Advisor’s Edge takes in-depth look at survey findings and what they mean to you

(October 7, 2004) Looking for ways to improve your practice? Maybe earning a new designation or expanding your product line? Or maybe your workload is heavy enough (what with all that paperwork!) and you want to scale back, focusing on your key competencies? If only there was some way to find out how other advisors are fine-tuning their business…

If you’re wondering how you stack up, you’re in luck! The results from our third Annual Dollars & Sense Survey are in, and you can read all about it in the October issue of Advisor’s Edge magazine and online on Advisor.ca.

In last year’s Annual Dollars & Sense Survey, we heard from 1,255 advisors from across all channels and business models. This year we heard from even more of our readers.

“This is our big annual survey of advisors,” says Deanne Gage, managing editor of Advisor’s Edge. “This year we have over 3,000 advisor responses, which is pretty exciting for us.”

“We were really pleased with the response rate, as obviously advisors are incredibly busy people with a lot on their plates,” says Tricia Benn, the ADVISOR Group’s director of research. “It certainly shows the commitment of advisors to industry knowledge and providing insight into the needs, challenges and issues that they face.”

Paper problems

One very telling shift in the survey’s findings from last year is that paperwork and administrative issues are now ranked number one among the greatest day-to-day challenges faced by advisors. These issues were named the greatest challenge by 19% of respondents.

With paperwork listed as the number one challenge, it may not be surprising that among those considering leaving the industry, 40% blamed over-regulation for their possible departure. An additional 30% cited too much paperwork.

Last year, administrative details ranked fifth, with prospecting seen as the greatest challenge. Now usurped from the top spot, prospecting has fallen to second place, with 15% of respondents citing it as the greatest challenge, down from 22% in 2003.

Drilling down

For the third annual installment of the Dollars & Sense survey, we had our crack research team overhaul the entire survey, examining which data needed further research and how to make the questionnaire shorter and easier for the respondent.

“We’ve been able to tap into the relationships we’ve formed with our readers and understand their issues better,” says Benn. “This year we wanted to ask more and every year we want to go more in depth, so we streamlined the questionnaire in order to make it easier and less time consuming for the respondents.”

In streamlining the survey, the respondents were able to spend less time filling it out, while we were able to maximize the data collected. The improved survey allowed respondents to skip questions that did not apply to them, while allowing our research team to cross-tabulate the results for a clearer view of the challenges advisors face.

“We’re able to be more detailed about the information because we have the past two years’ data,” says Benn. “We’ve learned from the past surveys and incorporated questions that we had from the industry about our research. So we’ve been able to fine-tune it even further and really hone in on the information that is most crucial to share with the reader.”

Re-evaluating and re-tooling

Our Dollars & Sense survey found that many respondents are looking for ways to improve their business, become better equipped and build their client’s assets. Clearly, it’s “Retooling Time.”

“It’s time to look at and re-evaluate your practice,” says Gage. “For some, advisors are looking at getting a securities licence so they can offer their clients another stream of products. Others are simply getting new designations or getting better educated. Still others may choose to carve out a niche for themselves and become a specialist in one field.”

Additional Annual Dollars & Sense Survey coverage on Advisor.ca

• Designations matter, ADVISOR Group survey suggests • Advisor’s Edge takes in-depth look at survey findings and what they mean to you advantage • Twenty funds or one account? • Income and safety propel some, but not all, client wishes • 3rd Annual Dollars & Sense Survey: The tools to keep you on top (special report package)

“The article ‘Sharp-Edged Skills’ looks at what advisors are going to need to prosper in the future,” she says. “This story explores how you can’t be everything to everybody, but at the same time you have to be a jack of all trades in some regards. You need to be solid in all areas. One advisor likened the future advisor to a decathlete: maybe you’re not the top performer in one particular area, but you’re solid in all disciplines.”

The story looks at running the business, earning more designations and expanding the product realm beyond mutual funds and insurance.

While advisors are busy honing their skills and expanding their services, the survey found many are still avoiding a key facet of financial planning. “Holes in Your Practice” examines why so few investment advisors are including insurance in their practice.

“Some of them have been very successful without offering insurance, since the advisors with the largest assets tend to be on the investments side,” says Gage. “But even if you’re not offering insurance yourself, maybe you could be aligning with an insurance specialist to help serve clients’ needs.”

“Second Time Cautious” looks at the investment trends in 2003 — including asset allocation, diversification and both advisors’ and investors’ behaviour — with a view to the future.

“Seeking Solutions” deals with the key challenges facing advisors, such as paperwork, building their book, prospecting and time management.

“One advisor found his greatest challenge was the administrative paperwork and hired an organizer to come in and organize all the paper in his practice,” says Gage. “Hopefully there are some solutions in there that advisors can incorporate into their own practices.”

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The third Annual Dollars & Sense Survey was conducted among a representative sample of 3,034 of Canada’s financial advisors between June 21 and August 2, 2004. The margin of error for a project this size is plus or minus 1.7%, 19 times out of 20. For half-sample questions the margin of error is plus or minus 2.4%, 19 times out of 20. A 12% response rate was obtained.

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Filed by Steven Lamb, Advisor.ca, steven.lamb@advisor.rogers.com.

(10/07/04)