this material is for institutional/broker-dealer use …€¦ · “dalar’s 20th annual...

THIS MATERIAL IS FOR INSTITUTIONAL/BROKER-DEALER USE ONLY. NOT FOR DISTRIBUTION OR USE WITH THE PUBLIC.


Value

“Price is what people pay, value is what they pay for.

You don’t get paid for the hour, you get

PAID FOR THE VALUE you bring to the hour.”

WARREN BUFFET


Today’s objectives

Define the real issues with fees 1

Begin the process of creating your personal value policy 2

Create a plan to take control of your personal brand 3


1987

ABC Brokerage Firm

John Doe

Stockbroker


1987


Federal funds rate, 1994–1995

6%

5%

4%

3% Mar 22 Apr 18 May 17 Aug 16 Nov 15 Feb 4

1994

3.25%

Feb 1 1995

6.00%


What is your value?

February 1999 February 2003


2014

June 2014 July 2014


Fees are always in the news


Money back? Really? What’s our value?

2014 / 2015 TV ads

“What if you’re not happy? Do they have to pay you back?”

“Nope.”

“Why not?”


Sound familiar?

Source: John Hancock Research, March 2010.

“Current market conditions require more, not less, work on my part.” FINANCIAL ADVISOR, 27 YEARS

PRODUCING SALES MANAGER, 19 YEARS

“My clients are more concerned and require more hand-holding than ever before.”

FINANCIAL ADVISOR, 11 YEARS

“I spend the same or more time per account than I did two years ago.”

FINANCIAL ADVISOR, 21 YEARS

“I deliver value in hundreds of ways for my clients, not the least of which is keeping them well positioned and focused on long-term goals.”


So why the fire sale?

Source: John Hancock Research, January 2013.

53% said their clients had questions about the value they received for their fees

11% said their clients objected to the fees they paid

32% said their clients referenced better offers

from the competition

53%

11%

32%

7 out of 10 advisors surveyed have cut fees


Other

Source: John Hancock Research, January 2013.

6% when conducting portfolio review

44% when outlining joint expectations

19% when defining goals and objectives

63% of advisors surveyed discuss fees at the beginning of the relationship

44%

6% 19%

Timing and Language


Why do your clients pay you a fee?

Strategy of a top producing advisor

“The value of our services is worth at least 3% of your assets under care with us annually.” 1


The value of advice

DALBAR Annual Study of investor returns

“DALBAR’s 20th Annual Qualitative Analysis of Investor Behavior,” DALBAR, Inc., 2015. Investor returns are calculated using data supplied by the Investment Company Institute that represents the change in total mutual fund assets after excluding sales, redemptions, and exchanges. This method of calculation captures realized and unrealized capital gains, dividends, interest, trading costs, sales charges, fees, expenses, and any other costs. The S&P 500 Index tracks the performance of 500 of the largest publicly traded companies in the United States.. It is not possible to invest directly into an index. Past performance is not indicative of future results. Sources: DALBAR’s 21st Annual Quantitative Analysis of Investor Behavior, John Hancock Investments, 2015.

Average annual returns, 1994–2014

5.19%

9.85%

Equity Investor S&P 500

Advisor Alpha

+4.66%



Strategy of a top producing advisor



Your value proposition

______% ______% ______%

______%

Comprehensive financial plan

Investment process

Risk tolerance and asset allocation

1 1

1

3



Strategy of a top producer


“Do you have any questions on our value?” 2

“Our goal is to far exceed in value what you will ever pay us in a fee.” 3


Putting a Value on YOUR Value

Duncan McPherson CEO, Pareto Systems

“How do you respond when a prospective client says "I’ve met with two of your competitors and both have offered to lower their fees to get my business.“

“Never Negotiate Your Value”


Your value proposition

______% ______% ______%

______%

Comprehensive Total plan

Investment process

Risk tolerance and asset allocation

1 1

1

3


Things advisors and clients agree on

Most clients and advisors agree that clients are seeking:

