Questrade’s ‘powerful’ ads put advisers in the spotlight
From the new mom who dumps her financial advisor because she “can’t keep paying a fortune in fees”, or the couple commenting on the “10 minutes, once a year” of expertise they think they get from their A future former financial advisor, Questrade Inc.’s ads, which challenge advisers for the fees they charge and the services they provide, have become all too familiar.
The ads, some of which have been running for at least three years, are “powerful” as they help raise investors’ awareness of the cost of financial products and services, said Norm Trainor, founder and CEO of the Covenant Group in Toronto. , which offers coaching to advisors.
Questrade and other robo-advisers appeal to investors who want to pay lower investment fees and who may not think having an advisor to deal with face-to-face is worth it.
“The value equation in financial services is changing,” says Trainor. “It’s no longer about putting someone in a particular investment. It is about the value the client gets from the relationship with the advisor.
Advisor value proposition
This shifting value equation, combined with the unappealing portrayal of the profession in Questrade ads, has made many advisers work harder to showcase their worth, put their socks up, or both. Some may also need to consider whether customers looking for ultra-low fees are a good fit.
“Ads force advisors to look at their business models and ask, ‘Am I showing value for these fees?’ Says Simon Tanner, senior financial advisor to the Dynamic Planning Partners team at Investia Financial Services Inc. in Vancouver. “If you just show your client that you spend 10 minutes a year with them, you’re probably not worth it. Or, if it’s from a business perspective, it only makes sense to spend 10 minutes a year with [these clients], then they are probably not suitable for your practice. Counselors should be able to tell.
The discussion about the value of service should take place early in the client-advisor relationship and continue, says Tanner. He recommends that advisers tackle the cost issue head-on by highlighting the work that they believe is worth the extra cost.
For example, advisers may designate Questrade announcements as an opportunity to discuss services they offer that a robot advisor cannot, such as tax saving strategies and estate planning advice. Advisors can also play a major role in preventing clients from investing with their emotions, such as selling when markets fall or buying speculative stocks.
“At the end of the day, the computer isn’t going to sit down and talk to you when the markets are tough… or assess your tax situation… or give you personalized, one-on-one professional advice that helps you achieve your goals,” Mr. Tanner.
Ron Fox, President and CEO of Glidepath Portfolio Services Inc., a Toronto-based investment advisory and portfolio management firm, “can’t help but cringe” when he sees examples of the wrong. service or behavior in his profession – some of which is dramatized in the advertisements.
“The Questrade ads have been somewhat controversial for some advisers who have actually been rocked by complacency,” Fox says. “Consultants who display the kind of complacency and arrogant, self-centered behavior displayed in these advertisements do not deserve their clients. … They just dropped the ball on their serve and let their customers down.
In contrast, the ads don’t threaten advisers who do a good job serving their clients, Fox says. The spots, which air frequently on channels such as BNN Bloomberg, should also inspire advisers to reflect on the services they regularly provide.
“[Advisors should ask themselves] “Am I really doing the best job I can for my clients? Says Mr. Fox. “If the answer is no, then advisers need to seek out and understand how they can do better or risk being irrelevant in the minds of their clients and functionally replaced by an alternative service or advisor, which is the angle. marketing that Questrade encourages.
Communicate the value of service
If a client questions the value of an advisor, “then you haven’t done a good job of demonstrating that value,” says Trainor.
He recommends that advisers have a “customer service statement,” which is agreed upon with each client. The statement should include objectives when dealing with customers and procedures regarding such situations as confidentiality, handling of complaints and inquiries and, of course, the policy regarding commissions and fee structures.
“If advisors don’t have a clear statement of caring for clients and aren’t able to illustrate their value, they run the risk that the clients they have are going to leave,” says Trainor.
Finally, advisers should never criticize Questrade ads, or the competition in general, he adds. One reason is that the client, or their friend or family member, may have an account with the other firm. “You never win by criticizing the competition.”
Instead, Mr. Trainor says advisers should recognize a competitor’s claims and then point out the advantages they have over those competitors.