Podcast on Disruption sponsored by Sun Life

(Runtime: 12 min, 40 sec; size: 5.79 MB)

As the financial advice landscape changes and new technology comes into the fold, advisors still have competitive advantages. In this episode, the 2nd of a 3 part series, we discuss ways that advisors can build trust and deliver the advice clients need.

In the second of this 3-part series, Jillian Farrow, Director of Strategic Business Development at Sun Life, and Wayne Miller, AVP of Strategic Business Development at Sun Life discuss ways that advisors can build trust and deliver the advice clients need.
© Sun Life Assurance Company of Canada 2019

Text Transcript

Jillian: You’re listening to Advisor Insights, brought to you by Sun Life. I’m your host, Jillian Farrow, the Director of Strategic Business Developments Client Engagement Mandate. With me today is Wayne Miller, who is the Associate Vice President of the Strategic Business Development team. Wayne is an actuary by training and has held a variety of roles in his 30 year career at Sun Life. Wayne is a thought leader, a published author keynote speaker and has made it his personal and professional passion to lead the advice revolution. Today we’re going to be talking about the advice landscape, which is the second topic of a three part series. Welcome Wayne, and thank you for joining me today.

Wayne: Thank you for having me.

Jillian: So in this podcast we’re going to take an in depth look at some of the key findings and insights that we’ve learned from research about what clients are looking for with regard to advice and advisors. So let’s get right into it. Wayne, we know that there’s some pain points that clients have with our industry. Can you elaborate on some of these?

Wayne: Yes I can, in fact, we talked about some pain points in the first podcast. We’ll just sort of sum it up for the industry at large. Sort of four main pain points that are our problem points for us. The first one is the client isn’t an uneducated client, for the most part. We know for a fact that there’s a financial literacy gap in Canada and virtually around the world. It’s just not something that’s generally taught in school. So most Canadians would claim that they’re, frankly, financially illiterate. Not all, but certainly most. Certainly not at to a sufficient level to be able to do this stuff. So we need to close that literacy gap. The second issue is that the industry from what I’m told, and from what I’ve seen, is it’s largely made up by sales people as opposed to advisors. And that’s always been the case.  And so a lot of Canadians would have had an exposure to a salesperson rather than to an advisor, and those that have had exposure to a salesperson is not very happy. Those that were exposed to a true advisor are very happy. But if more people were exposed to a salesperson that’s just going to continue the perception of the industry. The third pain point is when buying financial products through an advisor, there’s compensation paid to the advisor. The existence of that compensation is either negatively impacting performance, in the case of investments, or negatively impacting premium or price in the term, in the case of insurance. And so the client is ultimately going to be comparing the value that they’re getting from the advisor, to the cost of having the advisor. The value better be higher than the cost. For all the sales people, the value is probably not higher than the cost, and therefore that’s going to be a big pain point a problem for the sales people. And then finally, in the case of insurance, always been referred to as a product category that’s sold and not bought. Even though virtually every Canadian would be better off financially if they had insurance in place to protect the risk that they’re facing. The fact that they’re not buying the insurance, it has to be sold to them, is a problem. I often wonder, does it always have to be that way or can we solve this problem by more education. Close the literacy gap and have people a little bit more open and understanding of how the insurance actually helps their financial situation.

Jillian: And I think they’re worth paying attention to, for sure.

Wayne: Yeah.

Jillian: So we’ve done some research into what Canadians are expecting, both from the advice that they’re receiving but also from their advisors. What do some of those insights suggest?

