VIP Forum research shows that demonstrating strong engagement competencies – emotional intelligence and need identification skills – achieves the key emotional outcomes that build client loyalty and drive asset growth today. However, The Forum finds that less than 50% of advisors perform “very well” at these competencies and both clients and advisors recognize the gap in advisors’ emotional intelligence.

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The News: According to a recent study, 46% of advisors say they hope to add at least 16 new clients in 2012. However, nearly one-third of advisors surveyed in 2011 said they didn’t have enough time to spend on business development and a quarter said they lacked sufficient expertise.

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Today, advisors must meet unprecedented client demands while simultaneously courting new business for their firm. To ensure advisors spend their time most effectively during the sales process firms must instill a more disciplined approach to pipeline management.

One leading firm, Blackwell Private Bank (pseudonym), develops a pipeline system comprised of three phases:

1. Search Phase – confirm lead quality and gather prospect information
2. Action Phase – schedule prospect meeting and develop proposal
3. Closing Phase – present proposal and introduce the service team

The three-phase process allows advisors to calibrate the likelihood of closing sales opportunities in their pipelines and thus, determine key next steps. Since implementing the strategy Blackwell has seen significant increases in sales productivity, measured by the number of proposals made, meetings completed and an increased flow of net new assets.

Forum members, learn how to ensure a greater degree of advisor accountability in the sales process.

Talent is driving up FS expenses. This is just one finding from our inaugural Financial Services Business Barometer survey.

In Q3 2011, CEB surveyed top cross-functional executives from the financial services industry about their 12-month outlook on key drivers of economic performance. In line with the slowdown seen in the global economy, survey results indicate that executives in the financial services industry have low confidence in revenue growth in the coming year and concerns about costs.

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The results of a recent survey from the Forum’s sister program, the Corporate Leadership Council, shed light on current employee engagement levels in financial services, and specifically in the wealth management industry. While wealth management employees report higher discretionary effort than most other financial services businesses, their intent to stay is low – the second lowest among all other financial services businesses. Not great news for the wealth management industry given the value clients place on long-term relationships.

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The News: A new report by Scorpio shows the rate of new money coming into institutions slowed by close to 19% last year. Though assets under management across the industry were up 11%, Scorpio attributes much of the increase to market movements boosting the value of client’s investments rather than banks rapidly booking new business.

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In efforts to quickly fill frontline positions with tenured advisors who automatically will bring clients with them, firms tend to assess advisor candidates on hard metrics, such as past sales performance or book size, which fail to measure the behavioral attributes and core competencies necessary for success at the firm.  VIP Forum research shows that advisors’ past performance and book size are weak indicators of advisors’ future performance at a new firm.  In fact, advisors who demonstrate behavioral attributes that align with a firm’s culture are not only more productive, but are also likely to stay with the firm longer.

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A recent VIP member poll finds that 78% of advisor recruits in 2011 will come from the tenured advisor forces of other firms. While wealth managers expect poaching high-performing advisors from other firms to result in a quick AUM boost, VIP research indicates that advisors with more industry experience are not more productive than their less experienced counterparts. In fact, average productivity increases with tenure at the current firm, not tenure in the industry.

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Today wealth managers strive to identify a segmentation strategy that will give them a competitive advantage in the market.  VIP Forum members often tell us that despite efforts they’ve made to target specific segments they struggle to drive adoption of the strategies on the front line.  Forum research finds that the most effective segmentation strategies are those that originate from the insights and expertise of front line advisors. Read More »

In recent conversations with VIP Forum members we have received a number of questions regarding service differentiation for different client segments.  We often hear that advisors spend their time on the wrong clients—those that don’t generate, or have the potential to generate, much revenue for the firm.  Members report this issue is more pronounced in the post-crisis, with all clients demanding more communication and advice.  To improve the economics of individual client relationships, firms must mitigate service misalignment issues and ensure advisors target their time to the optimal clients. Read More »