The ROI of Financial Planning

The ROI of Financial Planning

 

In a landmark 2019 study, Kehrer Bielan obtained detailed data on the demographics and performance of 1,407 advisors from 34 banks and credit unions, and merged it with data on the advisors’ planning activity obtained from MoneyGuide.  Using multivariate analysis, we were able to isolate the impact of planning on advisor production from many of the other factors that influence an advisor’s performance.  The findings demonstrate conclusively that embracing financial planning does indeed drive GDC.

An important insight from the analysis is that GDC increased exponentially with increased planning activity.  And that an advisor dabbling in planning has little to gain much from doing a little more planning.  Management needs to find ways to get advisors over this barrier to embracing planning.

In the intervening years, advisors in banks and credit unions have bootstrapped their planning activity, and we have added more institutions and advisors to this database.  We propose to revisit this analysis with fresh data to determine whether there has been a shift in how planning impacts advisor production, and to examine the influence of planning on other advisor and firm objectives, including asset acquisition, advisory revenue, and revenue per client.

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