How can advisory firms grow their business in an era of new technologies, new competitive threats and older client bases? The answers, of course, are varied, but two firms shared their insights during a panel discussion at the Financial Services Institute’s OneVoice conference Tuesday in Orlando.
Joseph Himelick, president of Himelick Financial Group in Austin, Texas, explained that his firm has grown by focusing on basic, non-sexy client needs that ingratiate it with their clients.
“When I think of profitability, I think in terms of the household,” he explained. “What has evolved is that the average household we do business with has more than five product relationships with us. That took constant, methodical efforts.”
Himelick said his firm has added value to clients in such areas as annuity-related products for retirement income, handling long-term care planning issues and emphasizing the importance of tax diversification with investments.
“These rudimentary things—the monotonous execution of the obvious—aren’t really edgy or sometimes not even pleasant to talk about but they’re necessary to be aware of to successfully diagnose a client’s situation,” Himelick said. “I actually believe that advisors literally walk away from more business than we walk into because the time we spend in generating new client relationships, if we could spend that same amount of time on existing clients, we would deepen the relationship not only by extending relationships, but by deepening the number of product and risk coverage elements we could do with existing clients.
“Basic fundamental planning and needs assessment generally hasn’t changed, and probably won’t much in the future,” he continued. “The issue is whether one has the discipline to implement that in their practice and the patience to do so with their clients.”
Matthew Reeves, senior vice president of advisory products and services at Waddell & Reed, offered a different take on successes with his company's financial advisors.
Founded in 1937 and based in Overland Park, Kansas, Waddell & Reed is one of the nation’s oldest mutual fund providers. Its product lineup includes the Waddell & Reed Advisors Funds and Ivy Funds, which combined have more than $100 billion in assets under management.
The company also has an advisor channel with roughly 1,900 financial advisors.
From the 1960s through 1998, financial planning conducted through Waddell & Reed’s advisors was done mostly as a value-added service, Reeves explained. In 1998, the firm transitioned from the value-added model to fee-based, comprehensive financial planning, which today encompasses a fair amount of the planning work done by Waddell & Reed advisors.