Participants:
Steve Wershing
Julie Littlechild
Jeff Marsden
Julie Littlechild:
Welcome to another episode of Becoming Referable, the podcast that helps you be the kind of advisor people can’t stop talking about. I’m Julie Littlechild, and on this week’s show Steve and I are joined by Jeff Marsden to look forward at the industry and how current trends will impact how we generate referrals. Jeff is the chief product and strategy officer for Xtiva Financial Systems, which provides the industry with sales performance management and incentive compensation management technology systems.
Now, Jeff has a great strategic mind, so we talked to him about some of the trends that are impacting how advisors will deliver advice and create a more engaging client experience in future. We look at what Robo 2.0 will look like, and other digital trends that will transform the client experience. We asked Jeff to share examples of how technology is driving deeper engagement, and of course how all of that ties into more referrals. With that, let’s get straight to the conversation with Jeff.
Hey, Jeff. So happy to have you here today. Welcome to Becoming Referable.
Steve Wershing:
Welcome, Jeff.
Jeff Marsden:
Well, thanks for having me. It’s a real pleasure to join you. It’s been anticipating this for a quite a few weeks, so let’s get to it.
Julie Littlechild:
Absolutely. I am lucky enough, Jeff may argue this, but to call Jeff a friend as well as a colleague. It depends on the day really, doesn’t it Jeff?
Jeff Marsden:
Thankfully you tolerate me from time to time.
Julie Littlechild:
Yeah, indeed. I want to talk to you about industry trends at a higher level because you’ve got a great strategic mind, and I’d love to get that before we dig in a little. But even before we get to that point, can you just start and tell us a little bit about Xtiva and the work that you’re doing now?
Jeff Marsden:
Yeah, sure. Thanks, I’m happy to do that. We are the only sales performance management platform dedicated to the financial services vertical. That’s probably the most simple summary. From a market segment perspective, we’re a sales performance management firm. Rather than worry about consumer packaged goods or travel or any of those other market segments, we’re just 100% focused on financial services. We think it has unique needs, unique issues, and we’ve got a track record in the space, and we love it. I guess to phrase it a different way, we’re focused on helping change how sales, service, and advice channels in financial services globally perform.
Julie Littlechild:
Well, that’s a big mandate.
Steve Wershing:
It is.
Julie Littlechild:
There you go. We’ll make sure there’s links so the people can learn more about that. But as we’re talking about big issues and big mandates here, I did want to talk to you about some of the trends that you see impacting advisors and how they deliver advice, how they deliver a strong client experience going forward.
Jeff Marsden:
Sure. Well, what a period of change we’ve been through over the last decade, Julie. We’ve been observers of this industry and practicing in it together and independently for quite a few years. I would say the last few have been monumental. But you asked about some of the bigger trends that we see or I observe, and specifically perhaps related to advice. Look, I think maybe there’s maybe four or five that we reflect on on a regular basis, and I might start with the one that is commonly in the press, which is the shifting regulatory environment. It’s hard to ignore that. We’ve come out of this from the US market perspective with that crazy “Is the DOL going to happen, not going to happen? What’s it going to look like? Oh, it’s going to happen again?” But that’s just symptomatic of a regulatory environment which I think has struggled to keep up with customer needs and customer demand, and the complexity in the marketplace. And that’s affecting how advisors work. It’s affecting how firms structure themselves. It’s, quite frankly, representative of what the customer experience maybe ought to be in the future.
But if we were to get maybe a little bit more tactical, or tactile maybe, in how advisors and customers interact, the things that I’m really keen on are how planning is changing the world. Look, financial planning’s been around forever and a day. It grew up as a sales tool. It wasn’t so much a value proposition to end customers as it was a sales tool for the channel. But today, not because of the process of planning do I find this interesting, but because it’s forcing a change in the way that advisors and their customers engage. The conversations are different. They’re more holistic. The tools are better. They enable more of a fulsome conversation. It’s kind of like how you really wish your relationship with your doctor was, but it isn’t. I think that’s the great promise of where the planning world is taking us, and it’s certainly one of the bigger trends that we’re keeping an eye on. We’re very conscious of, at Xtiva, of thinking about how we help our customers make better use of planning.
And I think in a great extent it relates to this more whole person perspective, which isn’t so much about the specifics of a portfolio or the amount of funds that are flowing into my retirement this week, this month, this year. It’s increasingly little baby steps, but we’re marching towards the advisor as more of a whole person counsel or a whole person consultant, really focusing on, I think, resolving the most important issue which consumers have, which is my level of confidence. The things that as a consumer cause me confidence, stress, vary by person or investor, but at the end of the day it’s a confidence issue.
