Advisor Boo-Boos

Not Delivering Meaningful Value-Added To Each Center Of Influence
Part of the formal action plan entails identifying and delivering real value to each individual center of influence. Delivering meaningful value to centers of influence goes way beyond being able to do a good job for their clients, as there are many financial advisors who can probably do a good job for their clients.

What’s therefore important is to be able to ascertain for each center of influence what value-added they most desire. However, only about a fifth of financial advisors are making the concerted effort required to determine what the centers of influence they’re focused on define as meaningful value-added (Figure 6).

Figure 6: Determined The Nature Of The Value-Added Desired By Each Center Of Influence
Yes     19.3%
No    80.7%
N = 549 financial advisors

Even among these comparatively few financial advisors who report determining the value-added appropriate for each center of influence, slightly more than a quarter are delivering the value-added (Figure 7). There are two main reasons for this. One is an inability to deliver what the centers of influence want. Second is just not doing so because of the resources required. Either way, the result is going to be very weak relationships with centers of influence, and thus few new clients.

Figure 7: Delivering Value-Added To The Relationship
Yes     26.4%
No    73.6%
N = 106 financial advisors

Value-added is the differentiator that regularly motivates a center of influence to open up his or her book of clients to a financial advisor. When financial advisors fail to understand and concentrate a portion of their efforts on determining and delivering value-added to centers of influence, it’s a misstep, and the train won’t derail because it won’t even be leaving the station.

Implication
While centers of influence are, for the most part, the most formidable way to source new clients, it’s evident that most financial advisors are not taking the proper steps to get significant results. The three missteps noted here can easily disrupt any efforts to motivate centers of influence to refer their clients.
What’s necessary to create a flood of new affluent clients is a systematic framework where the centers of influence are center stage. Moreover, for financial advisors to get significant results requires a lot of hard work.

Russ Alan Prince is president of R.A. Prince & Associates Inc. and Executive Director of Private Wealth magazine.

Brett Van Bortel is Director of Consulting Services for Invesco Consulting, the sales consulting group within Invesco Distributions Inc. The opinions expressed are those of Russ Alan Prince and Brett Van Bortel, and are based on current market conditions and subject to change without notice. These opinions may differ from those of other Invesco investment professionals.