Independent advisors have experienced only minimal defections of clients, and the vast majority of advisors believe the recession will be over by the end of 2009, according to a survey of independent advisors conducted after markets closed last Friday to cap off another tumultuous week.

The survey was conducted by Advisor Products during a free webinar series we are sponsoring to assist advisors with client communciations during the financial crisis. More than 200 advsors attended the webinar and 82% of attendees answered all of the question in the survey. If you’d like to attend  the “Crisis Communications” webinar series, please email me at agluck@advisorproducts.com. The sessions include no product pitches.Below are the questions and results of the survey.

Attendees are not experiening a panic by clients. Sixty-eight percent of the advisors who participated in our survey say that less than 25% of their clients have called them worried. Only 8% of the advisors polled said that between 50% and 75% of their clients called them worried about the events of recent weeks, and just 1% said that more than 75% of their client base had called them worried.  

Sixty-four pecent of the advisors polled believe the recession will not last beyond 2009, and that’s the good news. The bad news is that only 16% of advisors believe the recession will be shallow, while 46% believe the recession will be over by the end of 2009 but will be deep, and 28% believe the recession will be deep and continue into 2010. Despite the spate of troubling economic news about the shape of America’s financial institutions, just 2% of the advisors polled said they believe the recession would turn into a recession that will last at least three years.

Many advisors have been shaken by the market’s terrible turbulence, with 29% saying they feel guilty for not protecting their clients. 

Most of the advisors attending last Friday’s webinar are seasoned veterans, with 59% saying they have been in the profession more than 10 years.  

By a wide majority, advisors believe the financial crsiis is a marketing opportunity and plan to expand their marketing effort. Just 14% said they did not think the turmoil creates a marketing opportunity, while 86% said they view the economic crisis as an opportunity.

In my view, with Merrill Lynch and other big brokerage firms in disarray, it’s hard to understand how any indpendent advisor would not recognize the crisis as a great chance to gain clients. The myth that large firms were in a better position to offer investors advice has been shattered. Independent advisory firms that tell their story to investors now—via a website, newsletter, brochure, blog, wbeinars, and all other means—can take advantage of the ravaged financial condition and staff morale of the giant firms. Independent advisory firms should consider stepping up marketing by telling prospects about your independence, ability to be objective, and the absence of conflicts of interest arising from being linked to a corporate parent that manufactures products as well as the benefit clients derived from the fact that you are not affiliated with a research desk and investment banking department. My next column in Financial Advisor, which comes out in early November, will contain specifics about all this.  

The financial crisis is not a business crisis for indpendent advisors—at least not so far—with only 3% of advisors saying they were alarmed by a loss of clients recently. We’ll keep gauging  this periodically, but it does seem as though the worst is over. If the whipsaw markets of the last three weeks did not cause clients to fire their advisors, it’s difficult to imagine what will.

My guess is that brokers are not experiencing the same client loyalty that independent advisors enjoy and are much more susceptible to losing clients. That’s why advisors need to create marketing materials to respond to the opportunity and clearly articulate their value proposition versus brokers.  

Lending creedence to the notion that independent advisors are enjoying strong client loyalty, almost all advisors say their clients have been understanding and have not blamed them for losses recently suffered.