Insights | 09.18.19
Does Planning Boost Advisor Production?
Advocates for financial planning often point out that planning allows advisors to further engage clients while deepening the advisor-client relationship and documenting the financial advice they provide. But skeptics have long wondered whether planning increases advisors’ production rates.
Since an advisor’s production is influenced by a variety of factors, determining the effect of planning has proved to be an elusive process.
Elusive until now.
To help determine the impact of planning, Raymond James Financial Services commissioned Kehrer Bielan to analyze the data of more than 1,000 individual advisors from 34 banks and credit unions. We were able to isolate the effect of planning by controlling multiple factors affecting an advisor’s production.
In addition to taking into account the size of the advisor’s branch territory and whether they were based outside the branch referral stream, we also considered each advisor’s tenure, assets under administration (including the composition and ROA), number of clients and access to sales assistance. We then used this information to predict the advisors’ production rates. The analysis explained 85% of the variation in annual production across the advisors.
When comparing the predicted rates for each advisor against their actual production, our results showed that, on average, advisors who created or updated fewer than two plans per month had lower production rates than expected. Alternatively, advisors who created more than eight plans each month significantly surpassed the predicted rates. Our study helps shed light on the importance of financial planning and how fully embracing the methodology can potentially benefit advisors’ production.
To learn more about how different levels of planning can impact production rates, the planning activity of the advisors in our study and the plans they produced, download our full study.
For additional information about our study and methodology, visit The ROI of Financial Planning.