Financial services firms are continuing to bolster their wealth-management support services as they look for ways to help their financial advisors strengthen their relationships with clients and grow their businesses in the process.
“Engagement is driven, in large part, by [having] a more holistic offering,” says Julie Littlechild, president of Advisor Impact Inc. in Toronto. “To the extent that support services are available, that reinforces the value of advice and the value-added above and beyond market performance.”
Although financial services firms are improving their efforts in offering specialized wealth-management support services, they still appear to be playing catch-up in their attempts to meet their advisors’ expectations. Across all the industry channels, advisors surveyed for Investment Executive’s 2012 Report Card series gave their firms relatively underwhelming performance ratings in areas such as “support for tax planning,” “support for wills and estate planning,” “support for developing a financial plan for clients,” “support for helping clients accumulate assets for retirement” and “support for helping clients plan for post-retirement income.”
The reason for this, says Dan Richards, CEO of Clientinsights in Toronto, is that “many firms are relatively new to the whole process of providing that higher level of sophistication around support services. There’s still a learning curve.”
In many ways, industry insiders say, the increasing demand for these services is being driven by clients, particularly baby boomers either approaching or entering retirement who may have a significant amount of assets and greater need for more sophisticated financial advice.
“As we age, life gets complicated from a financial perspective. And [getting help] to sort out those issues has tremendous value,” says Jon Wiltshire, senior vice president of marketing with Investors Group Inc. in Winnipeg, which received either the highest or second-highest ratings in seven wealth-management support service categories in this year’s Dealers’ Report Card.
To meet increasing demand, some firms have poured an increasing amount of resources into creating robust wealth-management service teams consisting of lawyers, accountants and other specialized professionals. In fact, Toronto-based Royal Bank of Canada (RBC) has built up a wealth-management support service team of 180 people, with 119 of those being client-facing professionals.
In comparison, the RBC team had consisted of 56 people five years ago, says Anthony Maiorino, vice president and head of wealth-management services with RBC’s wealth-management division. That division provides guidance and advice to advisors at both the brokerage and branch levels, providing clients with a seamless experience.
“Our biggest advantage is that we are cross-platform,” Maiorino says. “So, a client in, say, Calgary who is a client of the private bank as well as a client of our brokerage firm would be seeing the same [support services] professionals. We are able truly to integrate wealth planning for our clients.”
Maiorino believes the resources that RBC has put into building its support services team has contributed to RBC advisors’ ability to attract more business – something his team tracks.
“We’re able to look at things and see whether or not clients’ portfolios have increased after [the wealth-management team has] had an interaction with them,” he says. “So, one of the things we know for sure is that, on average, within 12 months of meeting our wealth-management professionals, the client share of wallet with RBC typically is up by 12%.”
Similarly, at Investors Group, Wiltshire believes there’s a connection between giving advisors the tools and support to help clients make sound financial planning decisions and strengthening the relationship between advisors and clients.
“We have done a lot of work quantifying the value of advice: ‘What does good advice mean?'” says Wiltshire. “It means getting people the right type of savings plan or keeping them invested when their impulse is to sell when the market is down.”
Across all industry channels, there’s more focus on providing both advisors and their clients with specialized services beyond basic financial and investment planning. For example, at both Toronto-based PPI Advisory and Calgary-based PPI Solutions Inc., the two managing general agencies that received the top ratings in the wealth-management support services categories in this year’s Insurance Advisors’ Report Card, insurance planning is the core strength around which other wealth-management services are delivered.
Although PPI Solutions has its own in-house support capabilities, it relies on sister organization PPI Advisory for more complex insurance needs, says Jim Virtue, president and CEO of PPI Solutions: “[PPI Advisory has] a planning service group with lawyers, accountants, actuaries, etc. And we can have access to that for the higher-end, more sophisticated cases.”
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