The launch of the Association of Financial advisors white paper looking at the consumer-advice relationship offers rare insights into where exactly financial planners need to target improvements to service. Brad Fox of the AFA talks to Wealth Professional about the key differences between average and high performance.
Video transcript below:
Stephanie Zillman, Wealth Professional
Stephanie Zillman: The launch of the AFA white paper looking at the consumer advice relationship offers rare insights into where exactly financial planners need to target improvements to service. Brad Fox of the AFA says the paper highlights the key differences between average and high performers with communication front and centre.
Brad Fox, Association of Financial Advisors (AFA)
Brad Fox: Communication is the key one. The biggest single driver of earnings per advisor in a practice was the frequency with which they communicate effectively with their client. So that when we see advisor practices communicating more than 10 times per year with their client, we are seeing a roundabout a 280% increase in profitability per advisor. I mean that’s massive performance difference between one business and another, simply because you communicate to your clients and I guess this gets to the heart of the engagement piece. For an advisor to be doing their job really well, they need to be in constant and frequent contact with their client. It’s common sense, it stands to reason. What the white paper does is quantify the difference that makes. It is an enormous difference. So for those advisors that aren’t in that frequency of contact, aren’t leveraging electronic means of communication, they are missing an opportunity.
Stephanie Zillman: But Fox says how advisors communicate is actually more important than the frequency of communication.
Brad Fox: So it’s getting that communication to speak to the client in a way that the client values, relates to, he can understand, it’s not 10 of the same communications a year, it needs to be a mixture of video, email, face to face, support staff in the business, it’s not even about that the advisor has to be the only person doing the communication to the client. It’s about the fact that the business is making that client feel valued, involved and engaged in their advice process.
Stephanie Zillman: The research also found that equally as important as the continuous feedback loop, is advisors following through on promises.
Brad Fox: We are very good at the romance stage of attracting a client, we don’t lead so well in the marriage sometimes. We are all starting to take things for granted, so when a client has a review, they want more than knowing the current level of insurance cover they have got and the current performance of their super or their investment or a balance statement or whatever it might be. They want much more than that. They want to know, how, what you have done for them in the last year or the last 6 months or the last whatever the period is, what have you have done there to help them achieve the goals and the strategy that was put in place at the beginning of the relationship. It’s about reviewing those goals and strategies. Are they still appropriate?
Stephanie Zillman: Beyond clear and effective communication, the client feedback also emphasized just how important the trust element really is in client advisor relationships.
Brad Fox: The things that stand out is you have to be authentic, you have to have a core set of values that you live by, you have to have a very clear set of beliefs and your client needs to understand what those things are. Because if you can invest in your client and share with them what you are trying to do with your business, what you are trying to do as an individual with your own career, your own development, they will feel trust from that. You are giving some of yourself to them. They will then in turn if they want to get the best out of an advice relationship, will share back with you the honesty about what they want out of life.
Stephanie Zillman: This is Stephanie Zillman reporting for Wealth Professional.