Financial advisors and planners – while they may have the word “plan” in their title – are struggling to create and engage successful business and marketing plans.
A new study by the Financial Planning Association Research and Practice Institute found that business growth is a major challenge in today’s financial advisory businesses, with only 25% of advisors reporting that they exceeded their business growth goals in the past year.
During a visit to ThinkAdvisor’s office on Tuesday, Janet A. Stanzak, FPA president and soon-to-be chairwoman, called these study results “so ironic.”
“We are a profession of financial planners, and yet what our studies are revealing? This one says financial planners are not doing business plans and marketing plans well,” she said. “… It’s ironic as heck that here we are group of planners and where we in our own businesses fall down is in some of the planning aspects of what we do.”
The 2014 Drivers of Business Growth study — which included the input of 434 professionals across the country, including FPA members and non-members, certified financial planners, advisors across all channels and a wide range of business sizes and models — found a substantial gap in advisors’ current business development between where they want to be and where they are.
Edward W. Gjertsen II, FPA president-elect, pointed out that only 9% of respondents indicated that their business development process is “very effective.”
“Which means 91% don’t,” Gjertsen told ThinkAdvisor. “So, that’s a good gap.”
Study participants were asked, “Thinking about your current business development process, how would you rate its overall effectiveness in helping you reach your growth goals?”
More than half of respondents gave their process a subpar rating — with 33% calling their plans neither effective nor ineffective, i.e. “neutral;” 19% saying they were “not very effective;” and 4% calling them “not at all effective.”
“When you ask some really tough questions you get some interesting answers coming back,” Gjertsen added.
Gjertsen’s day-to-day is spent at Mack Investment Securities Inc. in Northfield, Illinois, as vice president and financial planner.
“As a practitioner,” he said, “it’s very valuable to know that there’s some work that needs to be done.”