial intelligence, based on more than a decade of expertise in meeting the unique needs of RIAs and fee-based advisors.

Further expanding the category of insurance products expressly designed for RIAs and fee-based advisors marks another key integration milestone for Nationwide Advisory Solutions and its Fortune 100 parent. This follows the recent launch in late 2018 of Nationwide Advisory Income^SM, the industry’s first single premium immediate annuity (SPIA) for RIAs and fee-based advisors. Nationwide Advisory Solutions, formerly known as Jefferson National, is the pioneer behind Monument Advisor, the industry’s first^vi Flat-Fee^vii Investment-Only Variable Annuity (IOVA). Nationwide Advisory Solutions was acquired in 2017 by Nationwide, one of the largest providers of insurance and financial services products in the U.S.

About Nationwide Advisory Solutions

Nationwide Advisory Solutions, formerly known as Jefferson National, is a recognized innovator^v with a mission to help RIAs and fee-based advisors build their practice by helping their clients to potentially accumulate more wealth and reach their financial goals. It does this by developing and delivering value-added investment products, services and technologies that dovetail with fiduciary obligations—wrapped in an industry-leading customer experience.^v To learn more, please visit www.nationwideadvisory.com

ⁱ 0.20% annually (0.15% mortality and expense charge; 0.05% administrative charge)

ii Each adjustment for amounts subsequently surrendered will reduce the living benefit in the same proportion the contract value was reduced on the date of the partial surrender.

iii Additional fees apply. See the prospectus for details.

iv Morningstar Data as of 03/01/19.

v 2018 WealthManagement.com Innovation Award.

vi Mogel, Gary S. (2005, June 6), Flat-fee variable annuity makes its debut. Investment News. Retrieved from http://www.investmentnews.com/article/20050606/SUB/506060708

vii Jefferson National’s Monument Advisor has a $20 monthly flat insurance fee. Additional low-cost fund platform fees ranging from .10% - .35% will be assessed for investors wishing to purchase shares of low-cost funds. See the prospectus for details.

Not a deposit. Not FDIC or NCUSIF insured. Not guaranteed by the institution. Not insured by any federal government agency. May lose value.

All guarantees and protections are subject to the claims paying ability of the issuing company.

An investor should carefully consider the investment objectives, risks, charges and expenses of the investment before investing or sending money. For a prospectus and underlying fund prospectuses containing this and additional information, please contact your financial professional or visit www.nationwideadvisory.com. Read it carefully before investing. The summary of product features is not intended to be all-inclusive. Restrictions may apply. The contracts have exclusions and limitations, and may not be available in all states or at all times.

Variable annuities are investments subject to market fluctuation and risk, including possible loss of principal. Your units, when you make a withdrawal or surrender, may be worth more or less than your original investment.

Variable annuities are long-term investments to help you meet retirement and other long-range goals. Withdrawals of tax-deferred accumulations are subject to ordinary income tax. Withdrawals made prior to age 59½ may incur a 10% IRS tax penalty. Jefferson National does not offer tax advice

Nationwide Advisory Retirement Income Annuity is a variable annuity issued by Nationwide Life Insurance Company, Columbus, Ohio. The general distributor is Nationwide Investment Services Corporation, member FINRA. Products might not be available in all states or territories.

Nationwide Advisory Income is issued by Nationwide Life Insurance Company, Columbus, Ohio.

Monument Advisor is issued in all states, except NY, by Jefferson National Life Insurance Company (Louisville, KY). In New York, Monument Advisor is issued by Jefferson National Life Insurance Company of New York (New York, NY). The general distributor is Jefferson National Securities Corporation, FINRA member. All companies are affiliates of Nationwide Life Insurance Company.

Nationwide, the Nationwide N and Eagle, Nationwide is on your side, Nationwide Advisory Retirement Income Annuity, NARIA and Retirement Income Developer are service marks of Nationwide Mutual Insurance Company. © 2019 Nationwide.

Nationwide, one of the largest providers of insurance and financial services products in the U.S., will expand its strong distribution capabilities in the independent channel as one of the few select solutions providers on the Envestnet Insurance Exchange, a new insurance network that integrates insurance solutions into the wealth management process on the Envestnet platform. Envestnet Insurance Exchange is powered by FIDx technology, which integrates the brokerage, insurance and advisory ecosystems to offer best-in-class annuities and insurance solutions from the industry’s leading carriers.

Year over year, holistic financial planning is among the top three factors investors use to choose their advisor, according to Nationwide Advisory Solutions’ annual Advisor Authority study of more than 1,700 RIAs, fee-based advisors and individual investors. As fee-compression is on the rise, and asset management becomes more commoditized, holistic planning is key for the most successful advisors to create a competitive advantage. For many RIAs and fee-based advisors, insurance solutions, including annuities, that fit the way they work is the missing part of their clients’ holistic financial plans—and that means a missed opportunity for growing their practices. Nationwide’s collaboration with Envestnet helps close this gap by allowing advisors access to insurance solutions designed to fit the way they work.

“Joining the Envestnet Insurance Exchange is one more way for us to build on a successful 10-year track record of serving independent advisors the way they want to be served – using the platforms and technology they want to use – to manage insurance holistically alongside the other assets in their clients’ portfolios,” said Craig Hawley, head of Nationwide Advisory Solutions. “Built from the ground up to meet the unique needs of RIAs and fee-based advisors, we have become a dominant player in the independent channel by integrating our fee-based insurance solutions into the practice of more than 5,500 RIAs and fee-based advisors. Backed by the power of our Fortune 100 parent, we continue to focus on ways for Nationwide to expand, innovate and serve the growing ranks of the independent channel.”

Nationwide’s collaboration with Envestnet can make annuities and insurance more accessible for advisors who don’t specialize in selling them and help provide a range of benefits for their clients at every stage of the financial lifecycle—a tool for tax advantaged investing, a source of guaranteed income in retirement, a method for managing risk and a solution for legacy planning.

“As the industry shifts and the number of RIAs and fee-based advisors continues to grow, we’ll continue to create new opportunities to serve more of these advisors and their clients in the ways they prefer to do business,” said Kirt Walker, president and COO of Nationwide Financial. “It’s a tremendous engine for growth going forward.”

Nationwide has made a considerable commitment to the advisory business since the acquisition of Nationwide Advisory Solutions in 2017, as evidenced by recent transitions to relationship manager led structure as a strategic move with firms to address growing interest in expanding within the advisory space.

In addition, Nationwide has created the new role of leader of fee-based product development and has announced that Cathy Marasco will transition into this position from her current role as associate vice president of Nationwide’s annuity and life insurance businesses. Her extensive experience, both with fee-based business and annuity product development, will allow Nationwide to help bring competitive and innovative new products to advisory distribution while maintaining market leadership.

About Nationwide Advisory Solutions

Nationwide Advisory Solutions, formerly known as Jefferson National, is a recognized innovator with a mission to help RIAs and fee-based advisors build their practice by helping their clients to potentially accumulate more wealth and reach their financial goals. Nationwide Advisory Solutions does this by developing and delivering value-added investment products, services and technologies that fit the fiduciary standard—wrapped in an industry-leading customer experience. To learn more, please visit www.nationwideadvisory.com.

Nationwide and its affiliates are not affiliated to Envestnet Insurance Exchange or Fiduciary Exchange, LLC and their affiliates.

Nationwide, Nationwide is on your side, the Nationwide N and Eagle are service marks of Nationwide Mutual Insurance Company. © 2019

“Year-over-year, RIAs and fee-based advisors say that adding new clients is the number-one driver of profitability, and the HNW and Ultra HNW are an ideal target, as their numbers are growing and their wealth is increasing. But they have unique needs—and face unique risks—that advisors must understand in order to build trusted relationships,” said Craig Hawley, Head of Nationwide Advisory Solutions. “Uncovering the key factors to satisfy this valuable client segment of more affluent investors, our latest Advisor Authority Special Report can help RIAs and fee-based advisors drive greater growth—and greater success.”

