Financial Advisors

Financial Advisor Survey: The Challenges Ahead

Our team at Canterbury Investment Management recently conducted a survey of financial professionals on the challenges facing their practices heading into 2021.  Ninety-Five financial advisors participated in the study, providing insights to their priorities regarding practice development, business management, and prospecting. 

The following text is some excerpts from an interview between Brandon Bischof, Vice President of Portfolio Strategy at Canterbury Investment Management; Tom Hardin, Chief Investment Officer at Canterbury Investment Management; and Brent Slinkard, a consultant and strategist to independent financial advisors. The interview focuses on the results from the survey and highlights how advisors can improve in each area of their business. A trailer for the interview, as well as a link to the full-length interview can be found below.

Trailer- 2021 Advisor Survey from Canterbury on Vimeo.

A full-length video version of this interview can be found here.

BRANDON BISCHOF: One of the main concerns we got back from the survey is that advisors want to know a way to help build a repetitive, ongoing, delivery system of qualified prospects. How do advisors go about bringing in new business to their practice?

BRENT SLINKARD: A delivery system of qualified prospects is something that every financial advisor is seeking. Unfortunately, I think that is one of the misunderstandings within the industry.  There is no magic formula.  Generating quality leads requires a systematic process over time.

If you look through the optics of an investor, it is about communicating properly, informing, educating, and nurturing over time to a point where you can ultimately convert that prospect to a quality client.  So, I think part of it starts with just the mindset. How do we think about lead generation? How do we think about business development?  I assert that it is absolutely based on a systemic process that allows you to nurture leads over time and bring them in, in an intelligent way to your advisory.

BRANDON: So, you are saying we need a systematic, evidence-based, testable process for bringing in new clients.  Tom, I want to turn to you.  Bringing in new clients is one aspect to an advisor’s business, but how do we go about retaining and nurturing that client relationship?

TOM HARDIN: I think one of the biggest mistakes that advisors make is scheduling these quarterly or semi-annual meetings where they take this performance monitor, and they compare the performance of their portfolio to either an index or combination of benchmark indexes.  The problem with that approach is that it puts the client in the left brain, and they start worrying about all these comparisons and numbers and they may even begin questioning the process if the index happens to beat the portfolio over a quarter or over a short period of time.  To be honest, I do not do comparisons.  I do not show the client a comparison versus any kind of numbers.  Instead, what I want to do is to get them focused on the right brain. I want to teach concepts that reinforce the process.  I want them to begin to connect me and my expertise to their dreams and their goals and make the connection that I can help them get there. 

The truth is that most financial advisors create their own objections which ultimately get them fired.  They focus too much on the markets, they focus too much on short-term performance and comparing to irrelevant benchmarks. Instead, they need to focus on training the investor in the overall investment process and building confidence in the process and getting them away from worrying about all these short-term events and focusing on what they’re really interested, which is their life.

BRENT: Let me add something to that Brandon. Tom, I think you make an excellent point. Another way to look at that is messaging.  It is all about the messaging. And that is not just to acquire a new client, but to retain a client over time and I think you make an excellent point to how critically important messaging is over time.

BRANDON: Another main concern we saw from the survey was “How do advisors improve their ability to compete with other competitors in their market?” In addition, how do advisors go about building a unique and powerful brand that separates them from their competitors?

BRENT: I think that management of your brand and reputation is really misunderstood by a lot of financial advisors. In order to do that, you have to think about your digital footprint, you have to think about your storytelling aspects of your brand, you need to think about your market leadership within the market you’re working, and there’s a lot of ways to look as to how you can outcompete the competition in your marketplace. The other way to look at this too, Brandon, is to think of it in terms of horizontal growth or vertical growth, and I absolutely believe that those advisors that understand vertical growth, mining your current existing database, there’s enormous opportunities for retention because you’re always ahead of the curve.

TOM: To add to what Brent is saying, technology is the key.  Technology has changed most business models to the point of being virtually unrecognizable. I think that is one of the areas where we need to spend more time exploring what new developments are happening in the area of technologies that can bring us closer to our clients. Developing applications is actually something that can be done by financial advisors right now.  Our industry has just been locked into conventional wisdom and traditional ways of doing business for so long that anything you do that is a little bit different can really set you apart. Technology and the applications to harness the power of technology, can put you in a unique position when competing against your competitors, especially the bigger firms.

BRANDON: Speaking of Technology, let’s talk about the pandemic and the challenges that it has presented over the last year.  A concern highlighted by advisors is “how do I operate my business during the pandemic and after the pandemic?”  What we saw from the open responses is that many advisors want to get back to meeting face-to-face with their clients. They’re tired of Zoom calls, they’re tired of phone calls, they want to be in the office in an in-person meeting.  So how do advisors move forward after this pandemic?

BRENT: This is a topic that has been discussed throughout the industry.  It’s the elephant in the room- it’s the pandemic.  It has absolutely changed, from a foundational perspective, it has changed the way we do business. I am seeing that those advisors who were able to pivot to an online platform, and do that with ease, are truly having success, pandemic or not, markets or not. They have learned to reposition their brand through technology. I cannot express how important this is moving forward because none of us here have a magic ball- and if you did, I don’t know if I would believe you.  So, my point is this: we do not know how long this current environment will last. So, I think you are best suited to embrace technology, the full platform, and embrace technology and become very good at it because I think that it is the way of the future.

TOM: Many of our conversations have revolved around technology. We have those tools in our industry, but the training we have seen out there really has not changed. People are being taught, advisors are being taught, the same things that they were back when I used to be with the big firms two decades ago.

That is why our team at Canterbury is in the process of launching The Canterbury Institute.  We want to take training to a new level, to bring it into the 21st century.  We all know that the major players in the financial services industry have been stuck.  They have been stuck in old ways of thinking and stuck in conventional wisdom. And we also know that conventional wisdom is the killer of innovation and the killer of new ideas. We train advisors to have a whole new conversation with their clients. One that begins with identifying high net worth prospects, and then turning those prospects into clients, and then training those clients to be good investors. Investors who will buy into a process and remain good clients throughout their entire investment lifetime.

Believe me, clients don’t want to move.  When they hire an advisor, they want to be with an advisor for the rest of their lives, but studies have shown the average client is on their third advisor and they are still not happy.  What we really want is a win-win kind of scenario: where you, the advisor, wins and gets clients, you have the peace of mind in knowing that you’re telling a story and you’re giving the client the kind of education that will help them be able to live through different environment and be able to actually benefit from the idea that markets can sometimes be volatile. We can have that lifelong relationship with our clients, and everyone have the peace of mind in knowing that we are doing the right things.

A full-length video version of this interview can be found here: https://www.canterburyinst.com/advisorsurvey2021

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Tom Hardin

As Chief Investment Officer, Tom has more than 30 years of experience in the investment management industry and has a broad breadth of knowledge. He is known as an innovator, educator and has been revolutionary in the advancements of portfolio and risk management.

Read Tom's Bio

Brandon Bischof

As a Vice President at Canterbury Investment Management, Brandon is a thought leader in exploring and developing evidence-based approaches to money management. He is co-director of Canterbury Analytics Group, which creates sophisticated applications and processes that embrace “disruptive innovation.” Brandon is a Chartered Market Technician (CMT).

Read Brandon's Bio