Postcard from the US


The lead into the FPA conference in San Antonio is the Major Firms Symposium and I find it an invaluable interaction to be able to spend a couple of days with executives from most of the leading financial planning groups in US.

A couple of points from the first days of the Symposium are set out below:

  • Paul Auslander FPA chair in his opening made it clear in his opening that one of the clear goals of the FPA in the US is to “elevate the profession to a level consumers are confident about.”
  • TD Ameritrade’s Skip Schweiss made the following points in his presentation: 
    – consumers wants are changing and this means for a number of industry participants business models may be at risk
    – ” human weakness is what causes every bubble or crisis” 
    – firms often think about revenue or AUM growth when focus should be on customer outcomes front of mind
    – consumers want advice that has a better grasp of their needs both emotional and intellectual.
  • Overall it is clear there is a stronger and growing focus on the consumer, which is very positive. The US group really seems to grab the idea that is really getting some strong attention in AMP at the moment, namely what is the client experience while they are going through the six step advice process. They showed a lot of interest in the client experience work being pursued at Hillross
  • There is an interesting initiative introduced at Cherry Creek mall in Denver where a Retirement store concept set up like an Apple store is being trialled – click here to see the website.

Some other trends/comments:

  • Larger firms are trying to centralise their planner supervision by having plans on a central server.
  • There appears to be a strong move to flat fees but I am not sure there is a strong enough view on making sure a planners customer value proposition is defined clearly enough.
  • Got a great quote on the planning process which traditionally has focused too much on investment return – quote is from Lennick Aberman group – ” planning is about helping clients prepare for their future, not predicting the future.”
  • As Major Firms progresses, it seems the concept of customer experience is resonating very well and promoting a bit of really progressive thinking for the group. This prompted a very good discussion about a behaviour approach to planning.
  • Advice IQ looks interesting. It is a service were an adviser can promote their practice to a wider audience. They promote that they can connect clients to planners and help promote their expertise. Click here to see their website.
  • Sungard kept the client theme going with a session titled creating positive experiences and showcased 3 tools they promote in working with planners – Mobile meeting, myRetirment and an integrated platform – click here to view these tools. 
  • The closing session of the Symposium was entitled Pursuing Practice Excellence presented by Jamie Green (Investment Adviser Group/AdvisorOne) and Spenser Segal (Actifi) who jointly conducted an extensive study (950 planners and 50 industry leaders) in relation to practice management.  They believe the study bridges a gap in information that is currently available. The findings of the study are: 
    – an opportunity exists because there is not one clear definition of Practice Management across the industry so an opportunity exists
    – planners indicated that their relationship based around with their firm/licensee is growing. Planner expectations to be assisted by their Licensee are increasing
    – planners rated sales and marketing, strategy,client service, operations/technology and business services rated highest of what planners require, they want a coaching relationship
    – planners want training and someone to assist in implementing improvements in their practice
    – planners are willing to spend money on sales and marketing but are prepared to put a lot of their time into client service
    – industry leaders see a strong practice management capability is critical to attracting and retaining planners. It is a major priority in the budget cycle.  But here is no formal ROI done to approve the practice management budget
    – less than 40% of planners take advantage of the practice management solutions on offer and it is clear there is stronger take up where the planners pays for the support
    – many of the solutions that would be valued by planners are simple basic education opportunities. One on one coaching was ranked higher by industry leaders than by advisers yet it was ranked by both as the most effective tool BUT it really only works well with motivated planners who are looking for improvement and changes. The magic happens at the executional level – to be able to deliver well and in good form to the planner
    – staff efficiency is a big opportunity for the larger revenue practice. Working with he am rather than he planner is the real opportunity
    – as you would expect, social media at this stage is more important with younger planners 
    – 41% of planners didn’t have a formal business plan! 54% DIY on practice management, 20% spend $10k or more a year on marketing. Strong focus on revenue but not enough focus on costs and efficiency at most planner practices.

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