4. Nancy Kistner
Head of CFP Board
Nancy Kistner, the new chair of the Board of Directors of the Certified Financial Planner Board of Standards, has a lot to get done this year. She and her colleagues on the board have identified four "outcomes" to boost the organization's profile in the next several years. That includes not only reaching for household name status, but also an overriding aim of helping the public. "We have a long way to go on that front," she says.
That starts with promoting awareness. Raising awareness of the CFP certification among the public, the financial services industry and policy makers "is critical to the future of the CFP designation and to the profession," she says. The board is starting with a public awareness campaign, featuring targeted advertising in magazines, television and radio. Then there's "CFP ambassadors" speaking to local media outlets on issues affecting investors, such as retirement.
Growth is the next piece, expanding the profession from the 130,000 CFPs in 27 countries worldwide—65,000 of whom are in the U.S. That means working with large firms already encouraging their advisors to get the CFP designation, as well as small firms just learning about it.
Boosting recognition also means getting law- and policy-makers on Capital Hill acquainted with what CFPs do. The message is that no matter which governmental body oversees an advisor, the CFP Board also regulates those who hold the designation by enforcing ethics and education requirements. Further, the group will continue to push for a uniform fiduciary standard for all. "We feel the fiduciary standard will restore and strengthen trust in financial advisors, and will therefore have long-term benefits for consumers as well as the economy," she says.
The last piece is authority. Kistner and the board want to create something like a think tank. Still in the very early planning stages, the idea is to bring researchers and academics together with passionate practitioners. "We want to be a thought leader around issues consumers are dealing with, that we feel we can authoritatively research and write on for the benefit of the public," Kistner says.
5. David Kowach
New president of Wells Fargo Private Client Group
For David Kowach, the new president of Wells Fargo Advisors' Private Client Group, 2013 will be about helping the firm's financial advisors develop deeper client relationships with their clients. His goal is for Wells to be known as the firm with the strongest client relationships. "When I was growing up in the business, the advisor with the most accounts 'won,'" he recalls. "That's not what the industry will look like going forward."
Kowach believes that clients want these deeper, stronger relationships as well. But he recognizes that having a large book of business can make it hard for an advisor simply to keep up with the complex issues in clients' lives. Then there's the matter of updating their financial plans, monitoring their progress and adjusting their portfolios to reflect life changes. "It's an ongoing interaction with clients every day," he says.
So what's the path to these almost familial relationships? A bear-hug of the firm's best practices. The firm's research shows that clients whose advisors use all of the best practices are 94% loyal, while clients with just one best practice are 20 percentage points less loyal.
One best practice is making sure there is a financial plan for every client. That means boosting the use the company's Envision software. The advisor feeds the program every detail of a client's financial life and goals: how much the client wants to withdraw each year in retirement, what age they want to retire, and so on. Then Envision performs 1,000 simulations to see what percentage of the time those goals will be met. If the number is too low, the advisor knows it's time to change something. Currently, 81% of the firm's clients have an Envision plan. Kowach wants that figure to climb this year.
Another best practice is the use of a Client Service Matrix, which helps advisors develop a plan to bolster their relationship with clients. It asks how many times will the advisor communicate with clients each year and how—in person, by phone? But perhaps the most important piece is the advisor telling the client what their service commitment is. Kowach stresses that this is not a rote exercise. "It's all about the individual relationship," he says, "showing our clients how important they are to us and committed their financial advisor is to them." About half of Wells' advisors have used the Matrix thus far; the goal is for all of them to be using it eventually. "We need to continue to work on earning trust from clients. Clients need to know their advisors and firms care about them," Kowach says.