Advisers prefer continuing training programs, survey finds

More financial advisers would benefit from educational and business development programs if asset management firms offered programs more frequently and with more follow-up.

In fact, 82% of advisers said they preferred continuing programs, but most (78%) participated in programs that were one-time offerings, and 48% cited a lack of follow-up as a problem for them, according to a study conducted by Financial Research Corp. of Boston and Horsesmouth LLC, a New York-based financial research firm.

These so-called value-added programs focused on teaching advisers how they could increase referrals, improve their investment strategies and other business development issues.

Although 70% of the 1,800 advisers surveyed said that they had participated in at least one value-added program during the previous 12 months, there appeared to be gaps between what they wanted and what asset management firms provided to them.

For instance, 29% of respondents said they preferred programs delivered online, but just 6% of the programs were available online, and most participants attended programs offered through off-site seminars.

Independence is an area of great importance to advisers.

They prefer that an independent source deliver the training to ensure that it isn’t a product pitch, said Craig Kilgallen, a vice president at FRC and the author of the study.

Fully 39% said that independence was “highly important,” and 46% said that it was “important” that an independent or third-party source deliver the program. Nevertheless, 43% of the advisers reported participating in programs offered by the firm’s external wholesaler.

Advisers said that there is value to be gained from these programs, which are particularly helpful when the economy is struggling.

For instance, Horizon Advisors LLC in February began a program offered through AllianceBernstein LP of New York to develop client presentations and supporting materials about research, planning strategies and investment philosophy.

“We’ve been doing this work, but it hasn’t been as organized,” said Larry Maddox, president of the Houston-based advisory firm, which has $130 million in assets under management. “It’s a great time for independent advisers to be talking to existing clients as well as new clients given the turmoil in the financial market.”

Research about investing is useful, said Lou Stanasolovich, president and chief executive of Legend Financial Advisors Inc. of Pittsburgh, which has $360 million in assets under management.

“It helps us build better portfolios,” he said. “It helps us get better results, which ends up getting us more clients.”

Despite the survey results, which call for more online programs, many advisers prefer in-person education.

“When you have someone scheduled to come in and talk to you about it, it raises the ante,” Mr. Maddox said.

In-person meetings are the best delivery method, said Cary Carbonaro, president of Family Financial Research of Huntington Village, N.Y., which has $30 million in assets under management. “I don’t have time to check out the website,” she said, adding that sharing market research helps educate and keep clients.

Many of those surveyed said that the programs could generate more assets for their businesses: 35% said they had brought in $100,000 to $1 million in new assets as a result of taking part in the training.

Half of respondents said that the programs had generated $100,000 or less in investment activity, while 15% said that the programs had helped raise more than $1 million.

To be sure, it can be difficult to link some programs directly to new assets, Mr. Kilgallen said.

“Of the 50% who said they brought in less than $100,000, a good percentage of them could have participated in programs that were valuable to [their] office and have a long-term benefit to the adviser but not a huge impact on the assets,” he said.

The asset managers benefit, too, with 30% of the advisers saying that they had given more than 40% of the assets back to the sponsor of the program. Interestingly, almost an identical number (36%) said that less than 5% of the new assets had gone back to the sponsor firm.

According to the survey, the top-five firms in terms of quality of offering were AssetMark Investment Services Inc. of Pleasant Hill, Calif.; MainStay Investments, a division of New York Life Investment Management LLC; Nuveen Investments Inc. of Chicago; American Century Investments of Kansas City, Mo.; and Janus Capital Group Inc. of Denver.

E-mail Sue Asci at [email protected].