Until two years ago, Darrell Dobbie was focused on chasing returns for his financial planning clients. The advisor with Thamesford Accounting and Financial Services, based near London, Ont., took a course from Richmond Hill, Ont.-based Wealth Enhancement Academy Inc., that showed him the advantages of focusing on clients rather than transactions.

“Now, I spend far more time asking clients what their goals are,” he says, “as opposed to trying simply to invest their money.”

For years, industry consultants and coaches have been saying that the most successful advisors are those who have moved their practices toward a client-centric, advice-driven approach and away from a focus on product sales. Those advisors look at their clients’ entire financial picture and provide advice — including a financial plan — based on clients’ goals rather than simply selling investment products. And that is reflected in how the advisors are paid for their services. This is a shift in the industry advisors can’t afford to ignore.

“Almost every successful advisor has made the shift toward a more needs-based approach,” says Dan Richards, president of Strategic Imperatives Ltd. in Toronto.

The question is: just how far have advisors managed to take this shift? Although most advisors know a client-centric approach is preferable, they remain stuck in the product sales track.

Of course, moving to a client-focused approach from being transaction-focused can be challenging. Where do you begin? What steps do you take? How do you explain the change to clients? Advisors such as Dobbie have turned to coaches, consultants and courses to help them make the transition.

For several years, the Wealth Enhancement Academy has offered courses and coaching to advisors. Last year, it zeroed in on the transition to a client-focused practice, which company president John Page says is the most important move advisors can make.

The firm teamed up with software provider PlanPlus Inc. of Lindsay, Ont., to develop a program that would not only tell advisors what they have to do to improve their practices, says Page, but also how to apply those skills to their existing operations.

The new “advisor transition program” is closely integrated with PlanPlus’s personal financial planning software Web Advisor, which was developed as a step toward integrating investment and financial planning in an advisor’s practice.

The academy’s course, which won the Advisor Education Award at the 2007 Canadian Investment Awards held in Toronto in December, typically lasts about nine months. It covers all that is needed to make the change in business practices, says Page, from process and knowledge to tools and technology. It includes more than 30 modules, each addressing a specific advisory or practice-management issue.

Each week, each advisor works independently on an exercise, which changes weekly, and then participates in a group Web cast.

“There’s a sense of accountability,” Page says. “If you’re in with peers, it’s a little embarrassing to fall behind.”

In fact, participating advisors have to sign engagement agreements for the Web-based class. And to keep things manageable, class size is restricted to a maximum of 25 participants.

There is a financial commitment, as well. The cost of the program is $350 a month, which includes the PlanPlus software. At the end of one year, advisors must commit to another year of the PlanPlus software, at $100 a month. Individual coaching can be layered on top of the regular program, at a cost of $500 a month, starting in the third month of the course. The firm also plans to offer monthly or quarterly refresher courses for graduates.

Because the course emphasizes the client experience rather than technical knowledge, advisors at different knowledge levels can work together easily in the same class. “Somebody who is fairly new,” says Page, “can take this process and apply it at his or her level in the same way as someone who is very experienced.”

The Webcast component also means that advisors from across the country can compare notes. A recent class included advisors from Vancouver to Ottawa, for instance, as well as the head of the financial planning association in Britain. “It’s pretty cool that we can get a group of people like that together,” Page says.

The program will evolve, he adds, to include some of the ideas and concepts that advisors bring to the table.

@page_break@The goal of the course is for each advisor to build his or her personal transition plan. The ideal model would include at least two levels of service: one for clients who warrant premium service, for which they pay a fee; and one for those who remain in a transaction-based relationship.

The program outlines several fee models. While many advisors charge a fee based on assets, Page recommends advisors charge a separate fee based on the time and complexity required.

One of the requirements for taking the course is having an assistant or a plan to hire one in the near future.

So far, a few hundred advisors have gone through the program and, Page says, they are at various stages in their transition.

“We aren’t fully there yet,” says Dan Seabrooke, an advisor with Raymond James Ltd.-Seabrooke Financial in Peterborough, Ont. He took one of the course’s pilot programs less than two years ago and says his practice is gradually moving toward a fee model.