The opportunity is substantial. Driven by robust equity returns, brisk economic performance and rising investor confidence, in 2017 HNW and Ultra HNW investors in the U.S. saw their total wealth increase 10.5 percent to $18.6 trillion and the number of HNW and Ultra HNW investors increased 10 percent to 5.3 million individuals. The U.S. continues to be home to the largest number of HNW and Ultra HNW investors holding the greatest amount of wealth in the world.[i]

Yet more than one-fourth of these more affluent investors do not have a financial advisor (29% HNW and 26% Ultra HNW) according to this latest Advisor Authority Special Report. “Winning the High Net Worth: Unlock Greater Growth Serving More Affluent Investors” helps RIAs and fee-based advisors understand this valuable client segment and compete more effectively for their business.

Top Priorities to Attract and Retain the HNW

To effectively attract and retain the HNW, advisors must align with their top priorities. Year-over-year, more affluent investors say that the single most important reason for having a financial advisor is to feel more confident in their financial future, rating it number-one by a wide margin (39% HNW and 38% Ultra HNW) in this year’s study.

Drilling deeper on the main reasons why more affluent investors have a financial advisor reveals the unique needs of their complex financial lives. Whereas the typical investor is more likely to seek advice about saving enough for retirement (16%), the HNW are somewhat more likely to seek advice because financial planning is a focus (15%) but they lack confidence in managing their own assets (11%) and they lack the time to manage their own finances (11%). The Ultra HNW are more likely than the typical investor to seek advice for leaving a financial legacy (12%) and for help managing their taxes (9%).

Additionally, year-over-year, more affluent investors say that the top three factors which influenced their decision for choosing their advisor include advisor experience (50% HNW and 38% Ultra HNW), personalized advice for a holistic financial picture (31% HNW and 20% Ultra HNW), and a fiduciary standard that puts clients’ best interest first (29% HNW and 24% Ultra HNW). In fact, this year’s study shows that these more affluent investors are more likely to believe there should be one federal fiduciary standard across the financial industry (74% HNW and 80% Ultra HNW vs 68% All Investors). This year’s study also shows that technology matters to the Ultra HNW, who are more likely to cite increased use of social media (18%), mobile technology (16%) and robo advisors (12%) as factors for choosing an advisor.

Address Top Concerns to Create Confidence

Having substantially more wealth does not always translate into a more optimistic financial outlook. When asked their financial outlook for 2018, the HNW are only somewhat more optimistic (65%)—while the Ultra HNW are somewhat less optimistic (58%)—compared to all investors (62%).

More wealth means affluent investors have more to lose. Protecting assets is a top concern for investors at every level in 2018, and especially for the HNW. Year-over-year they say this is their number-one concern by a wide margin (45% in 2018, 41% in 2017 and 41% in 2016). This year, taxes rose to the number-one concern for the Ultra HNW (42% in 2018, from 29% in 2017 and 32% in 2016), while protecting assets was their top concern in prior years (40% in 2017 and 33% in 2016). Whereas the typical investor is more concerned about saving for retirement (21%) and managing debt (19%), the more affluent investors have greater concerns about managing volatility (28% HNW and 22% Ultra HNW) and transferring wealth to heirs (13% HNW and 10% Ultra HNW).

Given their greater focus on protecting assets, more affluent investors are far more likely to have a proactive strategy against market risk (79% HNW and 76% Ultra HNW vs 57% All Investors). While investors at every level rely most commonly on diversification, liquid alternatives and fixed annuities to manage market risk, the Ultra HNW are far more likely to also use fixed index annuities (39% vs 11% HNW and 22% All Investors), market-linked CDs (37% vs 16% HNW and 20% All Investors), and smart beta ETFs (31% vs. 6% HNW and 7% All Investors).

Lawmakers at home and abroad continue to dominate the headlines—and remain top of mind for more affluent investors. Asked which macro factors will most adversely impact their portfolios in 2018, the HNW are far more likely to say that gridlock in Washington (26%) and global instability (25%) are the top two concerns, while the Ultra HNW say that taxes (21%) and rising interest rates (21%) are tied for number-one.

This year’s study also shows that a focus on tax planning and tax-efficient investing could help build more wealth for more affluent clients—and drive more growth for RIAs and fee-based advisors. The Ultra HNW are far more likely to say that they will benefit from tax reform (74% Ultra HNW vs 56% HNW and 56% All Investors). Likewise they are far more likely to say that tax reform will increase the likelihood that they will work with an advisor over the next 12 months (47% Ultra HNW vs 22% HNW and 28% All Investors).

[i] Capgemini World Wealth Report 2018, https://www.worldwealthreport.com/

To learn more about the unique needs of these more affluent investors, financial professionals can download the Advisor Authority 2018 Special Report, “Winning the High Net Worth: Unlock Greater Growth Serving More Affluent Investors.”

http://know.nationwideadvisory.com/AdvisorAuthority2018

For additional insights on more affluent investors, financial professionals can also download the latest Advisor Authority 2018 infographic at:

http://know.nationwideadvisory.com/2018AdvisorAuthority/Ch3/Infogram 

The fourth annual Advisor Authority study explores the investing and advising issues confronting RIAs, fee-based advisors and investors—and the innovative techniques that they need to succeed in today’s complex market. It features a special focus on the most successful advisors and the most affluent investors. This is the third in a series of ongoing Special Reports that will be released through first quarter 2019.

About Advisor Authority: Methodology

The fourth annual Advisory Authority Survey was conducted online within the United States by The Harris Poll on behalf of Nationwide Advisory Solutions from January 3 – February 21, 2018 among 972 financial advisors and 827 investors, ages 18+. Among the 972 financial advisors, there were 508 Registered Investment Advisors and 464 Broker/Dealers. Included in this group of financial advisors is a new segment of 212 Wirehouse Broker/Dealers that is excluded from trended data to allow for year-over-year comparisons. Among the 827 investors, there were 208 Mass Affluent, 206 Emerging High Net Worth, 208 High Net Worth and 205 Ultra High Net Worth. Results of this new research are compared to results from a similar 2017 and 2016 study conducted online by The Harris Poll on behalf of Nationwide Advisory Solutions. Detailed methodologies from these studies are available upon request.

Investors are weighted where necessary by age by gender, race/ethnicity, region, education, income, marital status, household size, investable assets and propensity to be online to bring them in line with their actual proportions in the population.

About The Harris Poll

The Harris Poll is one of the longest running surveys in the U.S. tracking public opinion, motivations and social sentiment since 1963 that is now part of Harris Insights & Analytics, a global consulting and market research firm that delivers social intelligence for transformational times. We work with clients in three primary areas; building twenty-first-century corporate reputation, crafting brand strategy and performance tracking, and earning organic media through public relations research. Our mission is to provide insights and advisory to help leaders make the best decisions possible. To learn more, please visit www.theharrispoll.com.

Expanding the category of insurance products expressly designed for RIAs and fee-based advisors marks another key integration milestone for Nationwide Advisory Solutions and its Fortune 100 parent. The company formerly known as Jefferson National, creator of Monument Advisor, the industry’s first[i] Flat-Fee[ii] Investment-Only Variable Annuity (IOVA), was acquired last year by Nationwide, one of the largest providers of insurance and financial services products in the U.S.

“The ‘Retirement Income Challenge’ is real and growing, as 10,000 Boomers a day leave the workforce to begin a retirement that can last two decades or more. As lifespans increase and the safety net erodes, many say that their number-one concern is outliving their savings,” said Craig Hawley, head of Nationwide Advisory Solutions. “Our new SPIA helps expand insurance opportunities for RIAs and fee-based advisors, and helps them solve the retirement income challenge for their clients. While more companies claim to offer insurance for the independent fee-based channel, none has our expertise and proven track record of designing insurance products from the ground up to meet the unique needs of RIAs and fee-based advisors.”

Nationwide Advisory Income is designed to fit the way RIAs and fee-based advisors work, with simplicity, transparency, no commission, lower costs, fee-deduction capabilities—and will soon be rolling out direct data feeds into the advisor’s workstation. Nationwide Advisory Solutions’ award-winning advisor experience is built using advanced analytics and artificial intelligence and is based on more than a decade of expertise in meeting the unique needs of RIAs and fee-based advisors. Seamless integration into the independent advisor’s existing technology platform will streamline and simplify the often complex process of managing insurance products alongside clients’ other tax-deferred vehicles and taxable accounts. For RIAs who don’t hold an insurance license, Nationwide Advisory Solutions recognizes the importance of helping these advisors enhance their client relationship by providing a licensed insurance agent service direct to the advisor at no additional cost.