I also think hard to ignore digital. Consumers and advisors are having their relationships change. The way they conduct their business, the way they source information, digital is changing that. It’s really, I think the most interesting aspect to it is not what the point solutions are that are digital, but how the whole channel is becoming one whole digital integration experience, which brings the human and the technical together.
Julie Littlechild:
I mean, it’s interesting because I guess you could argue as well that those trends are all connected in a big way, certainly the second and third, how is planning changing and this whole person perspective. But would you see digital then as reflecting those changes, or ideally reflecting those changes as well?
Jeff Marsden:
Well, I think that’s not a bad summary, Julie. I think digital is enabling planning, like if we took planning as just an example, digital is enabling planning to be different than it ever has in the past. Twenty years ago, advisors had digital planning tools, but they didn’t engage in a way that they do today. They don’t empower the advisor in a way they do today. They don’t allow the customer to be a party to that planning in the way that they do today. I think you’re bang on in that digital is the common thread there. It touches on beyond planning. It touched on onboarding. It touches on how I create a different manner of engaging with my customers as a financial advisor. It’s empowering new and creative ways to manage relationships. It’s empowering new and creative ways for customers to become partners in their relationships. It’s empowering different ways of acquiring customers. And it’s also empowering the consumer to be able to benchmark and understand whether they’re getting what they need better than they ever have in the past.
Julie Littlechild:
And so, when-
Steve Wershing:
So-
Julie Littlechild:
Oh, go ahead, Steve.
Steve Wershing:
Yeah, so I mean it sounds like we’re talking not just about technology and what it can do, but what I think Michael Kitces refers to as “the bionic advisor,” the advisor for whom technology is enhancing their performance as opposed to doing something different. In which areas do you see the biggest effects of that in the client relationship?
Jeff Marsden:
Well, I think Michael’s definitely right in that the concept of the bionic advisor is one we should all be paying attention to. But I might preface it by saying I think the real liquid here is, the real magical liquid, is the data that we’re able to use. These tools are simply empowering advisors and customers, and the firms that they, the brands they work for, to do things in a different fashion. The data is the fuel that those digital capabilities is running on. But coming back to that bionic advisor and you’re asking what do I think or the, if I understand your question correctly, where do I think some of the leverage points are? Is that what you were getting at?
Steve Wershing:
Well, some of the more discrete aspects of the relationship that have been changed. Getting back to that trends conversation with the … More specifically, what aspects of what an advisor does with a client or how they communicate what they do to the rest of the world have changed because of these developments?
Jeff Marsden:
Well, I certainly as a customer understand a lot … Well, I can, let’s put it that way. I don’t think every customer enjoys this privilege or this standard. But I certainly understand better where I stand today, how I’m doing. I have the opportunity to put information at the ready that can help my manager shore up my confidence. I think the advisors similarly can be able to respond to customer needs, customer questions, differently than they have in the past to be more on topic in a shorter period of time, to be able to respond to the immediacy of things. But similarly, but also from the other perspective, is to do a better job or empower better management of expectations over an appropriate time frame instead of necessarily having to be obsessed about responding to externalities that crop up all the time. You’re able to play it more of a long game as an advisor if you’re using the tools well.
It comes with challenges. The data, that amount of information that’s out there that the consumer can access, the transparency that it provides into pricing, for example, is one that advisors have struggled with a little bit to figure out how to reconcile that. In the robo advisor space, you can … We can debate whether it’s a success or a failure, but one thing it has done is certainly put transparency around some of the cost and value in the industry.
Julie Littlechild:
When we talk about trends, we all love to talk about the big trends. At the same time, an individual advisor can listen to some of this and think, “Well, that’s really interesting, but I don’t control technology development. I don’t control data flows, and so on and so forth.” How do you think an advisor needs to think about these trends? Is it just something that’s happening or is there a real opportunity at an individual practice or business level to use some of this to differentiate themselves?
Jeff Marsden:
Well, so first of all, I would say what they absolutely should be thinking about is, “What does my customer do digitally?” Not specifically how do they engage with me as their advisor digitally, but what is the customer doing digitally, because it’s going to be symptomatic of what their needs and expectations will be in the future, even if I can’t support it today or my firm doesn’t support it today. I’m not talking about do they use the app to access their statements. I’m talking about understanding the bigger things that are on their mind. There are fascinating businesses that are trying to remake how medicine is delivered. There are businesses which change the way that consumers deal with their legal affairs. There’s all manner of the social interactions that customers use. As an advisor, I would say, “Start by understanding the customer’s digital life. What do they find valuable? How are they getting leverage? What do they look to those tools to do for them?”
