What Financial Advisors Should Expect from Distributors
Investment industry channels are undergoing a major metamorphosis. This is especially evident in the distribution channel where the transformation is being driven by financial advisors across all categories. From wealth managers and family offices to financial planners, advisors are seeking a new breed of distributor; one that understands their clients and can provide both products and strategies that help them meet their clients’ financial goals.
Say Goodbye to Product-Pushing Distributors
Distributors, who focus solely on championing their investment products, are on the way out. That product sales approach won’t cut it anymore. The same thing holds true for distributors who don’t take the time to get to know an advisor’s client base and are ill-equipped to offer not just the right investments, but also the right strategic direction. Distributors can no longer function, nor be perceived, as middlemen. They must elevate their role and stature as strategic partners with a vested interest in the success of the financial advisors with whom they align.
Say Hello to Strategic Distributors
At the core of this strategic partnership is the distributor’s ability to create strategies and messaging that conveys a broad and deep understanding of the advisor’s needs, as well as the needs of his/her clients. This requires the distributor recognize the different categories of advisors and how they serve their clients. For example, some advisors are financial-planning centric, while others take a more investment-centric approach. There also is another dynamic that strategic distributors realize. It is that, regardless of the client service approach advisors use, there is one universal truth that underlines all of their relationships with distributors. It is simply that advisors will only work with a distributor that can either provide products that align with their portfolio construction strategies, or can offer proven, yet differentiated strategies that address their clients’ financial objectives.
Strategy + Knowledge = Value Added
The distributor that can deliver strategy and information to financial advisors is the distributor that will deliver the added value that today’s advisors want from their partners. Whether that value comes in the form of a special report, a customized client recommendation, regular updates on existing products, new product information, guidance on portfolio construction, and/or support in client acquisitions, this value added is what will separate the successful distributors from the rest of the pack.
Simply put: the distributor that will be here for the long-term is the one that advisors can expect will deliver strategy, knowledge, support and have a clear understanding of what issues are driving clients’ decisions – from retirement goals, transfers of wealth and tax impacts, to philanthropy and socially responsible investing.