New FPA survey reveals characteristics of top advisers

'Behavioralists' outpace their colleagues in such areas as net client growth rates and referrals

Oct 3, 2018 @ 9:54 pm

By Jeff Benjamin

Building better relationships with clients is never a bad thing. But the most successful financial advisers also are able to leverage technology to dissect and solve client problems — and then dish out the tough love of delivering straight talk when necessary.

The trifecta of "will, skill and means" makes up the ingredients of a "behavioralist," which the Financial Planning Association has identified as a quality few advisers possess but many can attain.

As detailed Wednesday in Chicago at FPA's annual conference, behavioralist advisers are characterized as being above industry averages in several key areas.

A survey of more than 300 advisers found that only 15% hit all three categories enough to qualify them as behavioralists. But that minority category tends to outpace the general planning community when it comes to net client growth rates, referrals, percentage of clients who say they would refer their adviser and percentage of client relationships characterized as fulfilling to the adviser.

The so-called Know Your Client benchmarking study, done in conjunction with T. Rowe Price and Capital Preferences, was presented as the first in a series of areas aimed at helping advisers improve business and client relationship skills.

"This is not just a new flavor of being a life coach," said Pat Spenner, chief marketing officer at Capital Preferences. "In identifying behavioralists, we're looking, for example, at how planners deal with the tension that creeps into a client relationship. Behavioralists are comfortable with that tension."

In his explanation of such an adviser, FPA president Frank Pare talked about the ability not only to recognize when a client is not doing what they had agreed to do, but also to call the client's attention to it.

"The better we know and understand our clients, the better we are at providing financial planning services," he said. "Having a deeper understanding of our clients helps us to point out where there might be some inconsistencies in terms of what they do versus what they say. I've seen that where clients are looking to the future but still going to Vegas on a regular basis."

Mr. Pare said pointing out the "say-do misalignment" improves the client relationship, even though it might not always be an easy thing do to.

"Clients want to be called out," he said.

While all advisers are not natural behavioralists, most advisers can be taught to develop their traits, according to Jean Dunn, vice president at T. Rowe Price.

The benchmarking research is designed to be a living document, which includes inviting advisers to participate in evaluations to determine where they might be stronger or weaker in terms of behavioralists traits.

"What's interesting is advisers might think they know their clients better than they do, and they will also be able to see where they are compared to their peers," Ms. Dunn said. "We figured out that the more you know your clients, the more that translates to better business results. It's not just nice to have that knowledge."

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