It's been at least two years since the financial system went into a tailspin, but financial adviser Mark Donohue of RBC Wealth Management is still working six days a week, often out on the road visiting clients to make sure they know he doesn't take them for granted.
View Practice Management data here.
Mr. Donohue, who manages about $1.1 billion in assets, talks to clients about their lifestyle, goals and risk tolerance, and works on long-range solutions.
“I've worked six days a week for well over a year, just to make sure people know I am there working and that clients feel prioritized,” said Mr. Donohue, who has been an adviser for 27 years. “That's the minimum we should deliver to people who trust us with their money.”
Advisers said the faltering economy and resulting market swings require that they spend more time strengthening the client relationship and coaxing customers back into the investing mode. They also said they have to make sure their own houses are in order — that their advisory practices are staffed adequately and employees compensated appropriately.
Many advisers said their client focus extends beyond additional communication.
SOUND CHECK
Jim Barnash, vice president of branch development for Capital Analysts Inc., said advisers who want better client relationships should learn to understand the emotional elements that surround financial decision making. Advisers also should improve their own presentation and communication skills, he said.
Mr. Barnash, who helps Capital Analysts' 350 advisers with practice-management issues, said he recommends that advisers videotape their presentations to see how they are coming across to clients. Advisers often are surprised by how awkward they sound, he said.
Mr. Barnash also recommends becoming an advocate for clients in issues outside the traditional investment realm, perhaps helping them with problems such as finding long-term care for ailing parents.
“Asset allocation is whimsical and subject to market fluctuations that you can't control,” said Mr. Barnash, whose firm manages about $3.5 billion in assets. “You can control the client experience.”
Many advisers said their clients are keeping significant amounts of money out of the markets because of economic fears and the volatility of recent years. It's a challenge for advisers to gain the client's faith and bring those assets back into the market so the investor can benefit as the economy recovers, said Joni Youngwirth, managing principal of practice management at Commonwealth Financial Network.
“It takes a lot of time to get them back in there,” she said. “Advisers are gun-shy and afraid to be too emphatic, because they themselves have been so burned and surprised by the markets the last three years.”
ON THE SIDELINES
At Green Financial Resources LLC, chief operating officer Laura Green said many clients are hesitant “to do anything right now.” She hopes the November congressional elections will ease their paralysis.
If Republicans were to gain a majority in the House and Senate, her firm's conservative client base would feel more confident about the nation's economic future and hopefully be ready to get back into the markets, said Ms. Green, whose husband, Roger Green, is the sole adviser for the firm, which manages $350 million in assets.
Some advisers see next year as a time for growth, as they prepare for the nation's 79 million baby boomers to retire.
Deciding whether to add advisers or support staff and how to compensate these people are issues weighing on advisers' minds.
“How to find, retain and train great people, and then keep them motivated is something advisers struggle with today,” said George Tamer, director of strategic relationships at TD Ameritrade Institutional.
Some advisers are moving away from the “holiday bonus” type of inducements and are creating incentive-based pay-for-performance programs, he said. Whether objectives are based on bringing new assets in the door or the number of referrals, the idea of setting specific goals for employees is taking hold, Mr. Tamer said.
Firms also are investing in back-office technologies and client management software programs that will help them expand their businesses, he said.
'ENSEMBLE' PLAYERS
Many advisers are looking to take advantage of economies of scale by becoming “ensemble firms” of two or more advisers, said Ms. Youngwirth. “This creates issues of compensation, and when to give equity to someone, and how to let them buy into the firm.”
A structure with two or more advisers is tempting because it means another person is available if the founding adviser wants or needs to take time off. It also creates an internal group of people who might want to buy the business when the original adviser retires, Ms. Youngwirth said. However, “if you are solo, you call the shots, and you don't have to compromise,” she said.
Mr. Barnash, a former president of the Financial Planning Association, said there are times when it is better to add employees instead of technology. Additional people can also boost the “human-relationship element.”
The best advisory talent, though, may have gotten away over the last year or so as many talented professionals moved from large brokerages to fee-based asset management practices.
“If you weren't looking at hiring advisers a year ago, the best talent probably already found new jobs,” Mr. Barnash said.
