To whom much is given, much is expected. This axiomatic phrase might be the best one used to describe the situation of many financial professionals and advisors, as pay raises were widespread in the industry last year. It turns out, however, that a number of firms also feel financial advisors have lots of room for improvement, the results of a new study suggest.
Last year, financial professionals saw their base salaries rise approximately 3.6 percent, according to recent analysis conducted by the Association for Financial Professionals, up slightly from the 3 percent overall average for the entire year.
Bonuses were more the norm than the exception as well, as three-quarters of organizations awarded earnings on top of base salaries thanks to quality performances.
"3 in 4 firms awarded bonuses last year."
Specifically, 75 percent of the 3,000 firms that were polled gave out bonuses to workers. During the same period in 2014, approximately 72 percent made bonuses available and 71 percent in the immediately previous 12-month stretch.
Leadership is lacking
At the same time, though, many believe that financial professionals have yet to master the skill needed to thrive, the poll found.
For example, 45 percent of respondents said their workers didn't project an appropriate level of leadership. The same was said for their people skills, with 45 percent saying these were lacking. Approximately 4 in 10 indicated poor planning was also preventing advisors from more quickly ascending the performance ladder.
Jim Kaitz, AFP president and CEO, said both financial professionals and their employers should be pleased with what they've accomplished, but at the same time, they ought not rest on their laurels.
"Finance professionals should be pleased that their organizations value their efforts enough to award salary increases and bonuses," Kaitz explained, "but more attention needs to be paid to addressing the critical skills gap. When organizations provide additional training and education for their staff, everybody wins."
Financial advising and insurance selling is ultimately a performance business, where earnings hinge on how much business is drummed up. What separates the best from the rest may depend on the sales approach used, and a new study turns the traditional form on its head.
Study suggests insights should come first
"Offering an insight makes clients more receptive to suggested solutions."
The analysis, conducted by marketing and skills training company Corporate Visions, found that instead of posing a question to clients first, followed by an insight after the response, the reverse order may actually be more effective.
Tim Riesterer, chief strategy officer at Corporate Visions, said that this sales approach is called insight-led selling.
"Our research confirms that sharing an insight first acts as an 'anchoring effect' that, in effect, gives the prospect permission to admit more pain and makes them more open to a persuasive message about a solution to that pain," Riesterer explained.
He added that this shouldn't suggest that questions aren't important. Being inquisitive is critical to establishing what clients' problems are and how they can be solved. However, a more effective strategy is to offer up an insight, which will stimulate conversation, then ask questions that help to further define the pain point or points.