oechsli institute 2010 report -the new world advisor

The Industy’s Elite - Based on Oechsli Institute Research on:v Financial Advisorsv Affluent Investorsv Financial Teamsv Sales Management

Excerpt from 2010 Comprehensive Report

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NEw wOrLd AdvISOr

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We have been experiencing a crisis of epic proportions. The world of financial services has been shaken to its core, financial institutions have gone bankrupt, others have been forced to merge and change identity, and the retail financial advisor has been left to deal with their affluent clients who lost significant amounts of their personal wealth as well as their trust of the financial services industry.

As we paraphrase an excerpt from the Harvard Business Review, reflect on your professional world; in times of crisis people change how they think (attitude) and behave (act), from which evolve a new set of societal norms. It is to that end that we wanted to know how the affluent client / financial advisor relationship has changed, if at all. There were a number of questions we wanted answered…

NEW WORLD ADVISOR

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New World Advisor \noo wurld ad-vahy-zer\ n1: A financial advisor who is exceeding today’s affluent investor’s expectations

in the 16 criteria deemed most important by the affluent (2009 Oechsli Institute research).

2: A financial advisor who excels at attracting, servicing and developing loyal affluent clients.

Synonyms: elite, high performance, upper echelon, world class

“In times of crisis, people’s behaviors and perspective change irrevocably. As we begin to emerge from a worldwide economic collapse, it will be critical that business leaders understand what the new norms are – and most important – how to adapt.”

Source: Editors, special issue Managing in the New World, Harvard Business Review, July-August 2009

*Excerpt from The Oechsli Institute's comprehensive New World Advisor Report.

NewWorldAdvisor

Through compilation of all this research, we’ve been able to develop a clear profile of the New World Advisor, a term that exemplifies the qualities of today’s elite financial advisors. This new set of norms is now a requirement for any financial advisor who wants to succeed in this ever-changing world of the affluent.

Let’s start with a quick overview of the seven factors that make up this New World Advisor:

1. Leadership

Top advisors are leaders. Like every strong leader, they have superb communication skills which go hand in hand with masterful sales skills. Today’s best advisors are masters at inspiring and directing fellow team members, clients, prospects, referral alliance partners, and anyone else with whom they come into contact. They are masterful sales people with skills so refined that although they are omnipresent, they are virtually seamless. In some capacity, their leadership is always present, and one could make an argument that they are always selling.

2. Practice Management

Practice Management is the glue that holds a practice together. Without the proper policies and procedures in place, the right people in the right roles with the right responsibilities, and an atmosphere of continual improvement, clients, team members and strategic partners all suffer – and none stay around to suffer very long. New World Advisors take practice management seriously and are always striving to improve. They operate much more efficiently and professionally than the average financial advisor.


NEW WORLD ADVISOR


3. Wealth Management

Accompanying these new “societal norms” are new expectations of the wealth management services to be provided. Gone are the days of lofty promises. Now the focus is on the timely and professional delivery of services promised. Regardless whether a particular wealth management solution is time consuming or profitable, New World Advisors deliver. The affluent want a solutions provider to oversee the multi-dimensional aspects of their family’s financial affairs.

4. Business Development (Affluent Client Acquisition)

New World Advisors excel in affluent client acquisition. They understand the affluent, have loyal affluent clients, and have mastered the art of selling their services to the affluent. They are very adept at being able to penetrate their affluent client’s centers-of-influence. However, our research indicates that the average financial advisor isn’t marketing at all, and those who are marketing are either engaging in the wrong activities or lack the skills to execute the right activities the right way. This New World Advisor component is based on a small cadre of rainmakers who have been extremely successful in bringing new affluent clients in today’s challenging environment.

5. Loyal Clients (Affluent Loyalty)

Recent events have put a serious stress test on client loyalty. The average financial advisor has lost clients they never thought they would lose. Yet the major reason for losing these good clients was poor service, not investment performance. This is a major ‘aha’ for many financial advisors. Performance is important but only one of many criteria today’s affluent investor consider important. The average advisor could strengthen loyalty with every client interactions with more attention to detail and a better understanding of today's affluent investor.