Now, the next question becomes, that you asked, which is what is an advisor, what can they do because, to some extent, they’re at the mercy of the firm that they are employed by or the network they’re part of, and they’re restricted to that set of tools, which is partially true. In most cases, there are tools that they can use to help their practice, which may not be fully integrated into the platform of their employer or network, but that could give them some valuable leverage. Typically those would be things outside of the communications or asset management realm because those would be subject to supervision, but anything else. It can be some powerful things there. Look for those opportunities to enhance their business in small areas.
But think about it from this perspective, which is … Julie, you think about customer engagement nonstop, right? It’s what you do. It’s what you live. No one probably knows customer engagement more than you in the market. What I would challenge advisors to do is think about how do you create, how do you use those tools, digital with the customer or digital to give you, the advisor, more power to change or create really profound means of engaging with my customers? At the end of the day, it’s still a human business. It’s a human engagement. The customer is there because they need some human guidance to address their confidence, and there’s some powerful things that advisors could potentially do that can create more engagement.
Steve Wershing:
You’ve created, Xtiva has created a nice infographic about the client experience and about that. Can you walk us through what you think are some of the key components of that experience?
Jeff Marsden:
Yeah, happy to do that. We did create an infographic, and thanks for calling that out. We put it on our blog a little while back. It’s really some perspective on best practices that we’ve seen advisors use to create a great client experience. Now, I wouldn’t say … I preface this by saying there’s no secret sauce in here. The secret sauce, the magic which makes you as an advisor stand out is how you do each of these pieces, what you do to make your thing, your means of engaging with the customer, special. But broadly, we think about it in terms of five steps.
The first step is to focus on understanding what the client journey is that you want your customers, the investors that you are dealing with in the wealth management context, what you want that experience to be, and map that out. Not every customer will follow exactly every step of that journey. If you’re interested, if there’s any advisors that are listening to this that are interested in customer journeys, we also have a little piece on our blog around actually creating customer journeys. Again, it’s not going to be every step that is right for you, but the basic recipe is there for you to follow. You start with that customer journey. Figure out what that journey is. A big part of that is understanding which customers am I pursuing and what value proposition am I offering?
The second step is, as we’ve described it, is to ensure that you’re validating that with your customers and shoring up any improvement that you need in the existing experience relative to that journey. You’ve mapped out the journey that you want them to have, and remember your customers are going to represent that journey in the marketplace either to their friends or someone at work, or even if you potentially as an advisor had them together in a customer event, they’re going to reflect that journey, and you want them to represent that well. But you want to make sure that you understand against the journey I want them to experience, how am I doing? And then, close those gaps.
And then, as I said, you want them to be able to be the agent for you. Part of the journey is establishing that expectation and training your team to deliver on it, and your customers are then able to, or clients are able to, be your agent in representing that experience. Again, remember, this has to be driven by the customer. You have to make sure that it fits to understanding what the customer need is and addressing their needs. Keep in touch with the customers. Reinforce where they are on that journey. Make sure that you’re on the side of excess communication with them. Manage them constantly and consistently all the way through that. And then, the fifth stage is hopefully most people understand that you need to acknowledge the value of their business, and that means of acknowledging it may be different at each step of that customer journey.
Steve Wershing:
I think I missed one there, Jeff. If you could … Map out the client journey. Validate the journey. Have the staff be the agent for you.
Jeff Marsden:
Power the customers to be your agent.
Steve Wershing:
The customers, okay. And then, what’s the fourth?
Jeff Marsden:
The fourth is communication. It’s really focused on the communication through the totality of that customer journey. It may be different, right, at each stage. It may not be the same. But to be constantly communicating and managing their expectations uniquely for each step of that journey.
Steve Wershing:
Okay.
Jeff Marsden:
And then finally is to thank them for their business, but at the same time as you’re thanking them for that business, that’s an opportunity for you to reinforce the value that you’re providing. There would be some opportunity for you to reinforce their importance to you as an agent in communicating that customer experience or that customer journey.
Steve Wershing:
Great, thank you.
Julie Littlechild:
Maybe I can go back to the digital piece and build on what you just shared, and look at where digital plays into this. You talked about digital in a couple of different ways. One, driving more different, perhaps, information to the advisor. I know you’ve written about Robo 2.0, and that probably fits into that category. But you also mentioned more actively using technology or digital with your clients in a deeper level. I think of that as part of co-creation of value where you’re actively involving the client in the actual value creation. Any examples to build on the experience that you just mapped out where using technology in that way would fit?
