Today’s advisor needs a plan, and the client conversation shouldn’t be about what to buy, but what kind of a value proposition the advisor can provide.
Jason McIntyre, head of distribution for Vanguard Investments Canada, says that the biggest challenge for advisors is being able to articulate properly and then have a plan to work with for the client.
“A lot of the conversations we’re having is around helping them with the tools that we have,” says McIntyre, “build the plan, build their value proposition, build a financial plan for the client, and coach them through the behavioural coaching side of it.”
“We’ve got a paper that we’ve published showing that advisors can add about 3% of value to their clients’ portfolios by doing these types of things: portfolio construction, wealth management and behavioural coaching can add 3%. What we want to do is help these investors – through advisors – reach this 3% value-add.”
“So when we are asked, ‘what should we be buying?’ we say, back up – let’s remember: how do we build a value proposition, and what are we really focused on to achieve what we call a ‘3% Advisor’s Alpha’.”
“In our business, change is constant,” says Atul Tiwari, the managing director of Vanguard. “Whether it is through competition or regulatory prompting – all of these trends that we see globally, we see more and more advisors moving to a fee-based approach. We see more advisors and clients using lower cost products, and we see regulators taking certain positions on things like commission-based selling versus fee-based selling.”
“It is important for advisors in today’s market to be aware of these trends, and to try and position themselves ahead of these changes that we’re seeing globally – and may see here in Canada.”
“We provide a lot of thought leadership, and we hope that what we’re providing is of use to advisors as they position their practices for the future.”