Numerous studies show that outliving their savings is among retirees’ major concerns, and nearly two-thirds of RIAs and fee-based advisors (64%) say that their clients today are more likely to seek guaranteed retirement income, according to a recent survey. Nationwide Advisory Income will offer capabilities to seamlessly integrate guaranteed income into the client’s portfolio for a more holistic and comprehensive approach to financial planning.

This new SPIA designed for RIAs and fee-based advisors can serve as a part of a multipronged solution that can include Monument Advisor[iii] to maximize tax-deferred accumulation and Nationwide Advisory Income[iv] to turn on a guaranteed income stream. With a portion of assets allocated to Nationwide Advisory Income, advisors can help clients cover essential expenses—independent of the market’s impact—and keep a portion of assets invested more aggressively for greater growth potential. Nationwide Advisory Income can also help supplement and maximize Social Security, help clients in some states with Medicaid planning, provide inflation protection through an optional Cost of Living Adjustment and an optional Liquidity Feature allows for a lump sum withdrawal in case of emergency.[v]

[i] Mogel, Gary S. (2005, June 6), Flat-fee variable annuity makes its debut. Investment News. Retrieved from http://www.investmentnews.com/article/20050606/SUB/506060708

[ii] Jefferson National’s Monument Advisor has a $20 monthly flat insurance fee. Additional low-cost fund platform fees ranging from .10% - .35% will be assessed for investors wishing to purchase shares of low-cost funds. See the prospectus for details.

[iii] Monument Advisor is issued in all states, except NY, by Jefferson National Life Insurance Company (Louisville, KY). In New York, Monument Advisor is issued by Jefferson National Life Insurance Company of New York (New York, NY).

[iv] Nationwide Advisory Income is issued by Nationwide Life Insurance Company, Columbus, Ohio.

[v] $50 will be deducted from the remaining Liquidity value or lump-sum withdrawals for each withdrawal taken

Nearly three-quarters of RIAs and fee-based advisors (74%) say investors today are more likely to work with a financial advisor than they were prior to the crisis. Advisors say investors are also more likely to listen to an advisor’s guidance (90%), more transparent about their financial situation (89%) and more willing to create and stick to a financial plan (84%). Investors are also more likely to ask about advice that is in their best interest or aligned with a fiduciary standard, according to 60 percent of advisors.

“Even a decade after the 2008 financial crisis, the most significant market downturn since the Great Depression has had a lasting impact on investors’ concerns about minimizing risk and protecting their assets, as well as their desire for guaranteed income in retirement,” said Craig Hawley, Head of Nationwide Advisory Solutions.

RIAs and fee-based advisors say investors today are more concerned about a future downturn (84%), more concerned about market volatility (79%) and more risk averse (67%). They are also more likely to focus on product costs (56%) and to ask about how advisors are compensated for their advice (51%), according to the advisors surveyed.

For their part, more than three-quarters (79%) of RIAs and fee-based advisors have increased their proactive communication with clients about market conditions while 60 percent have become more proactive about communicating their compensation model. The majority (57%) of advisors also increased their focus on an independent fee-based approach to managing their practice and serving their clients.

“RIAs and fee-based advisors have adapted to the needs of the post-financial crisis investor by adopting a more holistic approach, aligning the products and tools they leverage to meet investors’ concerns and proactively communicating about market risk and movement,” explained Hawley.

According to the poll results, following the financial crisis nearly 73 percent of RIAs and fee-based advisors increased their focus on holistic financial planning for clients. Advisors say clients are more likely today than they were prior to 2008 to seek guaranteed retirement income (64%) and guaranteed downside protection (62%), to hedge against market risks. As a result, RIAs and fee-based advisors have increased their use of specific investment products in order to meet investors’ retirement income goals, including 56 percent increasing their use of dividend-yielding stocks, 41 percent increasing their use of yield-generating ETFs and 37 percent increasing their use of variable annuities with guaranteed living benefits. To hedge against market risk, RIAs and fee-based advisors say the top three products which they are using more since 2008 include liquid alternatives (45%), fixed index annuities (FIAs) (43%) and fixed annuities (31%).

While RIAs and fee-based advisors agree investors today in general are better prepared for future downturn than they were prior to 2008, a plurality (28%) see Baby Boomers as best-prepared to handle a downturn. As they seek to prepare investors to handle future down markets, advisors are prioritizing educating clients about market cycles (63%), focusing on holistic financial planning (57%), and adding annuities to provide both guaranteed income (28%) and guaranteed downside protection (28%).

“Serving RIAs and fee-based advisors for more than a decade, we understand the many challenges they face as change continues at an unprecedented rate, driven by the power of consumer demand, advances in technology, the expanding digital economy and regulatory reform. The race is on—and there is no turning back,” said Craig Hawley, Head of Nationwide Advisory Solutions. “The most successful RIAs and fee-based advisors, who earn more and manage more AUM, are already a step ahead by putting clients first with a fiduciary standard and more holistic planning, and they further differentiate themselves by harnessing prevailing trends—from artificial intelligence to demographic shifts to industry consolidation—to create their own unique competitive advantage. To keep pace, all advisors must adapt, or be left behind.”

This new Advisor Authority Special Report, “Path to Success: Adapt—or Be Left Behind,” defines successful advisors as those who earn a personal annual income of $500,000 or more from their advisory business, or individually manage a total AUM of $250 million or more. By studying the way these top performers adapt to change and leverage their strengths, advisors can define and ruthlessly refine their own path to success in an increasingly competitive industry. From among the ten traits of successful advisors which can be found in this new Special Report, RIAs and fee-based advisors can start to create their own competitive advantage by considering these five:

BE A TECH INNOVATOR: One factor which sets successful advisors apart from all other advisors is their focus on technology. Successful advisors rate adding new technology the second most important factor for driving profitability over the next 12 months, while all other advisors rate it fourth. They also rate integrating technology the second most important practice management priority over the next 12 months, while all other advisors rate it fifth.

HARNESS THE COMPETITIVE EDGE OF ARTIFICIAL INTELLIGENCE (AI): Among advisors who are at least somewhat familiar with AI, successful advisors, as compared to all other advisors, are far more optimistic about AI’s impact on financial planning (68% vs 54%), far more likely to use AI in their practice (49% vs 30%), and far more likely to add AI or add more AI in the next 12 months (65% vs 47%). They use AI to transform every aspect of the customer experience, from the front-end to the back office, opening the door to a new category of client, offering a new universe of products and solutions—and ultimately gaining an edge over the competition.

PUT CLIENTS FIRST: Successful advisors know that putting clients first is the foundation for a thriving practice. It all begins with a fiduciary standard. Successful advisors, as compared to all other advisors, are far more likely to strongly agree that there should be one federal fiduciary standard across the financial industry (53% vs 35%). By aligning with their clients’ best interest, successful advisors earn their trust, deepen the advisor/investor relationship—and bring more assets under management.

TARGET AN EMERGING MARKET OF NEW CLIENTS: Year-over-year, the pursuit of profitability is a top priority—and the push for new clients remains a top driver of profits for successful advisors. Many experts say successful advisors take the extra measure to define their ideal client—identifying who they are, what they do and their top concerns—to customize their practice and specialize their services to meet clients’ most important needs.

BE A MARKETING INNOVATOR The most successful advisors are far more likely than all other advisors to change their marketing strategies to attract the next generation of investors (69% vs 60%). This year, successful advisors say increased use of mobile technology is their top solution to attract the next generation of investors (33%), followed by increased use of social media (30%) and working more with a client's family and children (28%), to build a foundation for the future.

