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The metrics used to measure success in the advisory profession, such as client satisfaction and retention, fall short in reflecting the true value of an advice practice. Despite high marks in satisfaction and loyalty, only a select few advisors are experiencing strong organic growth, highlighting a dissonance between perceived and actual client experiences. Recent data from YCharts, which revealed that 54% of clients changed advisors last year, reinforces this point.
To bridge this gap – and ultimately increase their firm’s value and referral potential – advisors can pivot towards more meaningful measures that accurately reflect the value and impact of their client relationships and advice. In my previous article, I explored in depth the need for the profession to transition from traditional metrics of success, and instead focus on a new paradigm where exceptional client advocacy, driven by deeper and more valuable advisor-client relationships, defines the best and truly remarkable advisory practices. This transformation from a sales- to an advice-driven profession is creating a more rewarding and sustainable path for advisors and their clients, reshaping the very definition of success in the industry.
In this installment of my series, I will explore practical strategies for advisors to embrace this change, focusing on fostering deeper client relationships and leveraging new metrics for a more comprehensive understanding of their practice's impact and valuation.
What makes an advisor’s practice remarkable?
At the heart of this transformation is the redefinition of what constitutes a truly great advisory practice. It involves moving away from the sales-focused practices of many advisors and instead fostering collaborative and co-creative working alliances grounded in mutual disclosure and trust. In such practices, advisors become more than financial consultants; they are guides, confidants and advocates, deeply invested in helping clients navigate their unique financial circumstances and achieve their long-term objectives.
An authentic working alliance is not just about extracting as much personal and financial information from the client as possible to make a recommendation. Instead, it focuses on equipping and empowering the client, teaching them what they need to know to make informed decisions that align with what’s most important to them.
