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How to navigate the changing advisory industry

May 31, 2017


It seems like a tough environment for advisors right now. The changing regulatory environment, media controversies, increasing client expectations and the debate around fees – all are combining to place pressure on those operating in the industry. But, as with any challenge, advisors should be trying to find ways to turn the current situation to their own and their clients’ advantage.

“There is definitely more awareness about management costs and what people are really paying, and more emphasis on proving value,” says Grant White, an Investment Advisor at National Bank Financial. “Advisors are being forced to articulate, and learn to articulate, their value a lot more, which is a good thing for the industry and the consumer.”

White has noticed a shift in how clients think about fees and how they are calculated. White recently had a client ask him if a mutual fund was a front-end or back-end load fund (they were, in fact, no-load). It’s a type of conversation that simply wouldn’t have happened in the past because the vast majority of clients wouldn’t have known the difference between the types of funds. But, with commissions such a hot topic in all areas of the media, clients are more aware than ever.

“It’s a good thing, I’ve always been an advocate that better education will help people make better financial decisions about their own situation,” White says.  “I still think there is room to go in all of this because clients do not have enough awareness around what services they should be getting for what they’re paying. There is still a disconnect there, people may know they’re paying 1% or 1.5% but they don’t have any comparison as to what they should be getting for what they are paying.”

White believes advisors who are simply good salespeople will struggle to adapt to changes in the industry. He also encourages advisors to start open discussions about fees and be confident in what they are charging. “If you are providing value, then you shouldn’t be afraid to charge for it and you should be able to articulate what that value is,” White says. “A lot of advisors just can’t do that in an effective manner and that’s as good as not being able to talk about it at all. If you can do those things, you should be just fine. Most clients will not second guess an advisor on what they are charging as long as you present a confident approach.”

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