To learn more about all ten traits of highly successful advisors, financial professionals can download the Advisor Authority 2018 Special Report, “Path to Success: Adapt—or Be Left Behind”: http://know.nationwideadvisory.com/2018AdvisorAuthority/Ch2/Report

For more insights on the top traits of successful advisors, financial professionals can also download the latest Advisor Authority 2018 infographic at: http://know.nationwideadvisory.com/2018AdvisorAuthority/Ch2/Infogram

The fourth annual Advisor Authority study explores the investing and advising issues confronting RIAs, fee-based advisors and investors—and the innovative techniques that they need to succeed in today’s complex market. It features a special focus on the most successful advisors and the most affluent investors. These latest findings are to be followed by a series of ongoing reports that will be released through year-end 2018.

“As 10,000 Boomers a day enter retirement over the next two decades, advisors understand that adding more tax-deferral is vital for helping clients confront two of their most urgent needs—saving enough for retirement and making it last a lifetime,” said Craig Hawley, Head of Nationwide Advisory Solutions. “To help RIAs and fee-based advisors maximize the power of tax deferral, our flat-fee investment-Only VA can outperform taxable accounts and traditional high-cost VAs. And to help them prove the true power of low-cost tax deferral to their clients, we created a more customizable and robust online calculator.”

With more robust results, now backed by 250 randomized Monte Carlo simulations using historical market data[i], RIAs and fee-based advisors can use this new calculator to compare investments in a taxable account and in a tax-deferred Investment-Only Variable Annuity (IOVA). These findings reveal scenarios where tax deferral’s power may help clients outperform a taxable account, to increase returns by an average 100 bps without increasing risk[ii], to potentially accumulate more retirement savings, generate more retirement income and leave a larger legacy.

Re-designed in response to advisor feedback, the highly customizable interface can be tailored to each individual client’s unique needs and used to generate personalized client-approved proposals. Important features to meet advisor demands and client needs include:

Updated and Adjustable Tax Rates: Updated to incorporate recently passed tax reforms. Federal income tax, long term capital gains and state tax can be adjusted to reflect clients’ current tax rates during the accumulation phase, as well as to reflect future tax rates during the distribution phase.

Customizable Inflation Rate: Set to a default of 2.6% (25-year average U.S. inflation rate), this feature can be customized for more specific inflation-adjusted returns.

Customizable Portfolios: Advisors and their clients can choose among five pre-set model portfolios—from conservative to aggressive—or create unique portfolio allocations using 5 categories of Equities, 8 categories of Fixed Income and 7 categories of Real Assets and Liquid Alternatives.

Nationwide Advisory Solutions’ online platform fits the way RIAs and fee-based advisors work. It can integrate directly into advisors’ workstations through direct data feeds with custodians, portfolio management systems, account aggregation platforms and data services used by more than 95% of RIAs and fee-based advisors. In addition to the new Tax Deferral Calculator, the online platform includes a Non-Qualified Stretch Calculator, an Annuity Comparison Calculator, an Advisor Dashboard to create new proposals, emails and alerts, as well as a highly rated account management and trading platform.

[i] Calculation Explanation and Limitations

The calculator shows the results of 250 simulated paths based on historical returns and tax costs of asset classes. Past performance does not guarantee future results. Your actual performance, asset allocation or trading patterns may differ from any of the simulated values assumed by the calculator, resulting in a different outcome from the multiple outcomes shown.

IMPORTANT: The projections or other information generated by this calculator regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results.

[ii] Taxes and Investment Performance, Morningstar, 2013.

“When selecting new funds to add to our lineup, the advisor is always top-of-mind. Our goal is to help advisors control what they can—taking a holistic approach to planning, keeping costs low, and investing for greater tax-efficiency,” said Craig Hawley, Head of Nationwide Advisory Solutions. “With greater transparency, Flat-Fee pricing and the industry’s largest lineup of underlying funds, Monument Advisor is an Investment-Only VA that is tailor-made to help meet the tax-advantaged investing needs of RIAs, fee-based advisors and the clients they serve.”

To round out their suite of offerings from top manager American Funds, Nationwide Advisory Solutions now offers six new investment options, bringing the total to eighteen. The new additions from American Funds include, Capital Income Builder, Global Growth and Income Fund, Global Growth Fund, U.S. Government/AAA-Rated Securities Fund, International Growth and Income Fund, and Global Small Cap. Many RIAs and fee-based advisors prefer to build American Fund-only models, and by rounding out the suite with these additions, it greatly enhances their abilities to manage American Fund-centric portfolios. Nationwide Advisory Solutions also has relationships with many Third Party Investment Advisors that utilize the American Funds modeling.

Nationwide Advisory Solutions has also added Nationwide’s NVIT Nationwide Fund. The fund changed subadvisers in November 2017 to AQR Capital Management. The fund strategy utilizes a defensive large cap equity style. AQR is known for their alternative investment strategies and has a solid reputation within the Asset Management industry, including recognition in 2016 as “Smart Beta Manager of the Year” in the Financial News’ Excellence in Asset Management Awards and in the Institutional Investor European Awards.

In addition, Nationwide Advisory Solutions now offers RIAs and fee-based advisors two funds from MFS investment Management, MFS Value and MFS Growth. MFS has nearly a century of active management experience, and Barron's has named MFS among the "Best Mutual Fund Families,” based on its active risk management approach and investment results, for eight consecutive years from 2008 through 2016.

[i] Mogel, Gary S. (2005, June 6), Flat-fee variable annuity makes its debut. Investment News. Retrieved from http://www.investmentnews.com/article/20050606/SUB/506060708

[ii] Jefferson National’s Monument Advisor has a $20 monthly flat insurance fee. Additional low-cost fund platform fees ranging from .10% - .35% will be assessed for investors wishing to purchase shares of low-cost funds. See the prospectus for details. Certain low-cost funds may only be available to you if you retain certain investment advisors.

[iii] Morningstar Data as of 12/31/16.

[iv] Morningstar Data as of 12/31/16.

An investor should carefully consider the investment objectives, risks, charges and expenses of the investment before investing or sending money. For a prospectus and underlying fund prospectuses containing this and additional information, please contact your financial professional. Read it carefully before investing. The summary of product features is not intended to be all-inclusive. Restrictions may apply. The contracts have exclusions and limitations, and may not be available in all states or at all times.

Variable annuities are investments subject to market fluctuation and risk, including possible loss of principal. Your units, when you make a withdrawal or surrender, may be worth more or less than your original investment.

Variable annuities are long-term investments to help you meet retirement and other long-range goals. Withdrawals of tax-deferred accumulations are subject to ordinary income tax. Withdrawals made prior to age 59½ may incur a 10% IRS tax penalty. Jefferson National does not offer tax advice. Annuities are not deposits or obligations of, or guaranteed by any bank, nor are they FDIC insured.

Monument Advisor is issued in all states, except NY, by Jefferson National Life Insurance Company (Louisville, KY). In New York, Monument Advisor is issued by Jefferson National Life Insurance Company of New York (New York, NY). The general distributor is Jefferson National Securities Corporation, FINRA member. Policy Series JNL-2300-1, JNL2300-2, JNL-2300-3, JNL-2300-1-NY, JNL-2300-2-NY. All companies are affiliates of Nationwide Life Insurance Company.

Jefferson National Life Insurance Company | Jefferson National Life Insurance Company of New York

“Once the exclusive domain of large institutions with deep pockets, and more recently utilized by consumer giants such as Amazon and Apple to ensure ease-of-use and customer satisfaction, RIAs and fee-based advisors are now adopting Artificial Intelligence to enhance the human connection with clients—and gain an edge over the competition,” said Craig Hawley, Head of Nationwide Advisory Solutions. “Just as we are using Artificial Intelligence and advanced analytics to put the advisor at the center of everything we do, our latest research shows that RIAs and fee-based advisors are leveraging AI to understand clients, predict their priorities and provide personalized holistic planning—proving that putting clients first is the best way to drive greater growth and profitability.”

“The Rise of AI: Harness the Benefits of Artificial Intelligence,” presents a 360-degree view—why Artificial Intelligence matters to advisors, what can be learned from the early adopters of AI, what’s most important to investors, and where these groups align—based on the responses of more than 1,700 financial advisors and individual investors. It also provides actionable insights from experts in the field on using AI to create a competitive advantage and build a foundation for future growth. It concludes that Artificial Intelligence can enhance human advice—but is not likely to replace it—as investors continue to place a premium on trust, face-to-face communication and a personal one-on-one relationship. Other key insights from this special report include:

Adoption Low—But Poised to Grow

Artificial Intelligence uses advances in machine learning, including refined algorithms, predictive analytics, natural language processing, speech recognition and image recognition to assess big data from disparate sources, evaluate complex problems and help advisors make more accurate decisions. While adoption of AI is low, with only one-third of the advisors who are at least somewhat familiar with AI (33%) in this study currently using Artificial Intelligence, more than half of RIAs and fee-based advisors who are at least somewhat familiar with AI (51%) plan to integrate or expand the use of Artificial Intelligence in their practice over next 12 months.