NEW WORLD ADVISOR


6. Balance (Positive Energy – Good Health)

New World Advisors understand the importance of maintaining balance in their lives. They pay close attention to their health; both mental and physical. They do not harbor unnecessary stress and although they are in no way pleased about the current financial crisis, they are not accepting the blame or harboring guilt over the decline in their clients’ portfolios. They are proactive, spending quality time with their clients, implementing recovery strategies, and have remained extremely active in every aspect of their lives. The old adage; “If you really want to get something done, give it to a busy person” holds true for these elite advisors. They make time to exercise, eat properly and spend time with their families. As a result, they are more calm and confident under pressure, their mind is clear, and they exude positive energy.

7. Life-Long Learner (Knowledge Worker)

Guiding and advising affluent families through this financial crisis requires a depth and breadth of knowledge. Elite advisors are true knowledge workers. They are open minded, understand the nature of this crisis and develop recovery strategies for their clients. In today’s Internet world of information overload, these advisors understand that they must go much further. New World Advisors transform information into useful knowledge and then when appropriate, communicate this knowledge to clients, prospects and team members. This requires old-fashioned hard work. Life-long learning is not for the lazy or the close minded.

Much effort has been devoted in attempting to keep this paper user-friendly and easy to understand. However, in many ways, it serves as a metaphor for the sea-change in the affluent client / financial advisor relationship. Like this report, it is truly multi-dimensional, which characterizes the New World Advisor.


NEW WORLD ADVISOR


You will discover that these components are inextricably linked and in many ways

inter-related. Our intention is to create a context, a workable framework within whichfinancial advisors can both understand and use as a model to assist them in being able to address the needs of today's affluent investor.

Today’sAffluentInvestorReality

The professional life of financial advisors has become more complex. Today’s affluent investor expects a lot. As the chart below illustrates, they want a solutions provider for the multi-dimensional aspects of their family’s financial affairs. The 16 criteria they consider important provide the “context” for financial advisors to meet these expectations.

There is a flicker of light at the end of the dark tunnel through which the financial services industry has been struggling. A small group of financial advisors have been able to not only meet, but in many instances exceed affluent client expectations on the majority of these 16 criteria.


NEW WORLD ADVISOR


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94%

94%

93%

93%

92%

92%

92%

91%

89%

87%

85%

83%

81%

79%

76%

71%

Providing clear andtimely communication

Resolving problems quicklyand to my satisfaction

Being focused on overseeingmy family’s financial affairs, not

marketing his/her practiceMeeting my investment

performance expectations

Possessing a comprehensive breadthand depth of industry knowledge

Always having my family’sbest interests behind everyfinancial recommendation

Fully disclosing all fees

Keeping me informed of anyevents that might impact

my family’s finances

Delivering high-level personal service

Caring more about methan just my investments

Fully understanding myfamily’s goals and needs

Helping me create and executean up-to-date formal financial plan

Developing andcommunicating a financial

recovery strategy for my family

Coordinating all of my family’s investment decisions

Helping me organize andkeep up-to-date all my

important financial documents

Using outside experts (specialists)to help with other financial areas

16 Most Important Factors for Financial Professionals

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NEW WORLD ADVISOR


However, as the Gap Analysis chart below graphically communicates, the majority of financial advisors are failing to meet these affluent expectations.

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Performance vs. Importance Gap Analysis

Keeping me informed of any events thatmight impact my family’s finances

Providing clear and timely communication

Caring more about me than just my investments

Meeting my investmentperformance expectations

Being focused on overseeing my family’sfinancial affairs, not marketing his/her practice

