Improving adviser efficiency through analytics

By William Weidman | 28 July 2015

Given the independent, relationship-driven culture associated with wealth management, formal analysis of wealth adviser performance is often neglected. Advanced analysis of financial adviser data thus poses a huge opportunity for innovative firms to fully utilise all the information they already collect, further drive value in their business, and develop a strategic advantage in the growing industry.

Fortunately, most wealth management firms already have the necessary customer relationship management platforms (, for example) in place to regularly collect data on interactions between advisers and customers. Rigorous analysis of this data - for example, measuring the incremental impact of different sales tactics, costly hiring and training programmes, and other adviser activities - can help firms uncover strategic insights and empirically support decisions.

An advanced analytics solution can dramatically enhance adviser efficiency by helping wealth management firms determine the profiles of the most effective advisers, which sales activities advisers should devote time to, and which adviser activities can be aided with corporate resources.

1. Identifying qualities of high performing advisers

The first step in fully utilising the firm’s historical customer relationship management (CRM) data is to determine the factors that drive financial adviser performance. As is expected, no two advisers are identical. Each adviser is likely to have unique learning preferences, communication methods, and experiences that can affect current sales efforts and client relationships. A disciplined data-driven methodology can control for the natural differences between advisers, such as education, tenure, revenue generated, and geography, to accurately isolate the impact of differences in agent behavior on key metrics. This allows the wealth management firm to determine which adviser attributes have proven the most beneficial to sales growth. In doing so, wealth management firms can more efficiently and effectively recruit candidates and train advisers to maximise the power of their sales force.

2. Prioritising adviser sales activities

Once the value-driving factors of adviser performance are identified, analytics can further help wealth management firms determine which particular sales activities merit each adviser’s time and attention. Wealth management firms now have more channels than ever through which to connect with a customer. As such, determining the optimal sales activities mix for each account—in-person visits, phone calls, online sessions - can be quite difficult. Analytics are necessary to gain insights about which sales activities are most impactful for which customers. Advanced software solutions can quickly identify tactical or strategic shifts in adviser behavior and utilise this natural variation to determine not only whether a new tactic was effective, but also for which customers the tactic worked best. Such insights allow wealth management firms to assign the right advisers to the right accounts and better direct how advisers should be allocating their time once staffed.

To give an example, one leading global bank’s commercial banking division used APT’s Test & Learn software to analyse naturally occurring differences in individual bankers’ tactics and the resulting profit impact of these activities. The software showed that increasing in-person visits to commercial customers drove a 2.4% lift in revenue on average, and prioritising which customers were visited generated even greater impact.

3. Correctly leveraging corporate resources

Traditionally, financial advisers have been given tremendous autonomy in managing their client and prospect relationships. While many transactional and operational services have been centralised, there remain certain relationship management functions that can also be executed by centralised corporate groups to increase adviser efficiency. As the wealth management industry continues to grow and it becomes increasingly simple for the central organisation to interact directly with customers (e.g. through mobile apps and online secure messages), many firms are wondering whether some activities would be more effectively led by the central corporate organisation. Advanced analytics can help firms understand the incremental effects of corporate resources such as training programmes and centralised marketing initiatives.

Through APT’s work at a number of major financial institutions, it is clear that there is not a “one size fits all” solution to maximise ROI through corporate activities. For example, one large wealth management firm considered controlling client communications directly through the corporate marketing group, instead of allowing financial advisers to filter and customise communications. By testing the change with a subset of advisers, they found that some customers responded to the change more positively than others. In particular, corporate communications increased sales of certain products (Fixed Income and Managed Assets) and for certain customers (those with fewer products). With such actionable insights regarding customer response to communication method, the firm was then able to target rollout of the programme to reps whose clients matched these particular characteristics.

Similar insights on corporate action can be attained by analyzing the various employee education and training programmes offered to advisers. Because training programmes are both time consuming and costly, it is necessary for wealth management firms to understand the true impact of these development initiatives. Analytics can help uncover the incremental effect of a given programme to determine whether the programme drove value, and for which advisers it proved most effective. This can drive future adviser training strategy, including who should be trained within the entire sales force, how often those advisers should be trained, and whether refresher courses are necessary as well.

From frequency of customer contact, to training programmes, to product focus, wealth management firms have a wide variety of levers they can pull to improve the efficiency of their financial advisers. Ultimately, data-driven analysis is the only solution that enables firms to profitably adjust these levers with confidence. With so much to gain and so much data already available, strategically analysing financial adviser activity is not only smart, but essential, for efficient operations and sustained growth.

By William Weidman, Senior Vice President, APT

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