Profiling the Early Adopter of AI

Meanwhile, among the early adopters, nearly 9 in 10 (88%) have added AI into their practice in past 12 months—and over 8 in 10 (84%) plan to add more over next 12 months. These early adopters, when compared to RIAs and fee-based advisors, are far more likely to say their profitability will increase substantially in 2018 (37% vs 22%)—and more likely to say their financial outlook for 2018 is very optimistic (34% vs 26%). They are also more likely to be among the categories of High AUM Advisors who manage over $250 million (15% vs 11%), and High Earning Advisors with income of more than $500,000 (16% vs 11%).

Improving the Advisor/Investor Relationship

Among the investors, advisors, and early adopters who believe that Artificial Intelligence will improve the advisor/investor relationship, there is alignment. All three groups say that the top ways AI will improve this relationship include increasing accessibility and affordability of financial planning (46%, 42% and 40%), and making accurate predictions about clients’ future needs and behavior (39%, 38% and 38%).

Top Ways of Using AI

The top ways advisors plan to use Artificial Intelligence over the next twelve months are centered squarely on serving their clients. RIAs and fee-based advisors—and Early Adopters to an even greater degree—say this includes protecting clients’ assets against market risk (37% and 50%), improving their understanding of clients’ current needs and behaviors (35% and 48%), predicting clients’ future needs and behavior (33% and 41%), and using AI to provide more personalized, holistic financial planning (27% and 36%).

Bridging the AI Divide

This report also reveals advisors’ unique opportunity to help clients navigate the unknowns, understand the benefits and bridge the “AI Divide.” While two-thirds of RIAs and fee-based advisors (66%), and the vast majority of early adopters (89%) say integrating Artificial Intelligence with financial planning will improve the advisor/investor relationship, only four in ten investors (42%) agree. Likewise, only 42% of investors would describe their outlook on the impact of AI on financial planning as optimistic—and only 44% believe they will benefit from it.

Investor’s top three concerns about integrating AI with financial planning include cyber security risks associated with sharing personal and financial information (54%), privacy concerns about sharing personal and financial information (38%), and worries that AI gives technology too much autonomy (36%). Investors continue to say that face-to-face meetings are their preferred form of communication (37%) and regular in-person meetings are most effective for learning about their expectations (41%).

The fourth annual Advisor Authority study explores the investing and advising issues confronting RIAs, fee-based advisors and investors—and the innovative techniques that they need to succeed in today’s complex market. It features a special focus on the most successful advisors and the most affluent investors. These latest findings are to be followed by a series of ongoing reports that will be released through year-end 2018.

To download the Advisor Authority 2018 special report on “The Rise of AI: Harness the Benefits of Artificial Intelligence,” financial professionals can visit: http://know.nationwideadvisory.com/2018AdvisorAuthority/Ch1/Report

For more insights on the benefits of Artificial Intelligence, financial professionals can also download the latest Advisor Authority 2018 infographic at: http://know.nationwideadvisory.com/2018AdvisorAuthority/Ch1/Infogram

About Advisor Authority: Methodology

The fourth annual Advisory Authority Survey was conducted online within the United States by The Harris Poll on behalf of Nationwide Advisory Solutions from January 3 – February 21, 2018 among 972 financial advisors and 827 investors, ages 18+. Among the 972 financial advisors, there were 508 Registered Investment Advisors and 464 Broker/Dealers. Included in this group of financial advisors is a new segment of 212 Wirehouse Broker/Dealers that is excluded from trended data to allow for year-over-year comparisons. Among the 827 investors, there were 208 Mass Affluent, 206 Emerging High Net Worth, 208 High Net Worth and 205 Ultra High Net Worth. Results of this new research are compared to results from a similar 2017 and 2016 study conducted online by The Harris Poll on behalf of Nationwide Advisory Solutions. Detailed methodologies from these studies are available upon request.

Investors are weighted where necessary by age by gender, race/ethnicity, region, education, income, marital status, household size, investable assets and propensity to be online to bring them in line with their actual proportions in the population.

About The Harris Poll

The Harris Poll is one of the longest running surveys in the U.S. tracking public opinion, motivations and social sentiment since 1963 that is now part of Harris Insights & Analytics, a global consulting and market research firm that delivers social intelligence for transformational times. We work with clients in three primary areas; building twenty-first-century corporate reputation, crafting brand strategy and performance tracking, and earning organic media through public relations research. Our mission is to provide insights and advisory to help leaders make the best decisions possible. To learn more, please visit www.harrisinsights.com.

“The award-winning work of our team, using Artificial Intelligence, advanced analytics and cutting-edge technology to put the advisor at the center of everything we do, advances our mission of serving the unique needs of RIAs and fee-based advisors,” said Craig Hawley, Head of Nationwide Advisory Solutions. “By partnering side by side on the front lines and by providing this exceptional digital advisor experience, we can meet their demands for simplicity, transparency, more choice and greater value. As always, when our advisors speak—we listen.”

Nationwide Advisory Solutions won AIVA Communicator Awards of Distinction in the categories of “Integrated Campaign for Marketing Effectiveness” and “B2B Integrated Campaign” for its innovative approach to digital marketing. By leveraging an extensive technology stack that includes advanced analytics, Artificial Intelligence, predictive profiling and real time personalization, Nationwide Advisory Solutions can provide a unique one-to-one experience across multiple touchpoints for more than 5,000 RIAs and fee-based advisors it serves.

The integrated campaign featured educational content and actionable insights, based on Nationwide Advisory Solutions’ annual Advisor Authority study of more than 1,600 RIAs, fee-based advisors and individual investors, designed to help RIAs and fee-based advisors enhance their expertise, position their practice for greater growth and engineer their own path to success. Each chapter from this year-long integrated campaign was rolled out through multiple channels: trade press and national media, direct-to-advisor emails, direct mail, digital advertising and social media. Nearly 300 content pieces were created in total.

About The Communicator Awards

The Communicator Awards is the leading international awards program honoring creative excellence for marketing and communications professionals. Founded by passionate communications professionals overtwo decades ago, The Communicator Awards is an annual competition honoring the best digital, mobile, audio, video, and social content the industry has to offer. The Communicator Awards is widely recognized as one of the largest awards of its kind in the world.

Please visit www.communicatorawards.com for more information

“It is a true testament to the exceptional work of our team, and proves yet again our commitment to helping RIAs and fee-based advisors build their practice by sitting on the same side of the table as their clients, so they can accumulate more wealth and reach their financial goals,” said Craig Hawley, leader of Nationwide Advisory Solutions. “Our award-winning work, using Artificial Intelligence, advanced analytics and cutting-edge technology, helps us puts RIAs and fee-based advisors at the center of everything we do.”

Nationwide Advisory Solutions won a Hermes Platinum Award for its integrated marketing expertise. The company leverages a cutting-edge technology stack that includes advanced analytics, Artificial Intelligence, predictive profiling and real time personalization for the RIAs and fee-based advisors it serves, creating a one-on-one experience across multiple touchpoints—ultimately driving awareness of its mission and greater adoption of its solutions, to change industry perceptions and create a category leader.

Nationwide Advisory Solutions also won a Hermes Platinum Award for its Strategic PR/Communications Program. The company’s annual Advisor Authority study of more than 1,600 RIAs, fee-based advisors and individual investors is an innovative multi-channel program providing thought leadership, educational content and actionable insights—to help advisors enhance their expertise, position their practice for greater growth and engineer their own path to success.

