Too many advisors prioritize returns and revenue over clients’ needs and financial educations, according to nearly half (40%) of the attendees at a CFA Wealth Management Conference in Toronto.

In a live poll, 75% added that’s the main reason the industry’s reputation has slumped over the last 10 years. The group included planners who advise wealthy clients. Average book values were between $100 million and $200 million.

Roger Urwin, global head of investment content at Towers Watson, says the poll results aren’t surprising, adding planners across the globe are struggling to keep up with volatile markets, increased regulatory pressure, and changing technology.

As a result, they have little time to check up on clients and provide value-added services, such as appreciation events.


But there’s a silver lining: 93% of attendees want to focus more on improving full-service financial planning, instead of portfolio performance.

And that’s the right choice, says Harold Evensky, CFP and president of Evensky & Katz Wealth Management. Advisors can’t depend on markets and performance because real returns will likely drop below 5%, after accounting for taxes and fees, in the coming years.

Read: Tax management is critical to your practice

But don’t despair, he says. Clients aren’t looking to chase yield. They want decent returns, but also want to know they’re getting good advice and that they’ll meet their goals.

So, how can you make sure clients see your value? Aim for transparent relationships, says Urwin, which is the key to success.

Read: Strong markets prop up wealth industry

Globally, he adds, regulators are also putting pressure on compensation models since investors want to see cost breakdowns from advisors.


Urwin and Evensky provide these tips on how to enhance your services.

1. Learn how to structure drawdown portfolios. Many clients are nearing retirement, so you should have conversations about their post-work income needs. Walk them through the deaccumulation process, and discuss whether they’ll need to stay invested in the market. Read: How to structure drawdown portfolios.

2. Reduce cluttered product lineups. The majority of conference attendees (77%) say they’re happy with their own business models and services. But 26% aren’t as confident about the business models of product distributors, including insurance providers and mutual fund companies. So evaluate the products you offer, and cut down on any that don’t add value to clients’ portfolios.

3. Choose portfolio managers carefully. Before working with external managers and experts, look at their performance histories, processes, philosophies and return prospects. Also, ask how they control costs and fees.

4. Avoid jargon. Develop a clear language with clients and assess financial literacy. Though you can’t avoid using some industry terms, such as risk tolerance, make sure people understand what those terms mean. Always define complex terms and ask clients what kinds of materials they’d like you to share with them. Read: Down with jargon

5. Set performance expectations. From day one, discuss the impact of fees, expenses, taxes and inflation on returns. Explain how you factor each in when going over your process and return predictions during initial meetings.

6. Offer flexible investment policies. You can’t change your process for each client, but you can tweak your approach in some cases. For instance, Evensky prefers to have people invest internationally, but a few of his clients prefer domestic stocks. He uses a core and satellite investment strategy, and monitors and rebalances people’s portfolios regularly. Read: Faceoff: Core or explore? and Minimize risk with alternative strategies