Personal attention and service

Proactive management of their account

Answers to their financial questions

Clients and advisors also agree that:

Clients want the advisor to provide an assessment of their entire financial situation

Clients’ risk tolerances and goals should be clear

Clients want to access the advisor’s knowledge, research, and ideas

Advisors should provide an asset allocation strategy


You do so much more for your clients Develop financial goals

Create a timeline

Understand risk tolerance and expected rate of return

Use data to analyze existing investments, and make recommendations about what to do going forward

Determine asset mix

Create a plan for retirement

Understand and communicate risks

Estimate expected rate of return

Help decide which investments to own in non-retirement accounts

Look for ways to reduce taxable income

Understand taxes incurred when they buy or sell investments

Identify how much they need to save

Provide access to many types of retirement accounts to use (IRA, Roth, 401(k), etc.)

Understand insurance—what type and how much (including life, long-term care, disability, and even property, casualty, and health insurance)

Manage an emergency fund

Explore what changes might improve their tax situation

Discuss leasing an automobile versus buying

Mortgage refinancing

Cash management

Commercial financing/lending

Vacation property evaluation


What do your clients and prospects value most?

Source: The VIP Forum’s Survey of High-Net-Worth Baby Boomers, The VIP Forum of the Financial Services Practice, 2010.

Correlation to client

loyalty

Type of advisor skill required

Strong

Weak

Technical Emotional

Knows a great deal

Is responsive

Can explain how products and services can help

Motivates me to take action

Easy to get along with

Looks out for my best interests

Understands the needs of those in my situation

Has experience Will disagree

with me

Straightforward about fees


The Value Book


But first, it starts with you

Ask yourself:

What is your brand?

STEP ONE


Who’s this?

Richard Simmons

http://nineteenthirtynine.net/wp-content/uploads/2007/08/simmons.jpg


Who’s this?


Your visibility is more important than your ability!


It starts with you


Is it a good answer? Is it the best answer?

Is it the same answer others on your team would give?

Ask yourself:

STEP ONE


It starts with you

What does your brand mean to your clients?

STEP TWO


Next, expand to other centers of influence

What do you perceive to be the greatest value I bring to our working relationship?

What do you believe is my greatest strength?

Why do you choose to work with me, even in challenging times?

Ask your clients, friends, family, colleagues, or favorite wholesalers. Consider an advisory council.

Ask them:

STEP TWO


Putting it all together

Frame your value

This is what makes YOU the Essential Advisor

“My best clients tell me that the greatest value I deliver to them is __________.”

STEP THREE


Take action!

Discuss fees at the start of every client meeting

Create a clear and consistent personal value policy

Define and project your brand and let us help you


John Hancock Investments

A trusted brand John Hancock has helped individuals and institutions build and protect wealth since 1862. Today, we are one of America’s strongest and most-recognized brands.

A better way to invest We search the world to find proven portfolio management teams with specialized expertise for every fund we offer, then apply vigorous investment oversight to ensure they continue to meet our uncompromising standards.

Results for investors Our approach to investing has led to a diverse set of investments deeply rooted in investor needs, along with strong risk-adjusted returns across asset classes.


More information

John Hancock Funds, LLC ▪ Member FINRA, SIPC

601 Congress Street ▪ Boston, MA 02210-2805 ▪ 800-225-6020 ▪ jhinvestments.com

NOT FDIC INSURED. MAY LOSE VALUE. NO BANK GUARANTEE. NOT INSURED BY ANY GOVERNMENT AGENCY.


MF147119 FEEPPT 9/13

For more information, contact your John Hancock Business Consultant at 800-225-6020 or visit jhinvestments.com

Clients should carefully consider a fund’s investment objectives, risks, charges, and

expenses before investing. The prospectus contains this

and other important information about the fund. To obtain a prospectus,

call John Hancock Investments at 800-225-6020 or visit our website at

jhinvestments.com. Clients should read the prospectus carefully before

investing or sending money.

A word about risk

this material is for institutional/broker-dealer use …€¦ · “dalar’s 20th annual...

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