COMPREHENSIVE FINANCIAL PLANNING.......A COMPETITIVE ADVANTAGE?

ethicSurvey finds a growing culture of planning among Consultants.

Financial planning: it's a term increasingly being used in the financial services industry. But what does it mean, exactly?

Last fall, Investors Group's Research department and Advanced Financial Planning Support worked with Advisor Impact, a company specializing in research and education for financial advisors, to ask a representative sample of Consultants about the role that financial planning plays in their individual practices.

"Financial planning, in the context of this study, refers broadly to creating a long-term path for clients to help them reach their goals, as opposed to focusing on products and services in a vacuum," says Julie Littlechild, President of Advisor Impact. "And the numbers suggest a definite financial planning culture at Investors Group," she says. "This is good news, because the industry is moving at an increasing pace towards a financial planning model."

The financial planning study found that Investors Group Consultants offer both existing and prospective clients a comprehensive solution to meet their financial needs. They do this because they believe this approach is valuable to clients, explains Littlechild. And, with little exception, Consultants plan to expand the scope of financial planning among their clients.

"We have a distinct advantage over many firms in that Investors Group Consultants recognize that offering financial planning translates to substantial benefits both to the client and their practices," says Debbie Ammeter, Vice-President of Advanced Financial Planning Support. "The majority of competitor firms now provide some tools to support the financial planning process, but their advisors do not work from a strong culture of planning.

"There is a clear window of opportunity in the marketplace with respect to offering a more comprehensive financial solution to clients. Based on this research, Investors Group appears to be well-positioned," says Ammeter.

The comprehensive financial planning concept is still a new one for many clients. As clients come to expect financial advisors to prepare plans for them, the ability to provide a financial plan is only a competitive advantage if clients can distinguish between a good plan and an inadequate one, says Littlechild. In order to ensure that this is a competitive advantage, advisors will need to look at financial planning in the context of the total "client experience," including every point of contact associated with the planning process. This will be the driving force in setting firms apart.

Investors Group Consultants said they differentiated their financial planning offering from that of competitors by providing more advanced and extensive financial planning, having access to experts and specialists, and by having a stronger focus on implementation. "Consultants can strengthen their relationships with clients by knowing and fulfilling their clients' financial planning needs. Putting the focus on a long-term written plan gives Consultants and clients something to focus on regularly, instead of looking at investment performance for the past quarter only," suggests Ammeter.

The Consultant experience across the country confirms the benefits of financial planning to clients. Surveys of consumers back this up. A November 2001 Decima survey found that people who have financial plans are more confident about their financial stability and their future: 42 per cent of those with a plan were very confident that they would reach their financial goal for retirement, compared with only 24 per cent of those without a plan.

"None of this surprises Advanced Financial Planning Support," says Ammeter.

"We know that financial planning serves as the best foundation for establishing and developing enduring client relationships. Put all of this together and it is clear that planning pays!"

Investors group.