Jeff Marsden:
Are you talking specifically around co-creation, Julie? And, by the way, I love that description that you used for that, value of the relationship.
Julie Littlechild:
Yeah. I mean, I’m thinking of, I think the words you used were actively using it with clients in some way, and I’d love to just expand on that and where it fits in the overall experience.
Jeff Marsden:
Yeah. I guess our perspective is that the really compelling digital tools aren’t point solutions. They’re integrated. They’re part of a digital transformation in how you engage. As an advisor, and maybe your firm … I recognize that some firms don’t necessarily support this, depending on the conservativeness of their regulatory posture, let’s call it. You might use, the means of you communicating with your customers might be multichannel. It might not be just email and telephone. You may be using, in a very tactical sense, you might be using messaging. You might be using other communication platforms that are available to you. Is that available to you to do today as an advisor? Absolutely. Those capabilities exist.
Where it starts to get interesting for advisors is where you can start to learn more about what the customers’ values are and how do they prioritize things in their life. What is valuable to them? How do they make trade-offs? How do they think about risk? Look, I would argue that really a financial advisor is just a risk manager. Historically, we’ve thought about that risk as the investment risk, but it’s not. It’s the risk in the individual’s life, their whole life, their financial life, their wellness life. That’s what a really compelling, deeply integrated financial advisor’s thinking about. How do I help my customer manage through all of the risks that they have in living the way they want for the whole duration of their life?
I would say, “What are the tools that an advisor could use to help understand how one values things?” Where does a customer spend their time? How do you engage with them around their use of time, what they think is valuable? What are their pursuits? How do you engage with them on understanding the trade-offs they make in the use of their time? Can you use digital tools to help understand how customers prioritize investment of their time?
I recall an advisor telling me many, not that many years ago, but a few years ago … This was before some of the photo sharing stuff that existed. But the thing that struck me was that she gave her customers a digital camera, and she asked them to basically curate things for a couple of months that they did, just what did that customer do in their life. Take pictures of things that you do. Take pictures of things that are valuable to you for the next 60 days. We have a meeting. We’re going to get together. We’re going to review your plan. We’re going to do whatever that stuff is. But the most valuable part of that interaction 60 days later was that customer, they had a conversation around the pictures that the customer had taken. What it did was it allowed that advisor to see through the eyes of the customer how they had prioritized things that were valuable to them. What I would say to an advisor today is, “Think about ways that you can understand your customers in a different and more profound way, and use technology to do that.”
Steve Wershing:
Do you have an example, and sort of an updated example, of how we can use today’s digital tools to … That’s a really fascinating story about what that advisor did.
Julie Littlechild:
Use your phone instead of a camera.
Steve Wershing:
Yeah, right. Yeah, yeah, yeah. How else can advisors today use today’s technology to do that kind of thing?
Jeff Marsden:
Well, yeah, as Julie said, you don’t have to give a loaner camera out anymore to pull it off.
Julie Littlechild:
A disposable.
Steve Wershing:
Right.
Jeff Marsden:
But-
Steve Wershing:
Look at their Facebook.
Jeff Marsden:
Yeah, I mean, there’s certainly an easy way to do it, it might not work for all customers and all advisors, would be some of the social tools. Advisors could do some interesting things with having customers contribute photos to some of the photo sharing tools. I think they have to find a way of doing it that’s going to be compelling for those customers, not seem sleazy like they’re looking in on their life too much, but also make it super easy because you’re not wanting to ask the customer to step out of how they live their life. You want to understand how they make value decisions all the time. I would say there are probably many, many tools out there that would enable an advisor to try a technique like that. I think they need to find one that’s right for them and right for their customers.
Julie Littlechild:
I ripped that story off you, Jeff, and shared it once. Although, the context in which I was sharing it was … I shared this idea that I had heard from you, but I also thought it was an incredible way for couples to create shared vision. Because if you have both people doing something similar, whether it’s photos, even there are higher tech forms of values cards and different things that could be used today, it does bring couples together, or perhaps uncovers where they’re not so much together.
Jeff Marsden:
That’s a great … That’s a really powerful idea, Julie. I love that. That’s the kind of thing where exactly … You’re phrasing it much better, which is advisors find the right way to use those technologies and those tools to fit to your practice. In this case, if you’re particularly good as an advisor at helping couples work through their financial planning and their financial life, that sounds terrific. Look, I learn interesting things looking in on my daughter’s Instagram feed, so you can imagine what-
Julie Littlechild:
Are you using air quotes around interesting right now?
