11.09.21
Growth Beyond the Branch – Necessary Changes in Financial Advising
by: Irene Yeh, BISA Staff
By this point, the pandemic has made one thing clear: change is necessary. Various industries have had to make adjustments to accommodate a different world with new demands. The finance services field is on the same boat. As we continue traversing through this limbo of a global pandemic, we must also look towards the future and plan what to do in a post-pandemic world.
COVID-19 caused many banks to close down branches, resulting in increased uses of digital services. However, this does not mean that digital banking has taken over traditional banking. Bank branches still play an important role as a place for clients to get advice and solve their individual problems. As businesses slowly open back up, banks must take this time as an opportunity to rethink their branch footprints.
During BISA’s November 4 webinar “Growth Beyond the Branch: The Future of Bank Investment Sales,” Bill Whitt, strategic advisor of Aite-Novarica Group, shared that “branch traffic has fallen off dramatically, but the quality of referrals has actually gone up.” This is an indication of a changing environment, including a need for a new type of financial advisor.
The new generation of FAs must be entrepreneurial and flexible. During the pandemic, as more branches closed down and customers and clients increasingly turned to digital, FAs found themselves with less referrals, thus forcing them to self-source their own revenue. On average, 59% of FAs self-sourced their own revenue, with only 21% making up referrals from licensed bankers and 15% from other branches. As Whitt shared, “The bankers really, really need to trust the FA” to be able to conduct business with clients.
In addition to being more proactive in their business sourcing, Whitt advised that FAs must also understandably be tech-savvy so that they can capitalize on the increasing use of digital banking, as well as help facilitate its growth. They must be comfortable holding virtual meetings, including video calls and phone calls, as well as be familiar with new applications and programs. Digital selling is also another must, with social media becoming a new platform for successful prospecting and sales.
High unemployment during the height of the pandemic also caused clients to be more self-aware of their finances and an increased demand of comprehensive wealth management. Whitt reported that clients are no longer “looking for straightforward investment solutions, but they’re looking for advice more broadly around all their wealth needs, and they want to understand how the package fits together.”
This means that FAs must not only approach clients in a more holistic way in order to meet their needs but also to be more planning-oriented. They must understand the goal(s) of the client and build out a financial plan that adheres to their needs.
Finally, there is a strong need for FAs to have a close relationship with branch staff and banks. This is so that the banks are comfortable with providing referrals, as well as the need for FAs to coach and motivate bankers despite lower branch traffic.
As we head straight towards a post-pandemic world, change is a must. We owe it to our clients to adapt so that we can continue to serve their needs, alleviate uncertainty and help them navigate through unknown financial waters.
The November 4 webinar “Growth Beyond the Branch: The Future of Bank Investment Sales” was an extension of the 2021 research report on the future of banking that BISA conducted in partnership with Aite-Novarica Group. All BISA members have complimentary access to the full research report. To learn more about becoming a member of BISA and obtaining this report, contact bisa@BISAnet.org.