For many financial advisors, the start of a new year offers an opportunity to re-evaluate their goals and develop strategies to strengthen relationships with clients and improve their practices.
“People come to this time of year and just want to throw tactics against the wall,” says Julie Littlechild, chief executive officer at Absolute Engagement in Toronto. “Everybody has been to a conference or read an article ... and [says], ‘We’ll try that.’”
Some of these strategies will succeed, while others won’t, she adds. The key is to find what works.
Here are four tried-and-true tactics for advisors to consider as 2020 gets under way.
1. Obtain client feedback
One great strategy for advisors to grow organically is to start with their existing client base, Ms. Littlechild says.
“We encourage advisors to start the year with the client feedback process because it will uncover literally hundreds of conversations that they can have over the course of the year,” she says.
“Reach out to clients and ask, ‘Which of the following are you interested in learning more about?’ or ‘Which of the following topics resonate with you?’ Then, pick one or two themes and build out a more comprehensive campaign around those themes."
Getting clear about client needs helps unpack opportunities to strengthen the value advisors offer. Advisors can also use that information for their social media strategy, the topics of the workshops they hold, and other outreach tactics to attract new clients.
2. Don’t be afraid to try new tools
Kevin Cork, certified financial planner at the Absolute Group, which operates under the FundEx Investments Inc. banner in Calgary, credits technology tools with revolutionizing the client experience at his practice.
He uses applications such as:
- Microsoft OneNote, a digital note-taking application
- Sway, a presentation layout tool, also from Microsoft
- Podio, a project-management app to convey progress to clients
For example, OneNote allows him to pull up notes from past client meetings while Podio enables him to visually depict the steps clients have taken toward a goal, making large concepts feel much more concrete.
Mr. Cork also uses these tools for “mind mapping” and helping clients make financial decisions, such as investing in real estate, going on long vacations, or putting money into savings.
“Mind mapping software [is] a very powerful visual way to represent choices for clients … we can almost lay it all out like a board game in front of them and say, ‘Okay, if we go in this direction, then you can’t go in that direction,’” he says.
3. Go flat with your fee structure
George Hartman, president and CEO of advisor-focused consultancy Market Logics Inc. in Toronto, has seen many advisors rethink how they charge their clients in recent years.
Billing clients for a percentage of their investment asset – the dominant fee structure in the industry – puts advisors at a disadvantage during periods of market turmoil.
“In 2008 and 2009, when we had major stock market declines, advisors were scrambling, working long hours, holding clients’ hands, rearranging their portfolios and, in some cases, they weren’t getting paid at all or they were getting paid at a reduced rate,” he says.
Mr. Hartman suggests starting with a flat monthly fee that covers the cost of specific services – like a set number of meetings or phone calls. From there, advisors could charge additional fees for extra services provided. This payment structure is more transparent and makes things simpler for clients.
“It benefits clients because they know what the fee is. It doesn’t change as the asset levels change,” he says. “And if they request additional services, then it’s appropriate to pay for them – and they understand that.”
4. Lean into growing demographics
With Canada’s population continuing to age, Rob McClelland, founder of McClelland Financial Group and a senior financial planner and co-branch manager at Assante Capital Management Ltd. in Thornhill, Ont., says his team’s focus for the year ahead is serving retirees and their range of specific needs.
“What we’ve realized is that a big part of the marketplace right now is being underserved in the retirement area. There are a ton of baby boomers retiring."
According to Statistics Canada, seniors accounted for 17.5 per cent of Canada’s population on July 1, 2019, and this proportion is only expected to increase. By 2031, seniors are projected to make up 22.7 per cent of the national population. This growing demographic, with complex retirement and end-of-life planning needs, offers a significant opportunity for advisors.
Mr. McClelland says he and his team have started to become proactive about intergenerational wealth planning, encouraging clients to come in with their children when they review their financial and estate plans.
“The big advantage there is that if there are any issues, you can resolve them before something tragic happens, like someone passes away,” he says.