Added-Value Programs Leave Advisors Wanting

Financial advisors do value financial firms’ value-added programs—they just want the firms to add more value.

That is one conclusion of a newly completed study examining advisor attitudes on the plethora of programs, tools that broker-dealers, asset managers and insurance companies make available to advisors in hopes of drawing attention to their products.

Value-added is far more than the squishy balls and candies handed out at investment conferences. It encompasses all the things firms do—be it software, market commentary or speakers—to influence advisors outside of the product itself, and firms collectively spend tens of millions of dollars in these efforts, says Howard Schneider (left), author of the 76-page report, in an interview with AdvisorOne.

The president of the consulting firm Practical Perspectives surveyed over 600 advisors earlier this month to find out the impact these various programs are having on advisors, and reached some surprising conclusions.

For example, despite all the attention given to social media, that was the topic area (out of a total of 32) that advisors expressed the least interest in—by far.

“My clients are 55 to 65—am I going to be tweeting to them?” is how Schneider characterizes advisor reaction, adding that a majority of advisors themselves are over 50.

Another finding is that advisors are highly divided on what areas they are most interested in. Broadly speaking, the economy and investments and client development and engagement attracted the most advisor interest, with practice management and retirement issues assuming lesser urgency.

Schneider says he was impressed with the proportion of advisors reporting that value-added programs impacted them: 28% of advisors said they had a significant impact—a high figure, he thought—and fully three-quarters of advisors reported the programs had some impact (modest or significant).

More than two-thirds said the programs influenced their perceptions of the provider firms, with a quarter of advisors saying that influence was significant. Three-quarters of advisors said the programs influenced their willingness to learn about the products of an advisor.

“In that sense, firms that are spending that money are getting payback,” Schneider says. “But when you ask advisors whether they are satisfied, satisfaction levels are quite low.”

They’re using these programs, but say they could be better, he says.

In particular, survey respondents want programs that are usable with their clients.

“They want support that is client-centric, whether it is literature they can use, illustrations they can use, software they can use, seminars; and [they value] the uniqueness of the information—something that they can’t get elsewhere. They don’t want programs with information they already have.”

Schneider adds that advisors expressed a strong preference for value-added programs that are actionable and implementation-oriented rather than theoretical.