“Great” service includes life planning

This research comes from the Financial Comfort Zone Study, an ongoing national consumer survey that Credo conducts in partnership with Montreal-based TC Media’s investment group. (TC Media publishes Investment Executive.)

Credo asked more than 7,500 Canadians who work with advisors to rate the value of the advice they receive as either “worth its weight in gold,” “good,” “fair” or “poor.”

Among survey participants, 21% rated the value of advice they receive as gold; 57% rated the value as good; 17% rated the value as fair; and 5% rated the value as poor.

Survey responses remained relatively consistent, even among the high net-worth segment of survey participants. For example, among Canadians with more than $500,000 in investible assets who work with an advisor at a bank-affiliated brokerage, 19% rated the value of advice they receive from their advisor as gold; 58% rated the value as good; 17% rated the value as fair; and 5% rated the value as poor.

Among Canadians with more than $500,000 in investible assets who work with an advisor at an independent firm, 20% rated the value as gold; 61% rated the value as good; 16% rated the value as fair; and 3% rated the value as poor.

Advisors are facing a variety of competitive pressures, including the emergence of low-cost advice options such as robo-advisors and the changing expectations of a better informed, more demanding client base, says Sam Febbraro, executive vice president, advisor services, with Investment Planning Counsel Inc. in Mississauga, Ont. Those realities are challenging advisors to differentiate themselves as trusted professionals who can go beyond portfolio-building and investment fund-picking to help clients navigate through life’s transitions.

“A good advisor provides financial planning – as he or she should,” Febbraro says. “But a great advisor provides life planning.”

Adds Sara Gilbert, founder of Montreal-based Strategist Business Development: “More and more advisors are embracing that philosophy of really being there for clients, beyond the money, in all the different aspects of their lives.”

Long-term relationships with clients are built not so much on investment returns – although performance certainly is important – but on whether clients feel that the advisor is accessible, communicative and responsive, Gilbert says.

“[Clients] can have only OK returns and find their advisor fantastic or have exactly the same returns and find the value of the advice they’re receiving poor,” Gilbert says. “Going above and beyond in showing that you care about something more than [the client’s] portfolio – that’s what really makes the difference.”

Clients facing key life transitions – such as a career change, a marriage or divorce, the birth of a child or the challenge of meeting the caregiving needs of an elderly parent – are looking for guidance, both financial and otherwise, Febbraro says. Advisors who can provide their clients with good counsel, he adds, either via in-house services or by leveraging a network of experts, can establish themselves as “the first call for their clients” when they’re experiencing these transitions.

Advisors can build “client intimacy” by understanding the particular life transitions that affect their client niches, says Larry Distillio, assistant vice president of practice management at Mackenzie Investments in Toronto. For example, an advisor who specializes in serving a client base of police officers will understand all the evolving needs and concerns of that particular group as they proceed through their lives and careers, then build the services and capabilities to address those needs.

“Many advisors would be amazed at how many of their best clients are not aware of everything [advisors] do and can do for [their clients],” Distillio says.

Advisors who speak to their clients proactively about the range of services the advisor offers will enhance the perceived value of those services in the minds of the clients, earn a greater share of clients’ wallets and transform their clients into advocates for the advisor, according to Distillio.

What also helps with maintaining long-term client relationships, Distillio says, is consulting with clients every year or so to ask them if and how their expectations have changed regarding the advisory services they’re receiving.

“Advisors would be naïve to think that their clients are not talking to the competition, talking to friends and colleagues, or paying attention to media reports [about advisors],” Distillio says. “Over time, a client’s expectations of an advisor can change based on that influence. Checking in on a periodic basis to ask about ways to do better by that client is a great idea. That’s a powerful question to ask, because we need to know the answer so we can give [clients] what they need.”