Helping me create and executean up-to-date formal financial plan

Always having my family’s best interestsbehind every financial recommendation

Coordinating all of my family’sinvestment decisions

Developing and communicating afinancial recovery strategy for my family

Possessing a comprehensive breadthand depth of industry knowledge

Resolving problems quicklyand to my satisfaction

Helping me organize and keep up-to-dateall my important financial documents

Fully disclosing all fees

Delivering high-level personal service

Fully understanding myfamily’s goals and needs

Using outside experts (specialists)to help with other financial areas

Very Important Performed Very Well

39%

93%42%

91%47%

93%

50%

94%52%

87%46%

83%42%

92%52%

79%

38%

81%41%

92%54%

94%56%

76%40%

92%56%

89%

55%

85%52%

71%

0 100


NEW WORLD ADVISOR


SurveyMethodology

There is no question that the landscape of the financial services industry is in the midst of a radical change. This change has created a unique opportunity for any firm, financial advisor, or financial team that is paying attention and making the right strategic moves. For this opportunity to become reality, the actions of firms, advisors and management must be aligned with the wants and needs of affluent investors.

In an attempt to address all of these changes, this report is comprised of four independent studies conducted by The Oechsli Institute. We felt that it was imperative to research not only financial advisors, but also affluent investors, financial teams, and sales managers. As you read through this report you will find data from four sources:

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Definition of Terms:We thought it might be helpful to define a few of the terms we’ll be using throughout the report:

Financial Advisor – any financial advisor, financial planner, financial consultant or team of such professionals who renders investment advice and financial planning services to individuals and businesses.

Affluent – This report is based on the research we’ve conducted on investors with between $500,000 and $10,000,000 in assets.


NEW WORLD ADVISOR


AbOUT THE OECHSLI INSTITUTE

The Oechsli Institute, founded in 1978, specializes in helping the Financial Services Industry improve its ability to attract, service and develop loyal affluent clients. Their research based performance coaching and training programs have been become the standard within the industry. The Oechsli Institute does ongoing work for nearly every major financial services firm in the US.

PartialClientList

Matt Oechsli and his associates remain in high demand for keynote speeches and workshops. When not immersed in research projects, they spend most of the week traveling to national conferences, industry events, and other speaking engagements. Every program they conduct, every coaching session they hold, and every product they create is research based, action oriented,


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Coldwell Banker Pioneer Investments BlackRock IMCA Securities of America Wells Fargo ADT Jackson National Life Wells Fargo Sun Trust Deutsche Bank Alex Brown

Merrill Lynch Morgan Stanley Wachovia Securities Smith Barney UBS Sotheby’s Raymond James Linsco/Private Ledger ING Nationwide Financial Bank of America Edward Jones


and street tested.

PartialListofOechsliInstituteServices

Keynotes and WorkshopsThe Oechsli Institute conducts countless speaking engagements every year — all customized and tailored to your organization and time frame. All the information presented is research based, action oriented, and street tested.

For more information contact [email protected] or 800-883-6582.

Rainmaker WeekendsRainmaker Weekends are 2-day action packed workshops for sales professionals who are serious about acquiring affluent clients. Learn how to better attract, service, and retain affluent clients — all based on 7 years of comprehensive research. These Weekends involve role-playing, specific do’s and don’ts, all of which are important for affluent sales success.

For more information visit www.RainmakerWeekend.com or call direct 800-883-6582.

Performance CoachingThe Oechsli Institute conducts very personal, one-on-one coaching with individuals and teams who want to improve their ability to attract, service, and develop loyal affluent clients. Performance Coaching clients work in collaborative relationships with a certified coach, are committed to action, and eager to grow.

Complete our Business Profile for a free consultation at www.oechsli.com/businessprofile or for more information call 800-883-6582.

Customized Research ProjectsThe Oechsli Institute conducts ongoing research projects on Elite Financial Teams,Rainmakers and the affluent. Contact us directly to learn more about our research collaboration process and how we can work with your firm.




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©2010 The Oechsli Institute. All Rights Reserved. No part of this document may

be reproduced or transmitted in any form, by any means (electronic, photocopying,

recording, or otherwise) without the prior permission of The Oechsli Institute.

The Oechsli Institute

[email protected]

P: 800.883.6582

F: 336.273.2342

www.Oechsli.com


oechsli institute 2010 report -the new world advisor

Economy & Finance