In a shifting advice landscape, put your clients first

August 17, 2018

 
Noni Robinson

Noni Robinson
Head of Bank and Institutional
Channels for Vanguard
Financial Advisor Services

I’m Noni Robinson. I lead distribution for banks, asset managers, and insurance clients in Vanguard Financial Advisor Services™.

I hope to provide some new insights into the state of the advice industry and share how we work to help you and your clients succeed. Your thoughts, comments, and reactions are encouraged. Let's make this a two-way conversation!

A few weeks ago, I joined many of my Vanguard colleagues at our annual in-house advisor services conference. Each year, we take a few days to reexamine the state of the advisor market and discuss ways that we can better serve you and your clients.

Putting clients first

This year's conference focused on one of our key themes for 2018. We call it "Champion the client." The idea is really pretty simple. It’s about keeping clients like you at the forefront in everything we do.

As part of the conference, we engaged Calvin "Cal" Fussman, The New York Times best-selling author, writer-at-large for Esquire magazine, and storyteller par excellence, to share his perspectives and techniques for asking the kinds of questions that get the best answers.

Cal's maxim is simple: "When asking questions, first aim for the heart, then go for the head, which leads you to a pathway to the soul."

Why do I find Cal's perspectives on asking the right questions compelling? Let me explain by relating this to our Vanguard Advisor's Alpha® concept.

A shifting advice landscape

As you know, the fundamental nature of the advice industry is changing. The automation of advice—and technology more broadly—is disrupting traditional advice models, putting downward pressure on fees.

The automation of advice is disrupting traditional advice models

The automation of advice is disrupting traditional advice models

Sources: Vanguard and Cerulli Associates. Data as of December 31, 2016.

Fee pressure is causing many advisors to take a fresh look at their value proposition, including the critical importance of relationship management and behavioral coaching.

According to our advisor's alpha concept, advisors' value propositions should be based on their relationship-management capabilities, which are too often underappreciated. They are an essential component of building deep, lasting client relationships—the kind that help firms retain clients and assets for the long term.

Advisors need to embrace automation and shift their focus from portfolios to people

Advisors need to embrace automation and shift their focus from portfolios to people

Source: Donald G. Bennyhoff, CFA; Francis M. Kinniry Jr., CFA; and Michael A. DiJoseph CFA, 2018. The evolution of Vanguard Advisor’s Alpha:®: From portfolios to people. Valley Forge, Pa.: The Vanguard Group.

A recent Pershing study found that advisors who deliver value to their clients beyond asset management and basic investment guidance could maintain their fees and put themselves in a better position to drive their firms' long-term growth.*

Asking the kinds of questions that help you discover what motivates clients—including whom and what they really care about and why—is, as Cal would say, the “pathway to the soul.” As Cal explains, sometimes it's this simple: When meeting a client for the first time, a common icebreaker might be, "Tell me about yourself." While a client will surely provide information with his or her response, a better approach might be, "The last time you woke up at three in the morning, what caused you to wake up?" According to Cal, this is the kind of question that can trigger a response from the heart. I'd add that listening intently to clients' answers is equally important and is a practical way to deepen client relationships.

What do you see driving business growth in the bank or institutional advisory space? Post your thoughts, or any other comments or suggestions, and let’s make this an interactive discussion.

*Ross Snel, 2018. Pershing survey: No fee pressure for top advisors, April 17, 2018. Barron’s. (Advisor Center newsletter.) Retrieved August 3, 2018, from https://www.barrons.com/articles/pershing-survey-no-fee-pressure-for-top-advisors-1523639872.

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Notes:

  • Vanguard ETF Shares are not redeemable with the issuing Fund other than in very large aggregations worth millions of dollars. Instead, investors must buy and sell Vanguard ETF Shares in the secondary market and hold those shares in a brokerage account. In doing so, the investor may incur brokerage commissions and may pay more than net asset value when buying and receive less than net asset value when selling.
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  • Diversification does not ensure a profit or protect against a loss.
  • Investments in stocks or bonds issued by non-U.S. companies are subject to risks including country/regional risk and currency risk. These risks are especially high in emerging markets.
  • All investing is subject to risk, including possible loss of principal.

Noni Robinson

Noni Robinson is a principal and head of Bank and Institutional channels for Vanguard Financial Advisor Services™. She leads the sales teams as well as the distribution strategy development and execution for banks, institutional asset managers, and insurance companies. Prior to this role, she was head of Client Engagement in Vanguard Portfolio Review Department, where she led a team of investment analysts responsible for engaging with clients through topics on the economy, financial markets, and Vanguard funds.

Ms. Robinson earned a B.A. from Temple University and an M.B.A. from Saint Joseph's University. She holds FINRA Series 6, 7, 24, and 63 licenses and the Certified Investment Management Analyst (CIMA®) designation.

 

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