A new study finds that advisors can do a few simple things when onboarding clients to get the relationship off to a flying start
The BC Securities Commission released its Smarter Investor Study earlier this week which asked 2,407 Canadians, 35 or older, about the client/advisor relationship. While the overall findings suggest this relationship is generally good, there are some things advisors can do very early on to make it even better.
"Investors need to know the importance of being actively involved in their relationship with their investment advisor and advisors need to encourage their clients in this," said Brenda Leong, Chair and CEO of the BCSC. "Our study shows that investors who know the most, have the right attitudes, do the right things, and whose advisors do the right things, all score well above average on our Smarter Investor Index."
In other words the relationship is a two-way street.
It’s not enough to be the best advisor you can be, you also need the client striving for excellence as well.
WP spoke with Paul Bourque, BCSC Executive Director about what advisors can do to further strengthen the relationship with clients.
“To the extent that advisors engage in what we would call ‘best standards’ conduct where they keep the investor engaged, where they keep the investor up-to-date and informed,” said Bourque. “Our research shows that the investor has a much better perception of the relationship and a better perception of the investment outcome.”
Here are five simple things.
1. A majority of those surveyed have never done a background check on their advisor. Whether you’re a friend of a friend or a total stranger, insist that prospective clients go to their provincial securities’ commission’s website to check on the advisor’s registration. If they can’t find a record of you, get them to call your head office. Be proactive in building trust.
2. As the OSC’s mystery shopping experiment highlighted, some advisors don’t reveal their annual compensation. CRM2 intends to work on that. Don’t leave anything to chance. From day one insist that they ask about fees and do your part by explaining them – annually, or even better, quarterly.
3. Hand in hand with the second point is explaining to the client how you are paid. The survey finds 23% of those with advisors aren’t sure how their advisor is paid. Right up front before you bring them on as a client explain to them how exactly you’re compensated and then continue to explain it every time you tell them how much you were paid.
4. The study identified five basic investor personality types: diligent, confident, reserved, impulsive, and tumultuous. Know which one best fits the client and use that to best interact with them. Seems obvious but many advisors forget to do so.
5. Provide references. It’s not enough that you’ve proven you’re registered. Go the extra mile and suggest 2-3 people they can contact to learn more.
"Investors need to know the importance of being actively involved in their relationship with their investment advisor and advisors need to encourage their clients in this," said Brenda Leong, Chair and CEO of the BCSC. "Our study shows that investors who know the most, have the right attitudes, do the right things, and whose advisors do the right things, all score well above average on our Smarter Investor Index."
In other words the relationship is a two-way street.
It’s not enough to be the best advisor you can be, you also need the client striving for excellence as well.
WP spoke with Paul Bourque, BCSC Executive Director about what advisors can do to further strengthen the relationship with clients.
“To the extent that advisors engage in what we would call ‘best standards’ conduct where they keep the investor engaged, where they keep the investor up-to-date and informed,” said Bourque. “Our research shows that the investor has a much better perception of the relationship and a better perception of the investment outcome.”
Here are five simple things.
1. A majority of those surveyed have never done a background check on their advisor. Whether you’re a friend of a friend or a total stranger, insist that prospective clients go to their provincial securities’ commission’s website to check on the advisor’s registration. If they can’t find a record of you, get them to call your head office. Be proactive in building trust.
2. As the OSC’s mystery shopping experiment highlighted, some advisors don’t reveal their annual compensation. CRM2 intends to work on that. Don’t leave anything to chance. From day one insist that they ask about fees and do your part by explaining them – annually, or even better, quarterly.
3. Hand in hand with the second point is explaining to the client how you are paid. The survey finds 23% of those with advisors aren’t sure how their advisor is paid. Right up front before you bring them on as a client explain to them how exactly you’re compensated and then continue to explain it every time you tell them how much you were paid.
4. The study identified five basic investor personality types: diligent, confident, reserved, impulsive, and tumultuous. Know which one best fits the client and use that to best interact with them. Seems obvious but many advisors forget to do so.
5. Provide references. It’s not enough that you’ve proven you’re registered. Go the extra mile and suggest 2-3 people they can contact to learn more.
