A perception gap exists between the services advisors think they are providing and the services clients think they are getting, according to industry consultants who spoke yesterday at the Preeminent Advisor Summit sponsored by Financial Advisor magazine.
That perception gap is one of the things that can prevent advisors and firms from realizing their goal of being the preeminent advisor in their community, they said.
According to research conducted by CEG Worldwide and the Spectrem Group, only 57% of clients with at least $1 million in investable assets think they are getting investment management from their advisor and only 45% think they are getting financial planning, George Walper, president of the Spectrem Group, told the audience of financial advisors.
The fact that the advisor is providing financial planning and that the client has a financial plan is something the advisor needs to emphasize every time he or she talks to the client, so that the client understands the services being provided, Walper said. Taking these kinds of data points from research and using them can help a firm become a preeminent firm in the eyes of the client. “The opportunities for advisors are out there,” Walper said.
“In the last year–and particularly right now–clients want a different kind of relationship with their advisors,” Walper said. “They want advisors to lead them, not just tell them what to do.”
At the same time, advisors should not lose sight of the fact that all affluent clients are not all alike, said John Bowen, founder and CEO of CEG Worldwide, a research and consulting firm.
“Unfortunately, clients cannot tell most advisors apart and we think they can,” Bowen said. “Clients want to work with an expert advisor,” so advisors have to set themselves apart as that expert.
Part of that differentiation process means stepping up as a leader, not someone who is just maintaining his or her business, said Chris Smith, founder of The Campfire Effect, who moderated the session. “You have to make sure you play to win” additional clients and make them the ultimate focus of the practice, he said.
Advisors need to demonstrate that they are skilled and knowledgeable regarding wealth management given that investors are aware that wealth management requires highly skilled professionals, the consultants said.
For the past decade, many advisory firms have only grown their businesses through increases in the market and have not actually grown in numbers of new clients or services provided, Bowen and Walper said. “To win in this business is to grow organically,” Walper said.