“There’s a fork in the road ahead of you. One path follows the status quo, the other leads to continuous improvement. It’s where the best advisors will rise to meet a new world of client expectations for knowledge, insight, engagement and technological competency.” ~ Dean Connor, President and CEO, Sun Life Financial.

It’s a great time to be an advisor. If you’re prepared to thrive in a challenging financial environment, so too can your clients.

The value of advice is rooted in long-term, trust-based relationships where you understand your clients’ particular needs as their personal situation changes over time. What you bring to the table isn’t a cookie-cutter approach or a one-time solution. It’s a perspective that sheds light on the potential for lifetime financial security.

As you navigate through low-growth environments and volatile markets, it’s important to make sure the conversations you’re having with clients position you as a lifelong, trusted advisor. Sun Life Financial’s CEO and President, Dean Connor, offers some insights that can help:

1. Make a long-term commitment

Did you know?

Households with a financial advisor for 15 or more years have 2.73 times more assets.1

Are you nurturing client relationships that last? The value you convey to your clients is based on the security of knowing you’ll be there to guide them over time. With your advice, they can put a plan in place that looks forward, taking into account the variables that could veer goals off track. Whether clients face health issues, job loss, a home purchase or just want to protect what they have, working with an advisor who sees the bigger picture can clear the way to confidence in retirement.

The 2015 Sun Life Canadian Unretirement Index survey tells us Canadians who work with an advisor are more optimistic about their financial futures, including the ability to take care of basic living and health expenses and to protect loved ones from unforeseeable circumstances.

2. Have a discussion about market uncertainty

“If you thought advice was important before, along comes low interest rates,” warns Connor. You need to take the time to clearly address the market conditions and associated risks. Use those facts to drive discussions about low-interest environments and how they spur a greater need for financial guidance. For example:

  • How should clients think about long-term rates of return available from bonds, equities, real estate and other asset classes? If you can only earn 3% on a 10-year Single A Corporate Bond, and 6-7% on equities — say 5% blended net of fees – what happens to your client’s retirement plans? Should they assume they can do better, or should they plan for the worst and hope for the best?
  • What advice do you give a client who is in the de-accumulation phase in retirement? It used to be you should take equity risk off the table as you get older, but does that advice make sense?

As Dean Connor explains, the advice you offer will have to be tailored more closely to clients’ specific needs. In a recent study2 of Canadian mutual fund advisors and their clients, researchers looked at the extent to which variations in asset mix were explained by client characteristics like risk preference, age, income and so on. As you would expect, the data showed significant differences in asset mix based on the client’s risk preference — the risk averse having only 40% in equities, and the most risk tolerant having 80% in equities.

But the strongest correlation wasn’t with client characteristics, but rather the advisor’s own personal asset mix for his or her mutual funds. Many clients select advisors who look like them in terms of age and income levels.2 How different are your client’s asset mixes from yours and do they properly reflect clients’ circumstances?

3. Raise the bar

As an advisor, you take on many roles. You’re a trusted educator, a navigator and a partner who provides customized financial advice to help clients build for the future, protect their savings and realize the retirement lifestyle they want. Take the next step with proactive contact. And it goes beyond the annual birthday card, Connor emphasizes.

Did you know?

Advised households save at twice the rate of non-advised households.1

“If you’re like a lot of advisors, you have many clients. Finding a way to make sure they’re clients for life can be tough. A successful business approach means adopting new technologies and processes in order to touch all of your clients in a timely and relevant way.”

Delivering a higher standard of service takes some effort but will yield a greater benefit for everyone. Think about connecting with clients more often to update their financial plans. You might have to embrace new service models that include expanded online interactions, data analytics and call centre outreach.

You know how to craft financial plans and help clients follow them, but most of all, you are driven by the satisfaction of seeing your clients achieve lifetime financial security. Keep the conversation going and unleash the value of your advice. Money for Life — Sun Life Financial’s customized approach to financial and retirement planning* — can help. You can also share the Shining Light on Advice fact sheet with clients or contact your Sales Director for more information.

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1 The Rules of Engagement, February 2013, commissioned by IIAC and conducted by Advisor Impact.

2 Retail Financial Advice: Does One Size Fit All? Foerster, Linnainmaa, Melzer and Previtero, 2015.
*Only advisors who hold CFP(Certified Financial Planner), CH.F.C.(Chartered Financial Consultant), F.Pl.(Financial Planner in Quebec), or equivalent designations are certified as financial planners.