About the Hermes Creative Awards

The Hermes Creative Awards is administered and judged by the Association of Marketing and Communication Professionals. Founded in 1995, The Association of Marketing and Communication Professionals (AMCP) administers and judges several international competitions for marketing and communication professionals including the Hermes Creative Awards, MarCom Awards and Ava Awards. These awards sets standards for excellence and recognize creative achievements.

“Joining forces with Nationwide has enhanced our growth potential in numerous ways, including our increased commitment to the economic strength of our city and our region,” said Craig Hawley, Head of Nationwide Advisory Solutions. “We are thrilled to expand our Louisville operations by providing these new opportunities for professional development and advancement with a Fortune 100 Company and a recognized financial services innovator, in a workplace that is growth-oriented and highly entrepreneurial.”

“Louisville Metro Government is committed to focusing on job creation by adding and retaining strong, dynamic companies, and Nationwide Advisory Solutions is a great example of success,” said Mayor Greg Fischer. “We congratulate them on their expansion and thank them for this multi-million dollar investment in our city’s workforce.”

The March 2017 acquisition of the local company, a recognized innovator of investing solutions for Registered Investment Advisors (RIAs), fee-based advisors and the clients they serve, further expands Nationwide’s ability to serve this rapidly growing channel of independent advisors with a greater variety of value-added products and services designed to meet their unique needs, and increases its ability to serve more advisors and customers in the various ways they prefer to do business.

Recruiting for many of the Louisville positions is already in progress and the company will renovate its state-of-the-art facility to accommodate the rapid growth of its workforce. Today’s announcement also builds on the local company’s momentum of its 5-year expansion plan that began in 2012, when it relocated its headquarters from New York to Louisville. In 2013, the company moved to its current facility, committing to create 40 new positions and doubling its office space with an initial investment of more than $2 million. This prior expansion plan generated $55 million in payroll, and a total of $60 million in greater economic development, over the 5-year period from 2012 to 2017.

“We have always believed that Louisville is the right location to attract and retain many of the associates we need, and this latest move is a clear vote in favor of our city’s high-quality local talent,” Hawley continued. “The city and the state have also been valued partners in supporting our growth, and a major factor in our success.”

In 2012, The Kentucky Economic Development Finance Authority provided tax incentives of up to $2 million for up to 10 years through the Kentucky Business Investment program. The performance-based incentives allowed the Company to keep a portion of its investment over the term of the agreement through corporate income tax credits and wage assessments by meeting job and investment targets.

“Market corrections can be a healthy part of a continued bull market, and our latest research shows that RIAs and fee-based advisors remain focused on the long-term—while taking action to protect their clients’ portfolios and preparing for opportunities to create more value,” said Craig Hawley, Head of Nationwide’s advisory solutions business. “Times like these prove the importance of holistic advice from unbiased advisors, who can ensure that clients don’t overreact to short-term market fluctuations, so they can stay the course and build more wealth.”

Key Findings from this latest survey include:

• More than three-fourths (83%) of RIAs and fee-based advisors said that their clients are concerned about a correction.
• The vast majority (87%) have prepared clients’ portfolios for a correction—with top three solutions including holding more cash (53%), buying more international stocks (24%), and using more liquid alternatives (24%).
• While focused on the importance of a long-term plan, RIAs and fee-based advisors say they will remain nimble in response to a market correction:
  • 45% would manage portfolios more actively versus passively
  • 45% would invest portfolios more aggressively versus conservatively
  • 59% would increase equity exposure
• Likewise, more than two-thirds (67%) say that now is a good time to invest in the market—with more than half (51%) saying stocks are appropriately valued, while more than one-third (36%) believe stocks are still overvalued.

Despite recent shifts in market values and volatility, the current Bull Market remains the second longest on record. Nearly two-thirds of advisors did not proactively change their investing strategy in response to the long-running Bull Market. Of the roughly one-third who did change their investing strategy, more than three-fourths managed portfolios more actively versus passively, and nearly two-thirds invested portfolios more conservatively versus aggressively.

“Being in their prime earning years and next in line for inheritance, Gen X is a vital segment for advisors to target in order to enhance profitability and set their firms up for future success,” said Craig Hawley, Head of Nationwide’s advisory solutions business. “And each year, successful advisors are most likely to say that Gen X will be their primary target over the next 12 months.”

According to this latest Special Report, “Moving the Needle: Targeting Generation X,” over half of Generation X investors (52%) say they do not have an advisor. And despite their growing wealth and their complex financial challenges, Gen X investors are the least likely to seek professional advice. There is a huge opportunity for RIAs and fee-based advisors to tap into this valuable client segment.

Attracting and Retaining Gen X Investors

Concern about saving enough for retirement (30%) is the number one reason, by a wide margin, that Gen X investors have an advisor. In comparison, all other generations, including younger Millennials, say that feeling confident in their financial future (27%) is the top reason for having a financial advisor. When choosing an advisor, Gen X investors say experience matters most (41%), with personalized advice for a holistic financial picture (26%) and a fee-based fiduciary standard (20%) also rated among the top three factors, year-over-year. Likewise, Gen X investors say face-to-face meetings far outrank all other forms of communication, and regular, in-person meetings are the most effective way for advisors to learn more about Gen X investors’ needs. To effectively attract and retain Gen X investors, advisors must align with their top priorities.

To learn more, financial professionals can download this latest Advisor Authority Special Report on “Moving the Needle: Targeting Generation X” by visiting:

http://www.jeffnat.com/advisorauthority/chapter4

For more insights on Generation X and other segments of investors, financial professionals can also download the latest Advisor Authority infographic at: http://learn.jeffnat.com/advisorauthority/chapter4-infogram

“Today’s Emerging HNW are poised for greater growth and on the path to becoming the future millionaires next door. Targeting this fast growing segment is essential for advisors to enhance profitability now and position their firms for the future,” said Craig Hawley, a leader of Nationwide’s advisory solutions business. “As we have seen year-over-year, RIAs and fee-based advisors in our study rate the pursuit of profitability as their single most important practice management issue—and the push for new clients like the Emerging HNW remains the top driver.”

The opportunity is substantial. With investable assets ranging from $500,000 to $1 million, the Emerging HNW represent roughly 12 million households—close to 10% of all households in the United States and growing.¹ Yet, more than one-third of the most affluent investors, including Emerging HNW (36%), HNW (37%) and Ultra HNW (37%), do not currently work with an advisor according to this latest Advisor Authority Special Report. “Moving the Needle: Targeting the Emerging High Net Worth” drills down into the top preferences and concerns of the Emerging HNW, as well as these other affluent investors, to help advisors meet their unique needs and compete effectively for these valuable client segments.

Top Priorities to Attract and Retain Emerging HNW

To effectively attract and retain the Emerging HNW and other affluent investors, advisors must align with their top priorities. When asked to name the single most important reason for having an advisor, the Emerging HNW and other more affluent investors say it is to feel more confident in their financial future. This is the number-one reason by a wide margin for the Emerging HNW (43%) and the HNW (48%). As investors’ wealth increases, so does the complexity of their financial life. The Ultra HNW also say their number-one reason for having an advisor is to feel more confident in their financial future (22%), followed by a focus on financial planning (15%), and because they do not feel confident to go at it alone (12%).

The Emerging HNW say the top three factors that influenced them to work with their advisor include advisor experience (54%), fee-based fiduciary standard (31%), and personalized advice for a holistic financial picture (22%). When targeting the Emerging HNW and other affluent investors, less experienced advisors should consider partnering with more experienced advisors within their firm and building multi-generational teams. Consistent with a fiduciary standard, all advisors should make greater transparency and greater choice a top priority. To provide more personalized and holistic planning, consider partnerships with specialists such as CPAs, Trust Attorneys and Estate Planners.

Address Top Concerns to Create Confidence

To help the Emerging HNW and other affluent investors feel more confident in their financial future, it is critical to address their top concerns. Advisors say that saving enough for retirement (39%) is their clients’ top concern over the next 12 months, but more affluent investors say their focus is distinctly different. When asked to name their top three financial concerns over the next 12 months, protecting assets was cited as number one by Emerging HNW (43%), HNW (41%) and Ultra HNW (40%). Cost of healthcare (30%, 40%, 22%, respectively) and taxes (24%, 32%, 29%, respectively) are also among their top three—and far outpace concerns over the next 12 months about saving enough for retirement (17%, 15%, 15%, respectively).

