Being consultative is a quality that helps build customer loyalty and increases an advisor's ability to bond with a client and make important links between needs and solutions. Nearly three-quarters of elite practitioners and almost two-thirds of wealth managers are highly consultative, while less than 10% of investment consultants regularly act in a consultative fashion on behalf of their clients (Figure 4).
FIG 4
Being consultative at a minimum includes a cooperative orientation toward working with (not for) clients, clearly defined contact parameters that are driven by client needs and preferences and tailored communications that increase understanding and adoption.
Business Outlook
When it comes to the future of advice, advisors generally agree that there will need to be greater efforts from investment companies in the form of consistent performance, better products and support to secure their loyalty (Figure 6). Value-added wholesaling, a nascent part of the advisory world just a decade ago, is now the norm as asset management firms try to build stronger bridges between their internal sales force and their distributors.
Beyond their relationships with product sponsors, advisors have varying perspectives on the future, depending on their business model. Investment consultants expect more competition, more emphasis on specialization and a bigger role for the Internet. Wealth managers and elite practitioners envision a smaller and more skilled group of advisors, greater emphasis on the principles of wealth management and the multifamily office construct.
When asked about future concerns, most advisors agree that finding wealthier clients and forging relationships with professional referral sources top the list (Figure 7).
FIG 6 AND 7
Again, more differences emerge when the data is viewed by business model. Investment consultants express concern regarding asset growth, market volatility and improving client satisfaction. Wealth managers and elite practitioners demonstrate more confidence in the quality of their client relations, the recession-proof nature of their business models and their ability to compete effectively and secure the requisite resources.
The research discussed in this article was commissioned by Forbes in an effort to better understand the current disposition of the high-end advisory universe. Telephone surveys were conducted with 628 advisors about their business approach and mindset; their product platform and customer base; their marketing strategies and the opportunities left on the table; and, finally, their perspectives and concerns about their professional futures. The study was designed and overseen by Prince & Associates Inc. and the entire report is available at www.hsgrove.com.