New clients are charged an hourly fee; a monthly automatic payment arrangement is more effective than an annual invoice, he says, because it underlines the fact that planning is an ongoing process.

Seabrooke gave current clients the choice to stick with traditional asset-management services or move to full financial planning. Out of about 600 clients, he says, 100 or so have a fee arrangement, and he’s hoping that will increase over time.

Although Seabrooke is happy to work with his clients in the way that makes the most sense for them, he has had to stand his ground a few times with clients who were accustomed to getting integrated financial advice free of charge.

“I had to make the decision and make it clear,” he says. One client, for example, had been offered a complicated buyout proposal from his employer and needed a financial plan in order to make an informed decision about his retirement. The client didn’t want to pay for the plan, but Seabrooke told him it was his only option if he wanted a clear picture of his financial status. To date, they’re at a standoff.

Dobbie, for his part, has already seen some financial benefit to his client-centred approach. Several of his clients were so impressed by the full financial plans he created for them that they decided to make him their sole planner, transferring assets to him from other financial professionals. “It was a pleasant surprise,” he says. “John [Page] explained how this would happen. But there’s nothing like first-hand experience to verify it.”

However, Dobbie admits, he still has a long way to go. He hasn’t yet broached the fee issue with his current roster of financial planning clients, although he does charge new clients fees. He plans to expand his fee menu as his expertise improves. “There are growing pains,” he says of the move from thinking mainly of commissions to creating full plans. But the academy’s program gave him the motivation he needed to make some changes, he says: “It’s a kick in the pants.”

Richards agrees that it’s a big change to move advisors’ mindset from “the meter is ticking” to a client-first approach. “It’s a bit of a leap of faith for advisors,” he says.

Some advisors are able to make the transition on their own, with some guidance from mentors or colleagues who have done it before them. Others do better taking a course or working with coach. But it’s rarely an overnight process. “It’s not like one day an advi-sor wakes up and makes the shift,” Richards says. Most test the waters with a few clients, make appropriate changes and evolve incrementally. “Frankly,” Richards adds, “that’s a more sensible way to do it.”

The tools necessary to make this transition are available. Page remembers taking 20 hours, using a pen and paper, to draw up a financial plan that would take 30 minutes using today’s software. And the tools are improving.

But tools and technology are not the stumbling blocks. “The problem,” he says, “has been the lack of determination and commitment on the part of advisors.”

A number of financial services firms, however, are emphasizing wealth management and pushing advisors in that direction. Toronto-based BMO Nesbitt Burns Inc. has developed several courses to help advisors make their businesses more client-centric. “The relationships are evolving away from ‘the person who bought my stocks’ into ‘trusted advisor’,” says Patrick French, vice president and managing director with Nesbitt in Toronto.

For the past four years, the firm has offered its Wealth Advisor 101 course to eligible advisors. By the end of this year, about 400 investment advisors will have taken the week-long course, which encourages them to broaden client relationships beyond asset management and into retirement planning, tax and estate planning, lifestyle protection and legacy planning. Although the course does not remove the need to incorporate the assistance of specialists, says French, it does allow advisors to take on the “connector” role for their clients.

Advisors who deal with clients who have assets of $3 million or more can take this process a step further with the WA201 course, which brings in more outside experts to help advisors understand some of the issues facing wealthy Canadians. Advisors who complete this program receive a designation, wealth management-services specialist for high net-worth clients, issued by the Knowledge Bureau Inc.

The upside to all this continuing education is that advisors who have taken the courses say they have improved relationships with clients, increased assets under management and boosted revenue streams. According to French, Nesbitt plans on launching a one-day course to help advisors who may not be eligible or interested in the more extensive 101 course.

Regardless of how an advisor chooses to make the transition to the big-picture approach to financial planning, Raymond James’s Seabrooke is convinced it’s the only way to ensure survival in an increasingly competitive industry.

“We’d better get with it,” he says of advisors. IE