Many advisors say U.S. Fed Policy (32%) is the number-one trend impacting their approach to investing in 2017. But as lawmakers continue to dominate the headlines, the Emerging HNW say that Washington politics (34%) is the number-one trend that will impact their investing approach in 2017. Concerns about domestic economic performance (30%) is second, and U.S. Fed Policy (29%) third. While HNW and Ultra HNW also say Washington politics is the top trend impacting their investing approach in 2017 (36%, 30% respectively), both say that changes to the tax code rise to the number two spot (34%, 29% respectively). When advising more affluent clients, take note of these concerns and address their potential impact on portfolios.

To learn more, financial professionals can download this latest Advisor Authority 2017 Special Report on “Moving the Needle: Targeting the Emerging High Net Worth” by visiting:

http://www.jeffnat.com/advisorauthority/chapter3

For more insights on the Emerging HNW segment and other affluent investors, financial professionals can also download the latest Advisor Authority infographic at: http://learn.jeffnat.com/advisorauthority/chapter3-infogram

¹ Jesse Bricker, Lisa J. Dettling, Alice Henriques, et al., “Changes in U.S. Family Finances from 2013 to 2016: Evidence from the Survey of Consumer Finances,” Board of Governors of the Federal Reserve System, Vol 103, No 3, September 2017, https://www.federalreserve.gov/publications/files/scf17.pdf

“Among the many revelations from this year’s Advisor Authority study, we learned that the customer experience is truly the DNA of the advisor/investor relationship—the foundation for building a mutually beneficial partnership that allows investors and advisors to reach their most important financial goals,” said Mitchell H. Caplan, leader of Nationwide’s advisory solutions business. “By serving RIAs and fee-based advisors for more than a decade, we have seen first-hand how advisors achieve the greatest success when the customer experience puts clients first. To gain new clients and earn more of their business, putting the client first is not just a regulatory requirement, it’s a business necessity that is increasing in importance.”

Key to Advisors’ Value Proposition

More than 9 in 10 RIAs and fee-based advisors (94%)—including the most successful who earn more and manage more AUM—say that the customer experience is important to their value proposition. Advisors, including the most successful, most commonly say this is because customer experience improves client retention (27%) and improves the advisor/investor relationship (26%).

Advisors also say customer experience distinguishes their firm from their competitors’ firms (15%) and helps to attract prospective clients (9%). When asked if the customer experience will become more important for attracting and retaining clients in the next twelve months, more than 8 in 10 advisors (86%) agree. Adding new clients is consistently rated as advisors’ top driver of profitability (53% in 2017, 56% in 2016).

Trust Must Come First

To make the advisor/investor relationship work, trust must come first. When asked to select the single most important attribute in their relationship, trustworthiness is rated number one by both advisors (44%) and investors (35%). And communication is key— rated second by both advisors (11%) and investors (16%).

But in their relationship, investors want results—and look for the track-record to prove it. While advisors rate a proven track-record a distant fourth (8%), investors say it ties for second (16%). Proven track-record rates even higher among the High Net Worth (23%), and the Ultra HNW (21%) investors.

Key to Success: Quality Communication, One-on-One Relationships

To create a successful customer experience, advisors must be in sync with investors’ priorities. When asked to select the top factors that contribute to a successful customer experience, advisors and investors agree that quality of communication (39% and 36%) and a personal one-on-one relationship (44% and 35%) are among the top two.

To create a successful customer experience investors continue to suggest that technology is no replacement for the human touch—and nothing can replace face-to-face. In the age of instantaneous digital communications, investors and advisors still say face-to-face meetings are their preferred form of communication, rated number one by both advisors (36%) and investors (36%).

Attracting Clients: Experience, Holistic Planning and Fiduciary Standard Matter Most

When asked to name up to three factors that influence investors to work with an advisor, investors’ priorities are clear year-over-year. In both 2017 and 2016, advisor experience is the number-one factor by a wide margin (46% in both years), and personalized advice for a holistic financial picture is second (26% in both years). Serving clients using a fee-based fiduciary standard is a close third, at 25% in 2017 and 24% in 2016.

Guided advice gives investors greater confidence—and greater optimism. When investors are asked to identify the main reason they have an advisor, the number-one factor by a wide margin is to feel more confident in their financial future (30%). Given the pivotal role that advisors serve, it should be no surprise to learn that investors who work with an advisor are more optimistic about their financial outlook for 2017 (59%) than those who do not (40%)—and year-over-year their optimism has increased (59% vs. 47%).

To download the Advisor Authority 2017 special report on “Customer Experience: The DNA of the Advisor/Investor Relationship,” financial professionals can visit: http://www.jeffnat.com/advisorauthority/chapter1 

“The industry has been changing for years, as more advisors migrate toward a fee-based approach when providing advice, and as consumers desire more simplicity, transparency and choice in their financial products. It’s a powerful trend—and there’s no going back,” said Mitchell H. Caplan, leader of Nationwide’s advisory solutions business. “The new DOL Fiduciary Rule has been a catalyst for change across the industry and creates opportunity. As part of Nationwide, we are committed to ensuring the company can serve more advisors in the ways they prefer to do business.”

Investors Value Fiduciary

Year over year, Advisor Authority has shown that a fiduciary standard is consistently rated among the top three most important factors influencing an investor to work with an advisor. And as this year’s study shows, among investors currently working with an advisor, nearly half (48%) say they would stop working with their financial advisor if they learned the advisor is not required by law to serve their clients’ best interest.

But while the importance of a fiduciary standard is high among investors, awareness of the DOL Fiduciary Rule is low—at only 38%. And there are misperceptions. While the newly implemented Rule will require financial professionals to act as a fiduciary when advising clients on their retirement accounts, more than half of investors (59%) incorrectly believed that all financial advisors are already required by law to put their clients’ best interests first, including disclosing fees and conflicts of interest.

Fiduciary Standard Helps Advisors’ Drive Growth

The vast majority of advisors (84%) are aware of the DOL Fiduciary Rule. And like investors, advisors are bullish on the benefits of serving clients’ best interests. In this year’s study, more than eight in ten advisors (83%) agreed that a fiduciary model will benefit the growth of their practice, regardless of the status of the DOL Fiduciary Rule. Year over year, Advisor Authority’s findings show that just as a fiduciary standard is consistently rated a top driver influencing investors to work with an advisor, attracting new clients is consistently rated as advisors’ top driver of growth (53% in 2017, 56% in 2016).

Nationwide helps advisors serve a variety of client needs, whether working in a commission-based or fee-based model. The Nationwide Retirement Institute’s recently-launched DOL website provides resources for firms and advisors wrestling with the complexities of the fiduciary rule, such as identifying any new requirements as a fiduciary, taking a close look at the Best Interest Contract Exemption, understanding how the regulations may affect their business and how to address common client questions.

“Advisors and investors see political risks on the rise, and gridlock in Washington is the ‘new volatility,’ impacting the health of their portfolios, at the same time that it impacts everything from trade to regulations, healthcare and tax reform,” said Mitchell H. Caplan, leader of Nationwide’s advisory solutions business. “These days, politics are anything but usual, creating tremendous complexity—but also creating tremendous opportunities for expert financial advisors to create greater value. By putting clients’ best interest first with holistic advice, advisors can help manage the uncertain—and the unprecedented.”

Washington Impacts Investing

When asked to select the top three trends that will impact their approach to investing in 2017, RIAs and fee-based advisors are squarely focused on D.C., rating US Fed Policy first (32%) and regulatory changes second (29%), while Washington politics came in at a close third (28%). In last year’s study, RIAs and fee-based advisors cited ongoing volatility first at 34%, while this year volatility declined significantly to just 23%.

Meanwhile, individual investors also shared many of the same concerns about lawmakers’ impact on their approach to investing, rating Washington politics first (33%), US Fed Policy second (29%), while changes to tax code and domestic economic performance tied for third (24%).

Rising Concerns about Gridlock

When asked to select the top macro issue that will adversely impact their clients’ portfolio, RIAs and fee-based advisors rated global instability first (20%) and rising interest rates second (19%). Ongoing volatility declined significantly from the number one spot at 22% in 2016, to the number three spot at 16% in 2017. Gridlock in Washington spiked to the number four spot at 14% in 2017, from just 6% in 2016.

