I just got back from attending the Financial Planning Association (FPA) Annual Conference in Nashville. I was thrilled to participate on the panel session “Digital technology and the evolution of financial planning.”

The FPA Conference has always been a big event for Vanguard. Our shared commitment to the profession of financial planning is important to us, which is why we are the lead cornerstone partner with FPA.

Events such as these help me stay connected with planners and their concerns and learn about what the top firms are doing to maintain their edge, and I always come back from these events energized and filled with great ideas.


Traditional advice is here to stay

It’s easy to see that the world of advice is changing. Portfolio performance is no longer the predominant focus, investors are more fee-conscious than ever before, and robo-advice services are starting to have an impact on the industry. The word fiduciary is now part of an investor’s vocabulary.

Yet, with all these changes, full-service advice is as important as ever. How do I know? Because traditional planners can deliver two benefits—personalized service and a strong relationship—that robo/hybrid advice services will never be able to offer investors.

It’s clear that building out your value proposition to ward off the increasing competition is the direction top firms are heading. Our advisor’s alpha research demonstrates the value you can add to a client’s portfolio above selecting investment managers.

You shouldn’t see robo-services as just a threat. There’s an opportunity to work with them to help build efficiencies in your practice.


Technology offers an opportunity

There’s also the opportunity to think about using technology in other areas to improve the efficiencies of your practice. Examples that we discussed on our panel included data-aggregation software, online document signing, video technology, and online appointment making for your clients to access designated meeting times on your schedule.

Changes like these may be challenging, but planners who evolve their practices can thrive in the new age of advice by making themselves indispensable to clients—the foundation for boosting referrals.

Client loyalty is going to be critical in this more competitive environment. Loyal clients* are more likely to stay with you in difficult times and will ultimately become your best resources for referring new clients. We measure our clients’ loyalty using the Net Promoter Score concept. I’d encourage you to do something similar. It can be done relatively simply with online tools such as SurveyMonkey.

I’ve spoken with a number of top firms, and they conduct this type of survey with their clients annually. The outcome is that you get a score which you can use to measure your progress. More important is the verbatim feedback you receive from clients, both positive and negative. Clients are more likely to give more honest feedback in a survey rather than in a face-to-face meeting, where they may find it uncomfortable to give direct feedback.

The most important aspect of this survey is closing the loop. This involves communicating back with your clients what they have told you, both good and bad, and announcing how you’re planning to fix any perceived problems. Then keep updating them on the progress.

We’ve helped many advisors implement this in their practices and can do the same for you.


Let’s learn from each other

As my wife will happily tell you, I don’t know everything. Professionally, I’m always learning from my colleagues and people I talk to in the industry.

Many of the top firms I encounter have the same mind-set. They’re always looking for ways to improve the service they provide to their clients. For instance, leading firms view technology not as a threat but as an opportunity to deliver value.

That’s why I want to use these blog posts to share best practices that we observe top firms using. We’ll share the business impact these approaches have had and explore how you can implement similar ideas in your own business.

By learning from one another, we can raise the bar for financial planning.


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