So called value-add programs and tools from vendors are getting the attention of financial advisors and influencing their behavior, according to a new study, but still leave much to be desired.
I was surprised by the degree that value-add does influence advisor behavior and their willingness to consider a vendor's product, but overall satisfaction with these programs is modest at best, said Howard Schneider, president of Practical Perspectives, the North Andover, Mass.-based research and consulting firm that issued the report, Value Add Support to Financial Advisors Insights and Opportunities 2013. Theres a lot of room for improvement.
About 60% of the 600 advisors surveyed in May by Practical Perspectives said support tools and programs such as market commentaries, webinars, instructional booklets, software and seminars impacted their attitudes and actions. Roughly one in five advisors, according to the report, said the programs and tools have a significant impact on their perceptions of providers and drive them to take subsequent action.
Nonetheless, there remains significant room for improvement in the delivery of value add support, the report states. Advisors are looking for enhancements in both how programs are made available to them and the types of issues addressed in these programs.
Specifically, advisors want material and programs they can use to attract new clients and differentiate their practice, Schneider said.
They want tools that are practical, such as helping them to identify the risk capacity of a client, he explained. And they want to receive the material in person, in their office, so they can not only see it, but ask questions and use it properly.
Surprisingly, the survey found that social media elicited little interest from advisors.
Despite all the attention given to social media, Schneider said, it was at the bottom of the list for advisors, and not anywhere close to other priorities for engaging clients.
BlackRock/iShares, the report found, was by far the most frequently listed provider of useful value add support, followed American Funds, JP Morgan, MFS, Jackson, and Fidelity.
Vendors hoping to break through to advisors should deliver support programs and tools that are distinctive and not merely following the lead of another organization, the report counseled.
Whats more, vendors should avoid a one-sized fits all approach, Schneider maintained. Its really Marketing 101, he noted. There should be segmentation by channel and size of assets. They should try to stay away from theoretical and academic support, although that does appeal to some RIAs. But most advisors want action-oriented tangible support.
In the past year, at least half of the advisors surveyed said they received support for such relevant topics as generating income in a low interest rate environment; using alternative investments; annuities; Social Security benefits and options and generating sustainable income for retirees.