Meanwhile, when asked to select the top macro issue that will adversely impact their portfolio, individual investors said gridlock in Washington was first at 21%, a significant spike from just 9% in 2016. Global instability (21%) tied with gridlock for the number one issue, while taxes held steady year over year as the number two issue (17% in 2017 vs. 16% in 2016).

Tax reform is also top of mind for both advisors and investors, with advisors particularly optimistic about the impact on their clients. The vast majority of RIAs and fee-based advisors (85%) indicated that they believe the majority of their clients will benefit from the new administration’s proposed tax reform, while two thirds of individual investors (66%) believe that they will benefit.

The third annual Advisor Authority study explores the investing and advising issues confronting RIAs, fee-based advisors and investors—and the innovative techniques that they need to succeed in today’s volatile market. It features a special focus on the most successful advisors and the most affluent investors. These initial findings are to be followed by a series of reports that will be released from June through year-end.

The optional guaranteed Return of Premium Enhanced Death Benefit guarantees that assets intended to provide a legacy for an individual, foundation or philanthropy will be protected and passed along. Designed to fit the way RIAs and fee-based advisors do business, this new enhancement delivers strong consumer value, transparency and unique open architecture. Features include the flexibility to pull advisory fees — up to 2% in a contract year — without reducing the client’s benefit base. The enhancement guarantees the value of the premiums deposited into the contract, minus any adjusted partial withdrawals. This ensures clients’ legacies, and provides them with the comfort of knowing their beneficiaries or chosen charity will receive the money they intend. Also of note, advisors have access to the full range of nearly 380 underlying funds to manage any strategy they choose within Monument Advisor. (Refer to the prospectus for additional information).

Laurence Greenberg, leader of Nationwide’s advisory solutions business, stated, “Meeting the unique needs of RIAs and fee-based advisors has always been our singular focus and top priority. This new Return of Premium Enhanced Death Benefit offers RIAs and fee-based advisors the ability to protect client assets with the value and customer experience they expect. Combining forces with Nationwide has enabled us to take our commitment to an entirely new level, by offering new innovations and greater opportunities for growth. This enhancement is the first of many steps forward in our commitment to provide new products that are simple, low-cost, and transparent, with more choice—built expressly for RIAs and fee-based advisors.”

The optional guaranteed Return of Premium Enhanced Death Benefit, elected at the time a Monument Advisor contract is opened, guarantees the value of the premiums deposited into the contract, minus any adjusted partial withdrawals. Again, this ensures that clients’ heirs, families, foundations, or charity of choice will receive the legacy they intend. The ROP Enhanced Death Benefit is available as of May 1^st within the Monument Advisor Investment-Only Variable Annuity.

To help RIAs and fee-based advisors make the most of this latest enhancement to Monument Advisor, the company is offering a complimentary infographic at http://learn.jeffnat.com/ROPInfogram. Advisors can learn how to protect clients’ legacy with the Return of Premium Enhanced Death Benefit by contacting the Advisor Sales Team today at 866.667.0564.

“Research shows that taxes are a top concern for clients, and tax reform is top of mind. But with outcomes in Washington uncertain, and more turbulent markets expected, advisors should continue to focus on controlling what they can—taking a holistic approach to planning, keeping costs low, and investing for greater tax-efficiency,” said Laurence Greenberg, leader of Nationwide’s advisory solutions business. “With greater transparency, Flat-Fee pricing and the industry’s largest lineup of underlying funds, Monument Advisor is an Investment-Only VA that is tailor-made to help meet the tax-advantaged investing needs of RIAs, fee-based advisors and the clients they serve.”

One immediate benefit to Jefferson National operating as Nationwide’s advisory solutions business is it now offers a fund from award-winning MainStay Investments as of May 1, 2017. 5-Star Rated by Morningstar, MainStay VP Convertible is one of the only convertible-specific strategies in the VIT universe. In addition, the company now offers five new funds which are subadvised by recognized managers. This includes three new additions subadvised by Dimensional Fund Advisors: NVIT DFA Capital Appreciation, NVIT DFA Moderate, and NVIT Multi Manager International Value, which is subadvised by both DFA and JPMorgan. NVIT Multi Manager Mid Cap Value, 5-Star Rated by Morningstar in its category, is subadvised by American Century, Thompson, Siegel & Walmsley, and WEDGE Capital Management. Neuberger Berman NVIT Socially Responsible is now offered in a new share class with a lower expense ratio to further benefit advisors and their clients.

Jefferson National is now a wholly-owned subsidiary of Nationwide. The transaction increases each organization’s ability to serve more partners and members in the ways they prefer to do business. Jefferson National is transitioning to the Nationwide brand.

“We are all thrilled about joining forces and we welcome Jefferson National associates to the company,” noted Kirt Walker, Nationwide Financial president and chief operating officer. “This partnership allows for growth in ways that our companies couldn’t have achieved individually and complements our strong brokerage distribution channel.”

The current leadership will remain intact and the companies expect no changes to the sales and service experience.

“Our vision of building a distribution company that is singularly focused on the unique needs of RIAs and fee-based advisors has truly changed industry perceptions, created a new category of product, and provides a tremendous engine for growth going forward,” noted Mitchell H. Caplan, Jefferson National chief executive officer. “Nationwide has emphasized that they love what we do, and they want to learn from us and the way we do business with RIAs and fee-based advisors. Together, we’ll have an opportunity to leverage Nationwide’s financial strength and ratings, and offer a far greater range of value-added products and services along the way.”

The transaction was reviewed by state and federal regulators and required approvals were obtained. Deloitte Corporate Finance LLC and Eversheds Sutherland (US) LLP served as the financial and legal advisors for Nationwide in connection with the transaction. Raymond James & Associates and Sidley Austin LLP served as the financial and legal advisors for Jefferson National.

About Nationwide Advisory Solutions

Nationwide Advisory Solutions, formerly known as Jefferson National, is a recognized innovator with a mission to help RIAs and fee-based advisors build their practice by helping their clients to potentially accumulate more wealth and reach their financial goals. The company does this by developing and delivering value-added investment products, services and technologies that fit the fiduciary standard—wrapped in an industry-leading customer experience. To learn more, please visit www.nationwideadvisory.com

“Most RIAs and fee-based advisors are optimistic, but they are bracing for turbulent markets in the face of many unknowns, as Washington lawmakers address a range of key economic and political issues,” says Laurence Greenberg, President of Jefferson National. “While it may be difficult to predict outcomes in times of change, advisors and their clients can benefit by controlling what they can—taking a holistic approach to planning, keeping costs low, and investing for greater tax-efficiency. And as more advisors respond by using tactical management, proactively managing risk and adjusting portfolio allocations, tax-advantaged investing becomes increasingly important.”

More than 40% of RIAs and fee-based advisors surveyed have already adjusted clients’ portfolios in response to the new administration’s proposed policies. Of those who have made adjustments, 72% have invested more aggressively and 83% have invested more tactically. Likewise, more than three-fourths (78%) have adjusted holdings of sectors or securities that are expected to benefit under the new policies, and nearly two-thirds (61%) have adjusted the interest rate sensitivity of bond portfolios.

Tax reform is top of mind for advisors and clients. Advisors say that tax reform (63%) is the proposed policy which is most likely to cause them to adjust or plan to adjust clients’ portfolios. This is followed closely by deregulation (60%) and infrastructure investment (56%), while trade policy (42%) and immigration policy (11%) are less likely to have an impact. Likewise, tax reform is the proposed policy that clients want to discuss most often with respect to their portfolios. At 53%, tax reform is cited roughly twice as often as deregulation, infrastructure investment, trade policy and immigration. This aligns with the findings of Jefferson National’s most recent Advisor Authority study of more than 1,300 RIAs, fee-based advisors and individual investors nationwide, which cited taxes among investor’s top three financial concerns—and the number-one financial concern of Ultra-High Net Worth Investors.

To view more findings from Jefferson National’s Washington Impact Survey, financial professionals can download this infographic: http://learn.jeffnat.com/washington-impact