Advisor Forum update: Tapping into wealth market key for unhappy advisors, Bowen says

(October 19, 2004) Nearly half of Canadian advisors aren’t satisfied with their level of success, according to a survey presented at the Advisor Forum in Halifax. That could be because most advisors aren’t making as much as money as they had hoped and don’t know how to tap into the lucrative wealth management market, says John J. Bowen of CEG Worldwide.

CEG’s survey of about 600 Canadian advisors with at least five years experience found that only 20% had net annual incomes of more than $200,000. Forty-six per cent made between $100,000 and $200,000 while 34% had yearly earnings of less than $100,000.

“These numbers are pretty consistent around the world,” Bowen said at the conference’s opening session. “As an industry, we are not well compensated.”

The survey also found that the vast majority of advisors believe wealth management — defined by CEG as meeting the needs of affluent clients as part of a long-term consultative approach — will be the dominant business model going forward.

But there’s a perception problem among Canadian advisors, Bowen says, with most mistakenly believing that there is a lack of private wealth in this country. In fact, another survey, conducted by Cap Gemini, reveals that more than 200,000 Canadians have investable assets of at least $1 million.

“There are enough affluent clients to go around because most of your peers aren’t going after them,” Bowen stated.

But how do you find those affluent clients? Referrals were the top prospecting strategy among higher income advisors, the CEG study found.

“Referrals require relatively little time and expense from the advisor,” the study says. “Furthermore, our research shows that affluent clients prefer to find their advisor through referrals.”

Successful advisors also use other professionals, such as accountants and lawyers for referrals, Bowen added. In fact, a separate CEG study revealed that fully three quarters of accountants were interested in working with an advisor.

For middle income advisors, seminars can also be an effective method of attracting new clients. But Bowen notes that seminars tend to be more time and cost intensive than referrals.

At the lower end of the income scale, advertising, direct mail and cold calling remain popular. The study suggests it might be time to ditch those particular prospecting tools.

“Advisors might be well served to follow their more successful counterparts and focus their energies on obtaining referrals from clients and establishing referral relationships with other professionals.”

John J. Bowen is one of the keynote speakers at all five Advisor Forum conferences this year. For more information on when Advisor Forum comes to a city near you, please click here.

Filed by Doug Watt, doug.watt@advisor.rogers.com.

10/19/04