Wayne: Yeah, we did a lot of research in this area. In terms of what your question is, what are the clients expecting, the reality is they’re expecting very little because the perception of advisors are not very good. So they’re expecting very little. What they did tell us through the research is very insightful as to what they actually want or what is the best practice. What’s the experience they’re looking for. And sort of went like this: to actually sit down with an advisor there needs to be some base level of trust. And, it could be as simple as they work with a large reputable organization that is trusted. That’s a kind of an easy one. You just by association, there’s some trust. But if you were Wayne Miller Financial or something, and nobody’s ever heard of Wayne Miller Financial,  that initial level of trust doesn’t exist unless they Googled me and found something very compelling. So my online presence would have to make up for the lack of being with a large reputable organization. So after that, they’re saying: you gotta be able to be clear on what we call immediacy. In other words, from the client’s perspective, what’s in it for me. I gotta be ready. It’s gotta be the right time for me to be talking about anything. And if it’s not the right time, let’s not talk. Let’s just defer it. Convenience. So, if I’m ready to get some advice, it has to be convenient. I can’t jump through a whole bunch of hoops just to get to that advice. The path of least resistance is going to be the one that prevails. Once we get past that, it comes down a few different things. They’re saying: “I’m looking for expertise and knowledge”, not only to verify that the advisor actually is qualified to deliver advice. But they can also teach me what I don’t know. I’m financially illiterate and so if the advisors helping educate me then that’s a very good thing. Then the next thing is personalization. I was very happy to see this. That there’s a sense that a lot of advisors are ultimately pushing a product or concept, and the feeling is that that product or concept was pushed on the previous client and prospect they talked to. That’s not a good thing. They want an advisor that will actually sit down, understand, ask questions, uncover what the clients goals and dreams are and then provide a set of recommendations that are truly personalized to the client. It sounds like each set of advice is unique to that particular client. So it’s got to feel that way. It’s got to be goals based. And, then, obviously results is important. So over time, am I getting what I was offered the first place. So on investment side, is the rate of return volatility comparable with what we were talking about at the beginning of the exercise. On the insurance side, it comes down to peace of mind. Do I feel a lot less anxiety now that I’ve had certain risks in my life protected through insurance? And if those three things, the expertise, the personalization and the results happen, the result of that is trust, in short. But it’s the kind of trust that leads to a client for life, frankly. That clients never leaving if they get that experience. The more of those elements that they get in their experience with the advisor, the more likely they’re staying for life.

Jillian: So I’m definitely not surprised by any of these expectations and they all do seem reasonable. And it’s really not rocket science for any advisor to deliver. So you said that trust is the pillar and trust must exist for clients to hear advice, and so it sounds like that’s really the root of it. How can we advisor deliver on that? How can an advisor become that trusted source to their clients?

Wayne: Well, I answered some of that in the previous question. That whole knowledge and personalization and results. So I’ll just express it in a slightly different way. Number one: you can’t push product. And you certainly can’t do it in your first meeting. So just don’t do it. Never do it in fact. Secondly: listen to the client. Ask questions. Discover what their needs and goals are. They might not even know what they are, so helping ask the right questions to uncover those. Very important. Then the education. You can help close their financial literacy gap. They’re going to be very grateful for you having done that. And then sort of beyond those three things, it comes down to just understanding sort of a deeper part of the human interaction with clients. Understand that there’s a lot of differences between men and women, so you can’t treat them exactly the same way in terms of your relationship with them. Keep hearing this phrase, ‘know your client’, but it’s more than know your client. Know your clients’ family. Not just children, but also the parents. Understand the full family nest egg. Then, at the end of the day, you’re providing some advice, but not all clients are going to follow the advice. Certainly not exactly when you want them to follow it. So understanding why people don’t act on the advice that they’re given. So you’ve got to be their personal coach. Sometimes it might be that it’s just not the right time for them to act on it. So be patient but don’t just walk away. If you’re trying to go through a physical fitness exercise and have a personal trainer, I’ve never done this myself, personally, but I’ve certainly seen it, those trainers aren’t just letting you say “I just want to stop”. They’re saying “You’ve got to do this. You have a goal in mind and if you want to achieve the goal you have to do the things that I’m telling you, you need to do”. So as an advisor you can’t just walk away when they say “No”. You gotta hold their feet to the fire. If you’re doing all those things, or even some of those things, the result is a client for life.

Jillian: Thank you Wayne! So just to summarize this podcast, a couple of key learnings and takeaways for us:  we know that trust is really your competitive advantage. Especially during a time of disruption. Trust, as we know, can be gained and it can easily be lost. So always be aware of how you can build trust with clients and I think Wayne’s given us some great ideas today. We also want to think about how you can provide the best client experience possible and deliver on those client expectations that you discuss. So find ways to highlight your expertise and knowledge, demonstrate positive results and really personalize and tailor the advice that you’re providing to each of the clients. So thanks again Wayne for joining us on the show. This was part two of our three part series on disruption in the financial services industry and the landscape of advice. So please stay tuned for the final part of the series, which focuses on the future of financial advice. And just a reminder to access this and other podcasts go to sunlife.ca/podcast and we look forward to having you join our next one.