CEG has successfully penetrated the independent channel and is in the process of expanding its services to both independent shops (RIAs) and Wall Street firms.

Entrepreneurial Fluke?

Circa 2003, CEG was positioned as something of a transaction-oriented business, in which financial advisors were to be charged a certain amount for research generated at least three times a year. It wasn't realizing its potential. "We were providing research by contacting advisors in the investment community, and we were generating valuable research," Bowen recalls. "But we came to see we could do much more. We were barely scratching the surface of what we could do for the advisor to help him or her achieve success."

According to Bowen, what CEG began to offer finally, and offers now, is a soup-to-nuts package that focuses on every area of the advisor's business and tracks, in detail, how a practice can become bigger and better-often by initially becoming smaller and more focused.

Each part of this process is backed by research that CEG has conducted with hundreds of top financial advisors, whose best practices are refined and synthesized into substantive white papers. The firm assigns consultants for the processes involved and includes monthly conference calls between the advisor and a designated consultant-trainer. Coaching material is currently in excess of 1,000 pages, between the tabbed notebooks that coaching clients receive and the course material prepared for presenters.

The reports are focused directly on financial advisors. Information is received directly from the advisors via questionnaires and phone calls. The reports also serve double duty in that they provide direct evidence of what the firms themselves need to do to improve productivity and retention.

Influential Study

A 2005 study, Winning the Allegiance of Top Financial Advisors, has been especially influential in this regard, Bowen explains. While research illustrated that advisors had little trouble identifying high-quality products and services, the real challenge they faced and were concerned about mastering was becoming more successful. CEG found that this latter concern could be broken down into the following points:

Finding wealthy clients. About 85% of advisors, especially independent advisors, were unsure how to move forward in attracting wealth clients.

Generating significant asset growth. While this is a concern for all advisors, brokers and registered investment advisors were more concerned than independent broker-dealer reps. Over 90% of brokers and RIAs identified gathering significant assets as a major concern.

The market going down or sideways. Almost 80% of all advisors and nearly 90% of brokers identified this as a concern. The reason for the latter's deep concern, as CEG's research shows, is that "advisors who are predominately transactional saw their incomes decrease by 51.8% during [a] 12-month study while those who use a wealth management [asset allocation] model enjoyed a gain of 9.3%."
The 2005 study also showed the top three kinds of support that advisors were soliciting from their institutional partners:

Marketing and sales support