Jeff Marsden:
I’ll let you come to that conclusion.
Julie Littlechild:
Yeah. Yeah, right.
Steve Wershing:
That’s right.
Julie Littlechild:
Yeah, so this is … I mean, what I love about where the conversation has gone is … we’re talking digital, but we’re really talking about connection at a deeper level. I think you said it right at the beginning, digital is just a way of enabling a different approach. And it strikes me, I’d love your opinion on this, that even though this is a trend, it’s something that we ignore at our peril. It’s not comfortable for every advisor, but don’t they really need to be paying attention to this? Like you said, it’s happening in the medical industry. It’s happening in the legal industry. It’s happening in our industry whether we choose to acknowledge it or not.
Jeff Marsden:
Absolutely, and I mean you can’t ignore it. Absolutely your description “ignore it at your peril” is bang on. You can’t. Advisors need to embrace it. They need to embrace both from a customer relationship perspective. Certainly, there’s been lots of investment in helping them with using digital to improve the scalability of their practice, and some of those investments have been effective and some of them have not, but there’s plenty of examples of those kinds of investments. But the engagement with the customer, this is where the power is in the future for them, and they need to get behind it. The customer’s going to take them there. The question is, do they want to be seen as providing guidance and value to the customer in how they get there?
Steve Wershing:
Well, and it’s interesting because as you talk about it, what I hear is that what we’ve leveraged fintech for so far is largely pushing things out to clients, portals and sharing things with them and doing the analysis and stuff. What we’re talking about is turning it around the other way, so instead of pushing things out to clients, is learning how to bring things in from clients to enhance the relationship leveraging that technology.
Jeff Marsden:
Absolutely. Look, advisors are just problem solvers. You need to understand what the problems are you’re solving, and any of these tools that allow you to do that better they should be pursing.
Julie Littlechild:
Absolutely.
Jeff Marsden:
Have you gone to your doctor’s office lately after googling all the ailments that you have, right? And they say-
Julie Littlechild:
Absolutely.
Jeff Marsden:
You have to google-
Julie Littlechild:
Everything leads to cancer. It doesn’t matter what you’ve got.
Steve Wershing:
Yeah, exactly. That’s right. That’s right.
Jeff Marsden:
Exactly. But the doctor’s response to that is, “Oh, I’ve …” They get anxious because it’s a bit of a double-edged sword. You’re more informed than you were when you went in, but it’s not necessarily all that well contextualized. As you say, everything leads to cancer. But a financial advisor has the opportunity here to say, “Let me be a leader. Let me show you some things that are valuable. That can be in the form of tools. It can be in the form of content. Let me show you some things that are going to be valuable for you to improve your life, and therefore I’m changing the way that I’m engaging.”
Julie Littlechild:
Yeah. Maybe just as we wrap this up, can you connect the dots for us between this deeper level of connection that we’ve been talking about and referability?
Jeff Marsden:
Well, I’ll do my best, Julie, but I think I’m speaking to the expert on that, so we’ll defer to your scoring of this. I think advisors, financial advisors, ultimately are going to be referable when they have a story. Give your customer a story. Now, you can paint that very vividly for them, or through a compelling journey and some tools and the way that you communicate, you can allow that story to manifest itself. And then, empower them to sell that story. Not in an overt fashion, but let them be proud. Let the customer be cool, or smart, or avant-garde, or thoughtful, or whatever it is that fits with their personality. But if you do that well, you’re empowering them to do that. In effect, create that mythology about what you get as a customer from that advisor. At the end of the day, facts win, but mythology sells. Give the customer a story and let them do the work for you.
Steve Wershing:
That’s a fascinating approach to it. Jeff, thank you for sharing all this with us. If people want to find out more about you or about Xtiva, where can they go?
Jeff Marsden:
Well, best place is to just go to our website, which is www.xtiva.com, X-T-I-V-A. My profile is on there if someone wants, for some reason, to outreach to me. My profile’s on there. You can find me on Twitter or on LinkedIn, and happy to talk more. I appreciate the opportunity to spend a few minutes with you folks today.
Julie Littlechild:
Thanks so much.
Steve Wershing:
Thank you, Jeff. Hey folks, Steve again. Thanks for joining us on Becoming Referable. If you like what you’ve been hearing, please do us a favor and rate us on iTunes. It really helps. You can get all the links, show notes, and other tidbits from these episodes at becomingreferable.com. You can also get our free report, Three Referral Myths That Limit Your Growth, and connect with our blogs and other resources. Until next time, so long.